Why your own food ordering app is better than third-party services?
Food delivery is still popular between Pizza and Chinese food restaurants – they’ve gotten it right for decades. They offer delivery for customers who want to eat at the comfort of their office or home. Third-party delivery companies, such as Uber Eats, Doordash or Grubhub, might seem like a great way to attract new customers to your restaurant, but, surely, there are some downsides that restaurant owners should be aware of.
Customer loyalty changes
Many restaurants are doing a great job spending thousands of dollars in marketing trying to gain some trust and loyalty from their customers. Third-party delivery companies are getting in the way between the two – restaurant and consumer. Therefore, customers become more loyal to a delivery company, instead of a restaurant. This can hugely affect restaurant’s sales, and in a pretty negative way.
Delivery fees are through the roof
Third-party delivery companies charge somewhere between 15% to 30% for their service. This is a huge amount, especially for smaller restaurants. Sure, these companies may attract you new customers, but it won’t matter if they will charge you any profit margin you earned from these new customers.
You can’t control the quality of delivered products
Even in our daily lives we are trying to figure out how to deliver any food (lunch to your office or a romantic dinner to your loved one) hot and fresh? The same problem remains in third-party delivery services – there are no guarantee that your food will reach your customer fast, so it may get cold or soggy (nobody likes that). This may increase your one-star reviews online.
Less dine-in customers = less profit
When customers come to your restaurant, your profit is bigger as they order appetizers, sides, desserts and drinks. By having their food delivered to their home, they won’t order as much – usually we have drinks or some dessert at our place, so we do not need to order extra.
There are only so many consumers who will order food for delivery. Also, there are only so many consumers will eat out. Third-party delivery companies cannibalize both for all restaurants in the sense that they ‘thin the herd’. Over time, these companies can truly hurt great restaurant operators that invest their passion, blood, sweat, tears and money into their restaurant operations.
It’s still very early in the game, but the third-party delivery industry will have to re-tool their business model or face restauranteurs and consumers who will ‘put a fork in it.’
Meanwhile your own app works for establishing loyalty and saves thousands of dollars every month as you don’t need to pay any commissions for third-parts.