Thanks to the pandemic, online ordering and delivery services have emerged as everyone’s lifeline, from restaurants to consumers. As a result, third-party delivery services have seen an increase in revenue from $11 billion in 2021 to $128 billion in 2022, with a projected market growth of $159 billion by 2026, as reported in a recent study by Reporter Link.
However massive the growth, restaurants and their customers are the ones that indeed suffer. Third-party delivery services such as DoorDash and UberEats leave something desired in the delivery process, often missing the mark in service and quality control. Drivers are usually unvetted part-time gig workers; combine this with high gas prices, long wait times, missed or wrong items, inflated prices and insane service fees. You have a recipe for predation that impacts the restaurant owners and the customers.
The pandemic changed a lot of industries, so what do the restaurant and online ordering industries look like moving forward post-pandemic? Also, with third-party fees taking up to 30 percent percent of the cost of the meals, how can restaurants reach customers without cutting into their already thin profit margins?
Restaurants aren’t the only ones fighting back.
It may seem hopeless, but restaurant owners aren’t alone in fighting back. State governments in California, New York, and Massachusetts were some of the first to implement fee price caps on delivery services, some temporarily and others, like New York, making the cap permanent.
Food & Wine dove into how some restaurants are fighting back through the legal system. Initially filed in 2020, a group of restaurateurs forced into signing a price competition agreement with various third-party delivery services are suing apps like GrubHub and DoorDash over their price inflations and seeking customer damages. Due to contracts put in place (which don’t even allow the restaurant to give a discount on their website), they are losing business because of delivery service price inflation - up to 40% in some cases.
Other bigger restaurant chains such as Domino’s are aiding in the fight by supporting locals with their gift card initiative, giving away thousands of dollars in local restaurant gift cards across the country to encourage in-person dining, and discouraging the use of third-party delivery.
It’s time to strengthen restaurant websites by implementing online ordering systems.
Many restaurants fell into the trap of partnering with third-party delivery services during the pandemic because they seemed to be the savior of their struggle when it came to reaching customers. With the loss of in-person dining and a lack of technical infrastructure or knowledge, many restaurants scrambled to set up an online ordering feature. For many, the third-party delivery apps were that solution. Apps like DoorDash and Uber Eats made it easy to feature your menu and even market your restaurant to users. Simply upload your menu items, include images and descriptions, and you are ready to get started instantly.
Even with COVID-19 restrictions easing and in-person dining now booming, the popularity of ordering takeout hasn’t gone away. Instead, it’s become part of the norm. Restaurants, however, have more time and options for optimizing their own branded websites where they can customize them to maximize their customers' experiences with the possibility of diminishing the use of on-demand delivery services.
When a customer has a seamless, aesthetically pleasing website that is easy to navigate and allows various payment options and order customization, it is shown to increase brand loyalty as well as encourage repeat business directly from the brand-controlled website instead of a third-party.
With the rush to have a digital solution behind them, restaurant owners and operators can take their time developing the right website for their business without changing their POS system or having previous technical experience.
Increase direct orders by optimizing the customer carryout experience.
Consumers flock to third-party delivery services simply because of convenience. With a few clicks on an app, they can search for whatever cuisine they are craving and have someone deliver it to them with a click of a button. Historically, this is a more straightforward process than picking up the phone to order and risk being left on hold or no one picking up.
When faced with delivery fees and long wait times, curbside pickup at the restaurant of your choice is the best method when customers choose not to dine in. It’s quicker and cheaper, and the customer gets to interact and experience a portion of the restaurant's brand.
While ordering through an app appears to be the most convenient for our customers, ordering takeout orders over the phone generally makes up 40–60 percent of to-go orders.
With text-to-pay as an integrated feature in your point of sale system, a restaurant employee takes the customer order over the phone and inputs it into the point of sale system. Then the system will instantly send a secure link to the customer's mobile device where they can see their order displayed and securely pay with a credit card, Apple Pay, Google Pay, and even a gift card before utilizing loyalty points.
However, the most helpful integration is the “I have arrived” button within the link that allows a customer to notify the restaurant of their arrival in their specific vehicle without the hassle of tying up the phone lines or hoping they see you pull up.
It’s no doubt that the restaurant industry has been through the wringer the past few years, from pandemic shutdowns to staffing shortages and predation from delivery apps that pretended to help. But it’s time restaurant owners fought back, and it’s finally their time to thrive in an easy-to-use, technical way that improves their lives as well as their customers' experiences.
Jon Squire is the CEO and co-founder of CardFree. He has more than 20 years of business, marketing, and product development experience in financial services and emerging technologies. Jon founded CardFree in 2012 with the vision of filling a gap in the marketplace for an integrated commerce platform for large merchants. Jon has consistently driven innovation and created world-class product offerings in new categories. He launched the first national mobile P2P offering in partnership with Sprint and PayPal and is well known for his leading-edge work with NFC, barcode, and alternative technologies that integrate with the point of sale. Earlier in his career, he also led mobile/e-commerce payment initiatives for Wells Fargo and ran E*TRADE Advisory Services.