How Good Are Delivery Apps for Restaurants?
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For many businesses, the reality has altered dramatically since the pandemic’s beginning. The COVID-19 outbreak has had a particularly negative impact on tourism, entertainment, and HoReCa industries.
The only way for the restaurant business to stay afloat was to introduce technical solutions like cashless payments, online ordering, and delivery. As a result, the food delivery market has developed significantly and will continue to grow by 15% each year.
Consumers appeared to enjoy delivery services. For example, 30% of fast-casual customers say they dine in much less often, preferring delivery or takeaway orders. According to another survey, 20% of consumers say they spend more on off-premise orders than dine-in ones.
Even after the quarantine restrictions have been relaxed, restaurants still try to bring back the pre-pandemic number of visitors. So let’s look at how delivery solutions for restaurants work and what downfalls they bring to the HoReCa industry.
How Food Delivery Apps Work for Restaurants
Typically, restaurants employ third-party services for handling their food delivery operations—for example, delivery apps like DoorDash, Postmates, or Seamless.
These solutions are marketplaces that feature various dining venues. Consumers can choose the restaurant they need and place an order directly through the app. The restaurant, in turn, receives the order, confirms, and prepares it. Then the courier service joins the workflow, delivering orders from the venue to its customers.
Food delivery apps for restaurants completely digitalize the ordering and delivery process. They also provide various payment options available directly in the application. Consumers love that they can order and pay for the meal with their smartphones in just a few taps.
Pros and Cons of Delivery Apps
With the high demand for delivery services among consumers, introducing such a service in a restaurant seems inevitable. But before any business does implement such an app, it should consider the main advantages and disadvantages of food delivery apps for restaurants.
Delivery apps’ advantages
Wider coverage
Food delivery apps offer restaurants their customer base, which is especially useful for small and medium-sized businesses. As a result, a restaurant may attract more clients with less marketing efforts.
New customers
Since food delivery apps feature various restaurants, customers are no longer limited to close-to-home options. Therefore, by introducing delivery services, restaurants will gain new customers.
More orders during downtime
Every restaurant has hours with a high load: usually during breakfast, lunch, and dinner time. Between these periods, the dining venues are less busy. Yet, food delivery can help smooth out this downtime. It’s also true on days when the weather is bad, and customers are unlikely to come directly to the restaurant. They are more inclined to request food delivery.
Disadvantages of delivery solutions for restaurants
Empty restaurants
Imagine a restaurant that has implemented delivery services. It receives many orders, while the premises remain empty. It can be a concern for restaurateurs and confuse potential dine-in customers.
Delivery fees
The biggest downside to using restaurant delivery apps is that service fees can outweigh the benefits. Some third-party vendors charge up to 40% for each order!
Lack of control over delivery quality
Using third-party delivery services, a restaurant cannot monitor the delivery quality, such as the conditions under which food is transported. Another problem is if couriers do not serve customers well, it will negatively affect the restaurant’s reputation.
Are Delivery Apps Bad for Restaurants?
From the consumer’s point of view, food delivery applications offer many benefits: maximum convenience, the ability to choose from a large number of restaurants, usually fast delivery, and easy payment.
However, not everything is so cheerful for dining businesses. So when and why are delivery apps bad for restaurants? Let’s figure this out.
The pandemic has shifted the customer behavior: delivery apps have shown customers that they can order food without leaving their homes. The problem with COVID-19 is declining, yet consumers are still reluctant to return to restaurants.
But how do delivery apps hurt local restaurants? They set unprecedentedly high delivery fees. Recently, more and more restaurants are demanding that third-party vendors like Uber Eats reduce fees set for each order. Dining venues lose significant revenue by paying a percentage for each delivery. And given the pandemic, restaurant profits have already fallen sharply.
This issue may be solved when third-party delivery vendors reduce their fees. Another way for restaurants can be to develop their own delivery service. But in this case, restaurant owners must build up a whole supply chain, engage couriers, make a delivery app, and so on.
Nevertheless, delivery applications bring many benefits to restaurants. It was thanks to these solutions that restaurateurs did not go bankrupt and were able to maintain profits during the pandemic. And limitations that come with delivery services can still be worked out.
