Delivery services are often considered to be a must-have for restaurant businesses.
During the Covid 19 pandemic, platforms like Uber Eats and Doordash managed to explode in popularity. From low transaction fees to sign-up bonuses, everything seemed rosy for these services.
However, the situation has significantly changed in the past few years.
[City]-based [business name] was one of the restaurants that joined the delivery boom in the middle of the pandemic. Initially, the restaurant managed to significantly grow by adopting a popular 3rd party delivery service.
However, fast forward several years, the experience turned sour. From the transaction fee to the branding, restaurant owners [names] started to notice the negative impacts of partnering with a delivery service. This article shares their experiences and gives context on why businesses should avoid 3rd party delivery platforms.
Transaction Fees and Charges The biggest problem for restaurants currently is the cost that comes with using food delivery services. Leading 3rd party platforms charge up to 30% for each order. This makes it challenging for small restaurants to survive in a highly competitive industry. The food industry works on thin margins and volatile variables. Having to forfeit such a significant sum to the platforms can be a challenging proposition.
In most cases, shifting to an in-house delivery program can have immediate positive results. By having an effective point of sales system, restaurants can internally manage orders and accept payments online.
[owner name] credits the shift as a key reason behind [restaurant name]’s profitability.
“Taking our delivery operations in-house turned out to be a major blessing. We were able to increase our margins and provide a value-added experience to our customers by having a larger cushion. Investing in Clover turned out to be the best way to receive payments online. We didn’t have to wait for weeks to get paid from the platform and were able to laterally accelerate our cash flow.”
For other restaurants, such a shift could have significant positive impacts as well.
Missing Out on Brand Growth When your restaurant is listed on delivery service, you’re just a name on a list. It can be really hard to stand out from the competition when you’re confined with just a name and an image on the platform. It can be hard to outcompete your competitors when customers miss out on the majority of your customer experience. A key part of the customer experience is when they interact with your restaurant staff and have a personal experience.
Shifting to an in-house management strategy allows you to showcase your approach and distinguish yourself from the competition. You can also customize your website with loyalty programs and personalized touches to have control of your growth.
Reputation Backlash In the restaurant industry, reputation is the most important variable for any business. Food delivery services drive the majority of their sales from testimonials and word-of-mouth. When you work with a food delivery service, you often suffer from the negative consequences of the mishandling of any part of the customer experience.
According to a study by Off-Premise, 82% of customers blame the restaurant if anything goes wrong with the order. Whether the fault is in the food or the customer handling, your reputation is at stake when you partner with a food delivery service. Aside from fielding the negative complaints, you also have to deal with the social media feedback that comes as a result of the experience.
To prevent that possibility, it is a better idea to avoid using delivery services and rely on your in-house capabilities to take accountability for every part of the order handling process.
[customer] credits the in-house management as a major reason behind the restaurant’s increase in sales. “Our customers often tell us that they love the packaging, the human customer support, and the personal touch that goes into our orders. We make sure that every interaction is positive by taking charge and delivering every order with care.”
Maintaining Delivery Quality Even though food delivery services market their efficiency and delivery speed, the end result can often be highly variable. This is simply because of the fact that food delivery services are not focused on building your brand.
According to [owner name], delivery quality was a major reason why the [café name] shifted away from Doordash and decided to accept inhouse payments.
“When we signed up for Doordash, we expected to improve delivery times and maintain 5-star feedback on social platforms. It was truly shocking when we received our first late delivery feedback, and sadly that was not the last instance. We were consistently struggling to meet deadlines and realized that it was simply much better to start our in-house delivery system.
Co-partner [ name 2] credits Ecwid and Clover as the two biggest tools behind the company’s pivot.
“Having the support from a reliable POS solution was a complete gamechanger. By using Ecwid’s digital support and Clover’s management system, we were able to automate our order management and were able to set up our in-house delivery system in less than a month. Being able to accept mobile payments really helped us increase our in-house sales as well.”
