Restaurant food delivery is on pace to become a dominating force in the foodservice industry. However, the biggest benefits of restaurant food delivery revolve around organizations that did not fall within the typical food delivery profile, such as pizza parlors and Chinese restaurants. Meanwhile, the rate of the restaurant’s total orders for delivery continues to increase. According to one Tacit client, “35% of our take-out business is delivery today. Three years ago, it was zero.” Restaurateurs must always face the challenges of shrinking profit margins and how to build better guest experiences, but now, the rise of third-party delivery for restaurants and branded restaurant food delivery can finally change the narrative and open new doors.
Why the Industry Still Suffers From a Delivery’s-Only-for-Pizza Perspective
The grand irony of restaurant food delivery focuses on the need to capture more revenue and tap the value of customers that prefer convenience over experience. In today’s world, the modern customer redefined experience as a convenience, and in the non-pizza food industry, food delivery opens the door to limitless meal options. Unfortunately, some restaurants continue to believe that delivery is not for their brand. That is the greatest problem with modern food delivery. Organizations that take advantage of third-party delivery services may feel they lose control over the experience. Unfortunately, failure to offer delivery through third-party services, as well as a branded app and website, leaves money on the table.
Third-Party Delivery in the Non-Pizza Food Industry Increases Customers’ Menu Options
Ina 2019 study of customer buying habits when ordering food online, the average person orders delivery services across two apps at least three times per month. According to the study, published by U.S. Foods, 54% of third-party delivery service users start with the restaurant in mind, looking for it on an apt first. The other 46% start by opening the app and looking for ideas.
Yes, customers retain the ability to order pizza and Chinese food for delivery— the most traditional forms of restaurant food delivery. However, partnering with an app extends the delivery zone for a restaurant. Some restaurants even expressed a commitment to not partner with third-party delivery services as doing so could disrupt their traditional business model. Brands like Jimmy John’s and Pizza Hut made this commitment. Now, the pressure to offer delivery through an established delivery service provider is on. Restaurants that traditionally relied on in-house delivery, such as Papa John’s and Asian diners, have tossed those notions aside to offer another ordering option for customers. According to AP News:
“Others besides Jimmy John’s have rejected third-party delivery, including Domino’s, Panera Bread and Olive Garden. In some cases, it would disrupt their long-established business models; Domino’s has been delivering pizzas for 60 years. Other companies just are not convinced. Olive Garden tested third-party delivery but says its customers weren’t satisfied.”
That was before the spring of 2020. Now, even Olive Garden and Panera Bread are available through third-party delivery services. The evidence is clear. Restaurant meal delivery is so important that even companies that vowed to never embrace the third-party delivery scenario have changed their tunes.
How to Determine the ROI of Restaurant Food Delivery Delivery for Your Restaurant
A successful restaurant food delivery business case must focus on the improvements to your restaurant. As a result, follow these steps to calculate a comprehensive ROI for improving third-party delivery or launching a new delivery option for your customers:
- Start tracking data now.
- Determine the costs of maintaining the current delivery service, if any.
- Review the labor costs for delivery orders.
- Determine the costs for adding approximately 35% of the order volume to your workflows.
- Evaluate the costs of third-party delivery commissions.
- Remember to include the costs of remodeling or changing how drivers pick up orders.
- Consider upgrading your POS.
- Rethink your use of delivery services to include white-label support for offering branded delivery.
Reap the Value of Third-Party Delivery in Your “Non-Pizza” Restaurant Now
restaurant food delivery is the next wave of evolution in the food industry, and it will have the greatest impact on non-pizza restaurants. Instead of just ordering a pie, customers can order anything. What is the real value? Well, pizza restaurants built their empires on delivery as a differentiator. So, as non-pizza players join the game, that competitive advantage will decline, opening the door to new revenue streams for your restaurant. Learn more about how your restaurant can expand into the non-pizza delivery space with third-party service providers by visiting Tacit online today.