Takeout & Deliveryby
Nearly anything is available at your fingertips now.
The on-demand economy sparked by Uber, Netflix, and Amazon Prime has spread to the restaurant industry. Consumers want convenience in all aspects of their lives, including dining.
With new third-party food delivery service providers constantly popping up, it’s easier than ever for restaurants to give customers the convenience they expect. But is offering a delivery service worth the investment of time and resources?
There’s no one-size-fits-all answer.
We’re laying out all of the factors for you so that you can decide whether or not becoming a restaurant with delivery service is the right decision for your business.
In this food delivery guide, you’ll learn:
By the end of this article, you’ll be able to make an informed decision about delivery at your restaurant.
According to the New Yorker, food delivery orders made up 7% of restaurant sales in the U.S. in 2016. And, since this trend is growing rapidly, it’s predicted that delivery orders will make up 40% of revenue for restaurants very soon.
According to our State of Full Service Restaurants report for 2019, restaurants that offer online ordering conduct between six and 20% of their business this way and see a 16% increase in sales on average.
If your restaurant isn’t offering online ordering and delivery, you could be missing out on significant profits.
Food delivery has already made a major impact on the restaurant industry. In fact, it’s even inspired a whole new category of restaurant: ghost restaurants.
Ghost restaurants are restaurants that only offer food via delivery. Unlike traditional restaurants, they don’t have brick-and-mortar locations where you can dine-in or pick up from. They are typically run out of commercial kitchens, so the focus is on food preparation and order fulfillment, rather than a dine-in experience.
Ghost restaurants benefit from lower operational costs than traditional restaurants for a few reasons:
Only time will tell whether ghost restaurants are just a food delivery trend or a sustainable restaurant business model. But you don’t have to run a ghost restaurant to profit from the benefits of delivery.
So is offering food delivery service at your restaurant worth it?
Here are the pros and cons of restaurant delivery services.
These are some compelling reasons to offer delivery.
What are the downsides of offering food delivery?
Food delivery isn’t a one-size-fits-all solution for restaurants. Consider your venue, location, and customers before determining whether or not to offer delivery.
Delivery is best for restaurants where the food stands apart from the experience. If a big part of the experience at your restaurant is the ambiance or plating, you risk losing this important aspect of your brand with the delivery experience.
Delivery can also be tricky for traditional fast food venues. Fast food was meant to be consumed quickly after being made, so quality could diminish by the time the consumer gets the delivery. No one likes soggy fries!
Fine dining is about so much more than how the food tastes – it’s about the combined experience of the service, ambiance, and presentation of the food. Through delivery, fine dining establishments lose the ability to control most aspects of the customer experience.
Before implementing a delivery service at your restaurant, talk to your current customers to see if they would use it. Would they visit your restaurant more or less often if delivery was an option? Would they dine-in less and order delivery more?
Also think about the new customers you could reach by offering food delivery, especially through a third party site. Millennials are leading the demand for food delivery and are three times more likely to order in than older generations.
Are millennials part of your target demographic? If they aren’t now, should they be? You could open yourself up to new clientele by implementing delivery.
Delivery is more popular in cities than in suburban or rural areas where people already have cars and can drive to pick up food. Opt for delivery where people seek convenience over an experience.
If you decide to deliver food to your customers, will you take on delivery yourself by hiring someone to perform the deliveries or will you outsource delivery to a third party service?
Here are some things to consider for both scenarios.
If you opt for in-house delivery, you’ll need to find and train a delivery driver. Look for someone who has prior delivery experience and a vehicle. Pay for the driver’s gas and contribute to the upkeep of their vehicle, because you wouldn’t be able to offer delivery without it. You’ll also have to check with your insurance and make sure you can properly insure your driver.
The delivery fee and business gained by offering delivery will help offset the cost of hiring a new person, but a lot of work goes into hiring and training the right person for the job.
If you use a third-party delivery service to fulfill your online orders, it’ll be less work for you, but you’ll have to share your profits with the delivery company.
The costs you’ll have to put towards your third-party delivery service include:
Keep in mind that customers may blame your restaurant if something goes wrong with delivery, even if it’s the delivery service’s fault.
This means you’ll want to have a system in place before a customer is coming to you. Do you have somebody dedicated to answering customer feedback? Prepare them with what to say if something goes wrong with a delivery order. It may be worth having an offer in place that encourages customers to come back, like 20% off their next order.
If your restaurant doesn’t already offer delivery service, there’s a lot you’ll need to know to successfully implement food delivery.
Here are some of the top resources you’ll need:
Food delivery requires staff. If you decide to handle deliveries in-house, you’ll need:
A lot of tech goes into running a successful food delivery service.
Here’s exactly what you’ll need for the various stages of the order and delivery process.
*based on TouchBistro’s estimate of a restaurant’s average annual online ordering revenue
These are some of the costs you can expect to face if you choose to implement an in-house food delivery service at your restaurant. If you choose to go with a third-party delivery option, each provider offers unique rates.
Offering food delivery is definitelya long-term investment, which is why it’s important to do your research before deciding if it’s right for your business.
Delivery is on the rise due to the popularity of the on-demand economy. Deciding whether or not to become a restaurant with delivery service is a personal choice that you should make based on your business’ needs, resources, venue type, customer base, and location.
One thing is certain: the food delivery trend is here to stay.
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