Published: 2021-02-20 in Takeaway Genie by Lauren Deol
And, the COVID-19 pandemic has accelerated the growth of less expensive options – online ordering system, which allows customers to order food online, whilst keeping operations in-house – like Takeaway Genie, which are about 90% more affordable. These can also work with third party last-mile courier services and a few software’s, as our own, presently have a premiumised delivery experience built into the software so you can have a same experience as Deliveroo.
So, which is best? Would it be a good idea for you to leave your takeaway to a third party like Uber Eats, Just Eat, or Deliveroo? Or should you get it done in-house with a DIY-marketing platform like Takeaway Genie?
Just Eat, Deliveroo, and Uber Eats: the pros
More exposure, more sales
Increased exposure for your business is an important factor of using a third party delivery platform.
Just Eat alone had 26.3 million customers and handled 221.2m orders in 2018. Deliveroo was required to hit 6 million customers in the UK by 2019. That means new customers and most awesome of all, customers who don't have no idea about your business. This means more opportunities to sell, particularly in case you're a smaller business that might not yet have a large number of customers. However, remember, these will be customers whose data you don't know and to whom you will not have the option to market.
Focus on the core of your business
Convenience is the reason to outsource delivery. It means you don't need to manage a lot of the logistics of your takeaway business yourself – like recruiting drivers, sourcing packaging, or marketing.
Furthermore, while third party platforms are well known for their high charges, those fees are obviously defined operational expenditures which you can expect. With in-house deliveries, you'll need to bear the costs of employing drivers, looking after vehicles, and keeping them insured.
A third party platform takes care with these operations for you. That way, you can focus on the core of your business – your food.
Deliveroo, Uber, Just Eat: The cons
More deals… less benefit?
Third party deliveries platforms are costly. They charge in the region of 30% commission in an industry with already narrow margins. They also charge customers extra. Just Eat's commission is less expensive than Deliveroo or Uber Eats, yet you'll need to pay extra upfront. A few restaurants do sell at a loss because of this, however it's easy to raise your costs.
In spite of the fact that you're "paying" for the marketing, most of your customers will be repeated customers, who return over and over and simply use Deliveroo for convenience. Why pay 30% on those? Over 2020, we've seen a rising cognition among customers that Deliveroo is charging restaurants and may customers now start to hunt on restaurants sites for cheaper pricing.
How loyal are your customers?
80% of customers will remain with the first delivery platform they signed up, according to a McKinsey study.
Delivery platform customers tend to narrow restaurants down using factors like location, cooking type, or price. Pitted next to each other against your competitors, it could be that repeat customers are distracted on their journeys to your checkout and loyalty customers spend through 67% more than new ones. Some of the custom you would have captured through a cheap online menu will come through Deliveroo, and will come at a higher cost, regardless of whether you have the two systems available for customers.
Using a third party delivery platform means losing control over specific aspects of the customer experience, similar to how your products are delivered.
But then a Technomic study shows that, in any case, even when ordering through a third party platform, 76% of customers will believe restaurants to be at least partially responsible for any mistakes. You risk bearing the responsibility regarding elements out of your control, similar to mix ups or non-appearances and cold or damaged food because of poor delivery.
In-house delivery: pros and cons
The option is connecting with your customers simply with in-house marketing and delivery. In-house delivery gives you total control over the entire cooking-to-delivery process. You'll be able to control the timings and quality of deliveries and the food that your customers get. That means you'll need to sort out delivery yourself too.
You'll also need to take on the costs of delivery, this time including capital expenditure, making it harder to work out how productive your menu price points are. In case you're achieving higher margins per order with your in-house delivery, this can be more profitable over the long term. Not having to pay costly fees to third party platforms may also mean you can bring down your costs, making you attractive to more customers.
Your business will not have access to the boosted visibility that a third party delivery platform can offer. In any case, you'll have a more close knit relationship with your customers and that means a much lower risk of losing them to competitors. Also, it's possible to increase your online presence through other marketing channels.
Using online ordering system for in-house delivery
“But, I can't build my own takeaway platform!"
No need. Online ordering system can help. It allows you to keep your tasks in-house, without requiring the technological capabilities to build a takeaway platform yourself.
Online ordering system is also usually a less expensive option when compared to third party platforms. Yet, online ordering isn't all equally cheap. Some will charge a recurrent software fee and you'll also need to pay for payment processing separately – though with our free software, Takeaway Genie, you'll just be charged for payment processing.
Using an online ordering software, you'll maintain a direct relationship with your customers without third party intervention, so you'll "know" them better. Takeaway Genie comes equipped with marketing dashboard that allows you to see what channels – like Facebook, Instagram, or your website – your traffic and sales are coming from, so you understand what works best to build your relationship with your customers.
Advantages of doing both
With regards to choosing a takeaway platform, it's often not an either-or situation.
Many restaurants will have a hybrid model, combining the more extensive reach of a third party delivery platform and the more simple customer restaurant relationship of an in-house solution. It's truly difficult to ignore how great Just Eat, Deliveroo, and Uber Eats are for new business.
But, the takeaway dining experience starts with a menu, and it's a disgrace to deny your customers a kind of your brand — an impact the homogenizing interface of a restaurant market place might struggle battle to deliver. But an online ordering platform can give this more immersive experience, as is fit to your local customers, who will discover you directly without third part mediation. Persuading your normal customers to transfer to direct ordering can help you cut costs. What's more, it's a better option for your customers as well, if it's the less expensive choice for them.
The other argument against over-dependence on a third party platform is customer data. Having these platforms remain between your restaurant and your customer means that you lose this data. However, the wealth of possibilities that this data offers will turn out to be increasingly central to the success of your brand. It will be the contrast between building up customer relationships — through celebrating special events, customized promotions, tailored recommendations and targeted on marketing and turning out to be "simply one more restaurant".
But, restaurants' ability to own their customer relationships is already in a precious position. Third party delivery platforms have huge customer bases, and companies like GrubHub have started introducing their own loyalty programs to increase stickiness. The hotel business where the expansion of third party booking platforms has meant hotels, at this point directly own the relationships with their visitors, at least online, offers a potent forecast of what lies ahead for the takeaway business.
Brushing off third party platforms is maybe unrealistic and foolish for most restaurants at present. But, it is crucial that restaurants look to alternatives like an online ordering system so they can keep on supporting their direct relationships with customers.