The online food delivery industry is forecasted to be worth $2.4 billion in seven years and restaurants are starting to jump on board. However, it is important to consider the advantages and disadvantages first before choosing a delivery service. Is a delivery service good for business growth? In 2006, customers had to order their meals through fax machines. Today, online food delivery has grown into a $600 million industry and may grow to $2.4 billion in 2025.
Restaurant owners who want to offer a delivery service must understand what each platform offers. Delivery may disrupt dine-in customers so restaurants might have to invest in a store design that will fully integrate delivery and take-away system without disrupting the customers’ dining experience. It is ideal that dine-in customers do not see the delivery guys in operation even if it’s fully functional.
Some delivery partners require restaurants to take responsibility for the refunds to customers for missing order items and it could take plenty of time and effort to compare their statement to the orders at the restaurant. Because of this, some restaurants find delivery to just be an added stress that they don’t need on busy days.
Delivery is a different customer experience so restaurants have to consider all variables such as menu and packaging. They should understand the flow from the kitchen to the pick-up of delivery partners and ensure that high quality food is delivered fast to customers. Restaurants have to be creative and flexible to succeed. They have to know which types of food can be delivered. Packaging and delivery time seem to be the most important for customers to come back so heat-proof bags and smart algorithms may be key to optimise deliveries. Restaurants should also consider the demand and location to make sure they will increase orders by offering a delivery service.
Uber Eats charges a fixed commission of 35% on all orders while Deliveroo and Foodora negotiate with the restaurant partner in terms of commissions. Menulog charges a fixed 14% commission for the ordering platform and leaves the restaurant to organise deliveries. Menulog charges only 7% for an “order now” button that the restaurant can put on its own website.
There are over 150 virtual restaurants operating on Uber Eats in Australia with underused kitchen space. These are delivery-only kitchens with no bricks-and-mortar stores and upfront capital costs. Deliveroo even uses data to identify customer demand in underserved areas to reduce risk for restaurants. The future of the delivery industry involves advanced technology such as world-class apps and delivery robots. It may even partner with Amazon’s Alexa or Sony PlayStation in the future.
If you are a restaurant owner, read up to find out which platform suits your venue and food best. This may help you capitalise your growing market better and reach more customers to maximise your profits.
As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision. You can click here to speak to experts who specialise in the hospitality industry. We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.
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