Why your restaurant should not be using a third party delivery service

The popularity of third party delivery platforms, such as Just Eat, Deliveroo and Uber Eats has been steadily on the rise around the world in recent years but has significantly growth during the pandemic, with restaurants and takeaways turning to these online ordering platforms to ensure a steady revenue whist lockdown restrictions were in place.

According to a study carried out by Buyer’s Edge Platform carried out following restrictions being eased, demand for takeout or delivery at home stood at 42.3% of consumers.  This is higher than pre-pandemic figures and is the study indicated that this is expected to continue for the foreseeable future 

Whilst these third party platforms can provide a convenience to restaurants providing orders and taking care of delivery, with reported excessive charges that can be as high as 48% of cost, it raises the question:  Should Your Restaurant Use Third-Party Food Delivery Services?

The drawbacks of third party platforms

The first and arguably most significant for restaurant owners is that using a third-party platform means paying the high fees that the company will charge. The three most popular platforms in the UK will charge commission per transaction. With commissions usually starting at 20% per transaction up to a max of 48%, can your business really afford to lose this level of income per sale?

It should come as no surprise that order errors and problems are another downside to using a third-party platform, with consumers reporting 9% more issues with missing items at restaurants using third party platforms to direct ordering according to a recent report by the service management group.  The same report indicates that customers are far more likely to blame the restaurant for errors that occur, potentially resulting in lost future sales.

For restaurants to succeed it is essential for them to build a strong and loyal customer base.  However, users of third party platforms are the customers of the platform, not the restaurant they may repeatedly order from on the platform.  The result is that the restaurant cannot directly market to it’s customers without going through the platform and incurring additional charges for the privilege.

Benefits of bringing your online ordering in-house…

Currently only 27% of online orders are made directly to restaurants, however 63% of consumers would prefer ordering direct.  By providing customers with the opportunity to order direct it could save the restaurant £000’s in third party platform fees.

Customer loyalty is higher when the consumer is able to order direct, with repeat business at 64% when ordering direct compared to 53% when using a third party platform.

Direct orders also reduce the risk of order errors, resulting in less complaints to the restaurant and better customer retention.

The retention of customers data is another great benefit to the restaurant, enabling businesses to be able to market offers and promotions directly to their customers via email, SMS and/or push notifications.

Bespoke online ordering solutions are considerably cheaper than using third party platforms, and some online ordering solution platforms such as App4 have partnerships with delivery service providers so restaurants can still outsource delivery if needed at a much lower cost than using the third party platforms.

Bespoke Online Providers

App4 Developments, the UK’s leading independent provider in online ordering solutions specialise in helping local businesses to thrive and supporting their customers to order with ease. By working with us at App4, Restaurant owners have peace of mind as we charge absolutely no hidden fees or commissions and allow your solution to work in a streamlined fashion by integrating direct with our providers.

To find out more on how a bespoke online ordering solution could support your business, call us on 01332 742 514 or email sales@app4.co.uk

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