Online ordering for food delivery is more common than ever due to the heavy transition to contactless takeout food options during the height of the COVID-19 pandemic. No longer just one of many virtual concepts for the restaurant industry, delivery apps are the current restaurant revolution fueled by millions of customers no longer able to physically go to their favorite diner or kitchen.
Another of the virtual concepts that has become a reality is the widespread use of ghost kitchens, ones that operate on a delivery only basis. Ghost kitchens are becoming popular with startups and established restaurant chains alike thanks to the lower cost and liability compared to a traditional dine-in establishment.
Monitoring this influx in interest, experts are projecting that ghost kitchens could generate $1 trillion in global revenue opportunities by 2030 which will largely be supported by third-party delivery apps for order fulfilment.
More Online Ordering Means More Food Delivery
Many food delivery apps available were vital during the pandemic to help keep restaurant closures down while still providing those stuck at home with their favorite meals when they needed them most. Additionally, the revenue from delivery apps caters for many families - their children and family members - even during the most challenging parts of lockdown.
The way any kitchen, traditional or ghost, can keep up with the increased online ordering is by partnering with as many delivery apps as possible, creating a bigger reach and footprint than ever before. Restaurant technology and SaaS have made this possible by helping to manage orders and deliveries all in one place no matter how many apps you use.
Finding ways to optimize your kitchen is the secret to getting more of the revenue food delivery generates, climbing above the previous $26 billion generated by the US food delivery market in 2020 alone. Virtual concepts being rushed into reality due to the lockdowns during the pandemic have created possibly the most significant restaurant revolution in history. And the accolades go to the unique restaurant technology developed and improved to accommodate such a mass transition.
Why Restaurants Need Delivery Apps (or Online Ordering)
Here are some statistics from DoorDash's first-ever economic impact report:
As impressive as the current numbers and projected revenue increases are, it's important to remember that the biggest factor saving the industry is the fact that restaurants were able to stay open in a situation that would otherwise ruin them. Here are some statistics from DoorDash's first-ever economic impact report:
- 67% of restaurants say DoorDash has been crucial to their business during COVID-19
- 76% of Dashers indicate that Dashing has had a positive impact on their ability to provide for themselves and their family
- 88% of consumers believe DoorDash has helped restaurants during COVID-19
- 65% of restaurants say they were able to increase profits during COVID-19 due to DoorDash
- 90% of Dashers believe DoorDash provides an important service during COVID-19
Workers who lost their job due to the pandemic could find steady and fairly paid work, customers were able to help save their favorite establishments, and these restaurants could keep their food delivery open even when they had to shut their doors for dining in.
So, why do restaurants need delivery apps or online ordering?
While the article also dives into the overall market outlook, it's inspiring to see just how much of an impact it had on everyone involved with the online ordering process. Customers were able to help save their favorite establishments, workers who lost their job due to the pandemic were able to find steady and fairly paid work and restaurants were able to keep their food delivery open even when they had to shut their doors for dining in.
REALTED READING: Ultimate Guide to Using DoorDash for Your Restaurant
These extra connections in the process help to create more incoming market activity within the industry as customers are comfortable paying a little extra in service or delivery fees if it means they still get to have their favorite comfort food from their local restaurants. The drivers get paid for each delivery which means more spending power for them as consumers and the delivery company get a small fee per order to be able to continue offering their platform and service.
Takeout food and online ordering were the unexpected heroes for a majority of food establishments and customers alike. Necessity truly is the mother of invention, giving companies the push needed to realize new virtual concepts and take restaurant technology into the modern era. Now it's standard practice to offer delivery and the industry is only projected to grow thanks to it.
The proliferation of restaurant technology has been driven by a rapid increase in demand for online delivery services across numerous industries. It seems that the only chance that many restaurants have to bring in customers is to sign up for third-party delivery apps such as Uber Eats, DoorDash or GrubHub. The Covid-19 pandemic changed the way that many people purchase food and these changes are here to stay. Enrolling in a third-party delivery app has its advantages and drawbacks, however.
The food delivery industry will be worth over $200 billion before 2025. Restauranteurs must choose between signing up for a service such as GrubHub or offering their own online delivery services for fear of falling behind the competition. Here are the pros and cons of third-party delivery apps.
Pros of Third-Party Delivery Apps
You Can Reach Customers Easily
While the competition is stiff on third-party apps, you're still able to expand your reach to potential customers with little effort. The third-party service you select handles the marketing of your business and the popularity of these services means that there's a large customer base to target.
Ability to Focus on Your Own Business
Many restaurant owners choose to enroll in Uber Eats or GrubHub because they don't have the time to worry about hiring or managing delivery drivers and drawing customers to their business. Since the third-party app employs delivery drivers to pick up and deliver orders, you can focus on other aspects of your business.
Saves Money on App Development
The alternative to third-party apps is to build your own online ordering app, which can require a significant investment. It doesn't just save you money but saves time as well. Once you sign up and set your menu, you're ready to take orders.
Increased Order Size
Large delivery apps draw larger orders, which means you can expect an increase in your average check size when you sign up for one of these services. Some restaurants with their own white-label apps still integrate with one of the major third-party delivery services for this reason.
Cons of Third-Party Delivery Apps
While there's plenty of benefit to enrolling in a third-party service, many restaurants are frustrated with some of the drawbacks:
Commission and Service Fees
The biggest complaint that customers and restaurant owners have is the service fees that they pay for these apps. Delivery and commission fees eat into your margins and reduce your profits. Restaurants often pass these costs onto the customer at the risk of receiving poor feedback.
No Control Over Delivery
Some business owners would prefer to invest time and effort into getting their own delivery drivers because they have more control over their employees. A third-party service sends their own drivers, leaving you at their mercy. When a delivery driver takes a long time to deliver food or something else goes wrong during the delivery, it may result in poor feedback for something that wasn't your fault.
Limited Branding Opportunities
You don't control how your shop is set up at all with a third-party app, which limits how you're able to brand your business. This makes it harder to establish an identity with the online ordering community that distinguishes you from your competitors.
The competition for business is fierce on third-party apps and users won't usually scroll too far down the list they see when looking for food. You need to do everything you can to rank higher in search results to gain exposure. A few bad ratings can impact the ranking algorithm and harm your business. When the feedback isn't fair or is a critique of the third-party service instead of your restaurant, this can be very unjust.
Alternatives to Third-Party Apps
You could invest in an online ordering platform of your own, but it's costly and usually takes time for you to gain exposure. If you're not able to put in the time or effort to advertise your app, this investment can be wasteful because it won't deliver the results you need. Cuboh offers solutions to your online delivery needs with apps that integrate with all the major delivery platforms. Learn more about what Cuboh can do for you.
4 Food Delivery App Mistakes to Avoid
COVID-19 has impacted every aspect of our lives, but perhaps no industry has been as affected as the restaurant business. The restrictions put in place to curtail the spread of the coronavirus has caused a tremendous increase in online ordering over the last year. While online ordering offers convenience and helps limit the spread of the virus, the increase in deliveries has also caused a rise in the number of mistakes for many delivery services. Unfortunately, this has compelled many of these applications to raise their prices in order to keep up.
The influx of online orders has led to people questioning whether or not delivery systems can keep up. Even if they have the best infrastructure in place to keep track of orders, there's bound to be some mistakes.
1. Delivery App Mistakes
No one likes opening their bag of food and reaching in to begin enjoying their much-anticipated order only to discover it's not correct. An increasing number of customers have dealt with incorrect orders. Sometimes it can be a minor inconvenience on the part of the restaurant, such as the chef accidentally adding onions when the customer requested none. However, many times the fault lies with the delivery company, and these mistakes are usually more drastic. The drivers employed by the delivery system might accidentally grab the wrong order or leave something behind. In worst-case scenarios, an innocent mistake can be downright dangerous, such as when a customer is allergic to the food.
When the wrong food is delivered, it can be difficult for the customer to know where to place the blame. This uncertainty could cause them to question the credibility of that restaurant and refrain from ordering from them ever again.
2. Longer Wait Times
For some time now, hungry customers ordering food online have been forced to wait even longer than usual to receive their orders. Although this may not seem like a serious problem, it's part of a greater issue that has yet to be resolved.
The coordination between delivery apps and the lack of necessary delivery drivers has caused a ripple in the distribution process for these services. This need for more delivery drivers has forced many companies, such as UberEats and Grubhub, to increase prices based on demand.
3. Rising Costs
With almost everyone ordering online these days, it's hard for delivery companies to keep up. The rise in online ordering since COVID-19 has been substantial, and current restaurant trends aren't projected to change anytime soon.
Unfortunately, this has caused the cost of delivery services to rise to maintain the demand. While many delivery apps have adjusted the fees they typically charge restaurants for using their services, prices have only gone up for the average consumer.
4. Manage the Chaos
The days of solely using a pen and pad to take orders are all but gone, and the notion of the brick-and-mortar restaurant is trailing closely. More and more restaurant owners are embracing the ghost kitchen design, which eliminates traditional seating and relies solely on online orders.
While this format may be ideal for an era that's increasingly dependent on technology, ghost kitchens still have to manage the difficulties that come with online ordering. As delivery apps struggle to keep up with the influx of orders, kitchens need to ensure that their business is not negatively affected.
One of the central factors in their success is properly utilizing delivery apps and online ordering, which is now almost essential to survive in the current market. However, coordinating between all of the online delivery apps and the orders placed through them can be a real nightmare.
Fortunately, there are ways to simplify the process of managing orders so that you don't get left behind trying to keep up. Staying current with the restaurant trends and maintaining the proper restaurant technology can be the difference between your business succeeding and your restaurant closing down in the first year.
By stream-lining everything to one device with Cuboh, restaurant owners can process their orders with ease, reducing the number of mistakes that might otherwise occur. Instead of scouring through a plethora of devices to locate your next order, why not make it simple and use Cuboh? The platform also sends orders to your POS system in real-time, making it easy to flip back and forth between your tablet and POS device. The ability to eliminate unnecessary work is only a few clicks away.