July 3, 2020
The Future of Online Ordering Post COVID-19
Virtually no industry has remained untouched in the wake of the COVID-19 pandemic, but the lockdowns that have occurred in city after city have wreaked havoc on the food and beverage industry. Brick-and-mortar restaurants, bars, and other associated venues have been forced to close their doors to customers, and the opportunity to earn income because of the pandemic. Modern Restaurant Management asserts that by the end of 2020, the restaurant industry will lose an estimated $240 billion. And even though restaurants are beginning to reopen, the threat of virus outbreaks looms large and the need to reemploy lockdown strategies may come to pass, especially in regions that are already seeing an uptick in new Coronavirus cases. With the threat of lockdown and the need to social distance curtailing profits, the industry looks toward online ordering to save it.
Delivery Services See Major Increase in Business
Who could have imagined that the key for McDonald's to keep its billions served would be food delivery services like Uber Eats, DoorDash, and others? The fact is, just as these services began to go mainstream, the pandemic struck. Restaurants and eateries already comfortable with online ordering and these delivery services had an immediate safety net; they could still function on a carry-out and delivery basis. True, they lost staff and lost income, but they could fall back on carryout and delivery service. NPR asserts that as many as five to seven million restaurant employees are likely to lose their jobs because of the pandemic. Online ordering is one way that restaurants can continue to operate and save more jobs.
As of the last week of March, according to Barron's, "Spending on meal delivery services was up 70% year-over-year." Tony XU, CEO of DoorDash, reported that "driver earnings have jumped $5 per active hour to more than $22 an hour on average compared to one year ago." People may not be able to or feel comfortable dining out, but they can order takeout--and they're relying increasingly on food delivery services like DoorDash and Grubhub to do it.
Restaurants Make a Dash for Digital
Between February and April of this year, online ordering platforms witnessed a 169% increase in the number of restaurants employing online ordering. Before the pandemic, the online food delivery industry was expected to see a growth rate of about 7.5%, according to NPD Group Vice President and Food Industry Advisor David Portalatin, but now, that growth rate is exploding and forecasters are struggling to predict how much growth this sector may see. What is clear is that in cities where the lockdowns have been strict, some restaurants are relying on online delivery apps for as much as 70% of their business. For a restaurant to make stay afloat during this unprecedented pandemic, it's clear that transitioning to some level of online ordering is paramount in order to earn income.
Understanding the Holdouts
Not all restaurants, of course, have been interested in partnering with delivery services. Pre-pandemic, there was a concern among many restaurateurs that the fees associated with delivery service apps like Grubhub were simply too steep and would take too large a bite out of the business's profits. That isn't an unfounded fear. According to Today, "Restaurants partnering with Uber Eats typically pay a marketplace fee between 15-30%, depending on the services they select. This fee supports operational costs such as payment processing, customer support, credit card and marketing services, as well as employee onboarding and wages."
Because of these fees, many restaurants opted to rely on their own delivery drivers or simply avoided delivery service altogether. But that was in a pre-pandemic world. Now, many online delivery services are choosing to discount their fees for restaurants and some cities are even making emergency mandates to cap those fees on third party ordering apps. Uber Eats has actually waived delivery fees for independent restaurants in the U.S. and Canada. With such incentives, increasing numbers of restaurants are now signing up for these services because accepting a profit cut is preferable to not doing business.
Managing Online Ordering in a Post-Pandemic World
There is a myriad of major online ordering services that restaurants can partner with for delivery. Some of the most popular companies include Grubhub, DoorDash, Uber Eats, Foodora, Skip the Dishes or ChowNow.
Transitioning to digital ordering is not always a comfortable process for restaurants that have not dabbled in the process before. In fact, even restaurants that have contracted with third party apps for delivery service are finding it more difficult to manage and process orders because of the increase in their use.
The key for restaurants who are relying on these services is to look for ways to make digital ordering more efficient. That's where Cuboh shines. Rather than attempting to patrol numerous devices and platforms associated with online ordering, the restaurant can condense them all into one convenient tablet with one interface. It makes for easier training and order management with fewer, potentially costly errors.
Improving Online Ordering Efficiency
It's true that many restaurants have struggled with the transition to digital ordering. When they contract with a service like DoorDash, they get a tablet for managing those orders. Simple enough, but they also want to partner with Uber Eats and Grubhub because they are aware that their customers favor those apps too. So, they get a couple more tablets. In the end, they're literally fielding multiple tablets and dealing with the need to keep them charged and managed optimally. On a busy Friday or Saturday night, the odds that an order will be missed or will contain missing items is great.
Cuboh eliminates the confusion associated with managing multiple third party delivery app devices. It takes the 'one ring to rule them all' approach to online ordering management--and the streamlined nature of the platform is a thing of beauty. Gandalf would approve. Cuboh delivers all orders in real time to one device. In fact, restaurants can manage not only their delivery providers from Cuboh's dashboard, but also their menus and their own delivery orders. This makes for a far more efficient system that even short-staffed kitchens can operate.
Online ordering is not a trend that restaurants should ignore lightly. Retailers and grocery stores are also clamoring to partner with third app delivery services to entice customers to shop during this post-pandemic era. For many businesses, it is the only way to sell. Even as brick-and-mortar restaurants open back up, they're forced to eliminate tables in order to promote social distancing. It will be vital for these restaurants to make up those lost profits in some way, and they're looking to online ordering to help them keep the doors open. Restaurants that are ready to cross the digital divide and contract with online delivery services should contact Cuboh to help them streamline and manage their digital ordering process for improved success.
You talked, we listened! We've released a new dashboard with updates including new and improved reports for your Order History, Items, and Modifiers. And with the click of a button you can now aggregate or compare all of the data from your delivery apps. Don't want to see data from a specific app? Deactivate it. The sky is the limit!
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