Why Delivery Is a Must Have Service For Restaurants

You can greatly enhance your food business by simply integrating a reliable delivery service.

Before the Coronavirus outbreak, online delivery services were already in the process within the restaurant enterprises. Customers prefer convenience in most spheres of their lives. This, together with technological development, was changing restaurant operations, right from food preparation in the kitchen to serving it to the end consumer.

Then, the pandemic came and accelerated the delivery services requirement for restaurants. Food delivery and takeaway became the only alternatives to the premise-based services. Primarily because of safety and necessity. Then, the embracing of online models for business by most restaurants all over the world. 

How Food Delivery Services Can Enhance Your Restaurant Business

Food delivery services have the potential to broaden your consumer base as well as extend your business coverage. This results in increased sales and consequent profits. According to Baron Christopher Hanson, a development policy and turnaround administration adviser, restaurant delivery services are a must-have.

So why is it so? Here are some justifications for providing food delivery services:

Enhances Customer Reach

Taking your restaurant business online will enable you to reach as many customers as possible compared to your traditional restaurant.

Especially when it comes to specific groups such as students, singles, millennials, office workers, and so on, providing online ordering alternatives can get your restaurant ahead of the competition because these groups of people crave delivery food. Some of them may not have encountered your business until you start retailing your food online.

Whereas in-house delivery has various benefits, enlisting your business on third-party platforms such as e-tab and DoorDash will boost your online discoverability. These are apps used by many hungry customers globally as industry experts estimate the worldwide online delivery services to get to $154.3 billion shortly.

Increases Business Opportunities

Even if you lack enough service tables, food delivery service offers an excellent opportunity to sell your meals. A traditional restaurant is restricted by its maximum capacity. However, you can solve this problem with a delivery service.

Moreover, providing online offers is a promising way to sell your food during non-peak hours, when your restaurant isn’t very busy. For example, during 2019, delivery customers ordered snack-sized meals and meals for breakfast more than ever before. Hence, restaurants with delivery services could easily tap into the readily available market.

Also, a well-structured menu motivates selling across. Your online buyers have enough time to read through your menu if it’s categorized, clear, and concise. To be able to make informed decisions.

These customers will most probably order more items if you make it compelling to order an appetizer or a drink alongside the main meal. Inducements such as free delivery for a stipulated order amount or deductions for package deals can work for you.

Boosts Incomes

Another notable advantage of engaging food delivery services is the additional profits you’ll make through attending to more consumers than would have done in the traditional table service arrangement.

In case you simplify your delivery services by incorporating your delivery funnels into your POS, you don’t necessarily have to add employees to deal with incoming online orders. Because your whole flow of orders will be automated, making it possible for you to begin selling meals online without more staff and labor expenses.

Besides, you don’t have to rent different locations to serve your consumers by ordering online, equipping a restaurant, or purchasing separate kitchen equipment. Moreover, your food prices will still be the same.

Whereas accounting for the fees paid to the food delivery service providers is real, the regular customer ordering food online is always ready to meet additional charges for the convenient experience and food quality.

Enables Your Business to Stay Competitive

Serving a variety of remarkably tasty food is insufficient to make you stay ahead of the competition, especially in this extremely competitive industry. There are a lot of challenges encountered by restaurant owners in regards to sales acceleration and business development. Food delivery applications such as e-tab offer a simple solution to these concerns. Thanks to the food delivery strength, most of your conventional restaurant household brands are prospering.

FAQs Before Enforcing Food Delivery Service

Mirus.com singles out the following as the commonly asked questions.

Is Food Delivery Right For Your Restaurant Business?

No topic is hotter in the restaurant space than delivery today. An amazing shift is taking place where customers want their favorite food, and not just pizza, delivered wherever and whenever. For me, delivery became a new reality and not just a fad when I saw McDonald’s advertising during the recent World Cup matches that they would now be delivering food. This was no longer a test in a few US markets but is now ready for prime time by a heavy hitter in the QSR realm.

People are projecting that delivery will do to restaurants what Amazon did to retail. I think it is too early to tell for sure, and caution is wise. Nonetheless, I am seeing many restaurant companies testing delivery in select markets and many more are discussing it. However, before you decide to plunge into this new channel, there are a few questions you should ask yourself. 

Whose Customer Is It?

How are your customers going to request a delivery? Will you hire your drivers and create your e-commerce website, or will you use a third-party delivery service? The first option will take more time and money before you can start comparing to a 3rd party option. But, which alternative do your customers prefer?

Examples of restaurants that have built their platforms include Panera and Domino’s, and both efforts are considered successful, albeit expensive. It’s simple, the customer goes to the brand website and orders. An upside to this approach is your customer sees only what you want them to see and their experience is directly connected to your brand. Another plus for this option is the ability to add other programs and services beyond ordering, such as loyalty and payment.

McDonald’s decided not to build their delivery platform, and instead forged a deal with a 3rd party. The 3rd party option can potentially blur the customer’s perception of who they are buying from. The customer goes to the website of the delivery company that has dozens or hundreds of restaurants and has to find your brand. The delivery company might have its loyalty or frequent diner program, but it isn’t yours. The question is whether the customer’s loyalty shifts from the restaurant brand to the delivery brand or vice-versa.

Can We Make Money?

The math of calculating the total cost of delivery is complicated. Delivery will affect the number of customers you service, labor, food cost, food packaging, and delivery expenses including vehicle insurance. Your assumptions on these revenues and costs are critical to evaluating the profit impact of delivery.

The calculations for doing delivery on your own are more complex than for 3rd party delivery because you have to make capital investments that are going to be on your balance sheet for years. If the experiment fails, it could result in a costly write-off of your earnings. One investment decision you will have to make is whether your web order is going to automatically flow into your POS as they do with Panera and Dominos. The costs of this depend on the POS you are using and the cooperation you get from your POS vendor.

I have highlighted downside issues with profitability, but you also need to calculate the possible upside scenarios. For example, if delivery expands your customer base significantly, or increases the frequency that an existing customer buys food from you, the profit impact could be very large. Take your time and calculate carefully.

Will I Get All My Profits?

Finally, think about how the funds generated by the delivery sales end up in your bank account. How long does it take to receive the funds? Where is your audit trail so you know that you have received all the money you should? These questions apply to both options.

If you build your e-commerce website, you will be handling credit card transactions directly. Remember PCI? The security of those transactions is now your responsibility. Yes, you already have a processor for your POS transactions inside the restaurant, but depending on the volume of online orders, you may choose a different processor for the website. Either way, it is reasonable to assume that the timing of payment to you, and the issues that will need to be resolved (e.g. missing authorizations, etc.), will be similar to your current POS transactions. The upside to this option is that you can see everything your customer does on the website, and that gives you a big advantage in resolving issues with them and controlling the level of service provided to them.

If you choose to go with a 3rd party, the timing of payments, the audit trail to back up those payments, and the procedures for dealing with customer issues have to be defined in detail. The 3rd party is now the customer-facing part of your operation, both for ordering and the delivery. Any dissatisfaction with the 3rd party may end up damaging your brand. Today, several companies cannot reconcile the activity they see in their POS with the activity recorded by the 3rd party delivery vendor. Without a clear and easy reconciliation process, you could be spending lots of time determining whether the amount you were paid by the 3rd party was the correct amount.

Many 3rd party delivery systems cannot automatically push the order into your POS at the appropriate location. In this case, you must consider the operational impact of receiving orders from your 3rd party and manually entering them into the POS at each location. Next time you go out to a casual dining or fine dining restaurant, look for a collection of tablets on the hostess stand, or near the bar. I have seen as many as four tablets, each dedicated to a different 3rd party delivery service. You need to make sure someone is tasked with constantly monitoring these tablets and when an order comes in, manually entering the order into your POS.

Is My Food Inventory Up For The Challenge?

While McDonald’s believes they can deliver hot and tasty french fries, some food just does not travel well. Can you imagine having your next ice cream cone delivered? The delivery side of your business may not include all of your menu items, just those that can be delivered with the minimum of compromise on taste and texture.

Before you even begin to implement any food delivery plan, make sure your team imagines how your staple menu will do during travel.

There is little doubt that delivery is here to stay, in some form. But, it is unlikely to affect all forms of restaurants.

Conclusion

Whether your dispensary, hotel, or restaurant is established or just starting, delivery service is the simplest way to enhance your presence online. As well as enable many people to encounter your cooking and fall for it.