With our lives constantly on the go, it's no surprise that restaurant companies have begun to capitalize on delivery services. Whether it be pizza delivery orders or pub takeout, restaurant owners can now optimize their business and cater to a wider customer base with new delivery service. Not only does this optimize how restaurants operate by giving them more control over their menu options and sales numbers, but it also changes the way sit-down dining works as well.
If you're thinking about adding a new delivery service to your restaurant business or just want to know more about the food delivery business, keep reading for some helpful tips.
Food delivery Service & the Restaurant market
Food delivery orders are the process of utilizing a delivery service to bring customers' orders of food items to their homes. Customers may place an order by telephone, online, or in person with the restaurant. With a food delivery app present in some restaurants, it opens more opportunities for customers who want to order take-out meals without having to go into the establishment.
The increase in sales is one of the biggest benefits for a food business company to expand into a delivery service. With more customers coming through the door, there are higher chances for increased profits with each order made from that customer's visit as well as future visits.
Restaurants that have a lot of customers can optimize their food delivery service and provide take-out items without being present in person. This not only saves the restaurant time and money but also a 20% increase in check sizes from online and delivery orders versus dine-in orders, this is according to market research.
With a higher profit margin, it can be beneficial for establishments especially for local restaurants to expand their small business by adding items to their delivery menu and hiring additional employees to do other tasks such as running the kitchen. It can also mean that they will get more food deliveries which are going to be profitable.
Restaurant business trends
In today's post-COVID recovery, the demand for food delivery businesses has increased due to people being under shelter-in-place orders and more companies offering delivery business services. In order to provide customers with these services, restaurants are either utilizing third-party delivery services for food delivery or creating their own online ordering systems.
Many restaurants have started adding delivery in order to capitalize on the growing demand. Implementing restaurant delivery services has a number of benefits including higher profits per customer, more efficient deliveries due to less staff required, and a wide range of dishes offered (with something for everyone).
It's no surprise that one of the best ways to find success in the restaurant industry is by offering take-out and delivery options. Take-outs are convenient, and efficient, and offer a variety of choices that can satisfy your current customer base - all while increasing profits. There's definitely a market for food delivery services, so if you're not already offering them, now is the time to start!
There are several technology platforms and app-based delivery companies that are making it easier for consumers to order and deliver food online. With just a few clicks, delicious meals can be delivered straight to their doors. This new trend is becoming increasingly popular and helps boost profits for restaurants by expanding their food delivery service options through a technology platform or food delivery app like Swiggy, Zomato, and Food Panda.
Revenue segmented from online food delivery alone was projected at more than $122 million in 2020 with an annual growth rate of 7.5% between now and 2024.
How restaurant delivery services are changing the food industry
The restaurant industry has had to change dramatically in order to stay ahead of the curve and compete with fast food chains. However, many small business restaurants have found ways to reach new customers outside of their location through take-outs, online food delivery service systems, and other techniques.
According to market research, in the last five years, over three hundred thousand businesses have launched food delivery services, which has become one of the fastest-growing industries in the United States. This demand is fueled by an increasing number of people who don't have time to dine out or don't want to leave their homes.
The economics of adding delivery business service can be a positive thing for restaurants in the long term because they receive better control over their delivery menu options and cater to a wider customer base. It may also be worth having an offer in place that encourages customers to come back, like 20% off their next order.
One of the most interesting aspects of food delivery service is that there are fewer risks associated with keeping extra inventory on hand, as orders may come at any time.
Additionally, food orders are often fulfilled within 24 hours which also eliminates some risk of spoilage or lost sales due to out-of-stock or over-stock products.
However, one downside is that it can be difficult to guarantee unique requests because restaurants don't have an average time to fulfill them and are limited by their menu options. Yet, this can be solved with a proper food and beverage inventory management app, such as WISK.
Experiencing food differently
Take-out food can open up new possibilities for customers, like trying something different or getting a favorite dish without having to leave the house. On the other hand, there are some things you can only get by dining in at a restaurant. For example, sitting down and sharing a meal with loved ones is an experience that cannot be duplicated with take-out.
Regardless, both choices have perks: one is the convenience of being able to order what you want without having to go into the restaurant while on the other hand, there is the social aspect of sitting down and talking with loved ones over a meal. Both are enjoyable experiences.
People like the convenience of being able to order what they want without having to go into a restaurant and wait for their food to be ready. Most also like the fact that they can order take-out and have their food delivered without any hassle. Customers also like the variety of dishes that are on a restaurant's menu and prefer to order food in person in order to customize their orders.
Take-out restaurants are also great because they make sure you don't end up with leftovers in the fridge going bad from too many days of storing them past their prime or spending time figuring out what's for dinner.
Most importantly, restaurant delivery services optimize the food experience and offer opportunities to cater to a wider customer base by providing them with take-out options.
How to do restaurant delivery properly
How to determine if delivery is right for your restaurant? Many small business owners wonder if adding delivery service is right for their establishment. Here are some helpful tips to make that decision.
1) Your venue
Venues with a lot of foot traffic may want to consider having a food delivery service because it's easier for customers to be able to order what they want without being in the restaurant.
Venues that are more high-end may not have as many people ordering take-out or delivery, but will still benefit from catering to larger groups and having a variety of menu options available for guests who are dining onsite.
2) Your customers
There are a wide variety of customers in a restaurant, depending on the type of restaurant. Customers' preferences are an important factor when deciding what type of restaurant delivery service to offer.
For instance, a fast food style eatery will have most people looking for an inexpensive meal and quick service. A more formal, high-end restaurant will have customers looking for quality and experience.
Low-cost eateries will need to make sure orders come quickly otherwise it might not be worth offering this service due to the time and effort required for preparation being less significant when delivering low-cost meals such as tacos or pizza.
The economics of food delivery may be more beneficial for high-end restaurants that are catering to larger groups or have a variety of menu options available because they are able to charge higher prices for those dishes.
For example, some repeat customers like the convenience of ordering and receiving their food without waiting in line. Others prefer to wait for their take-out order, however, receive better packaging and presentation of their food instead.
One of the most common reasons for customer complaints is service. This doesn't just mean that they received poor service when ordering in person, but also while they were on the phone or interacting with your website or app. This could be caused by an employee being rude and impatient; a delivery staff forgetting to bring something or being too slow to respond to their order.
Whatever the case may be, you need to investigate these types of incidents immediately and find a way to resolve the conflict.
If it's clear that the customer is not satisfied, there are several ways for restaurant staff members and any company representative to handle this situation to fulfill deliveries. For example, if you see from the food tracking app that they're still waiting for their food after 45 minutes, you can offer a free dessert or appetizer as an apology.
It's also important to note that customers want your restaurant to be a place where they can feel comfortable and are taken care of. Therefore, it should always have the same level of customer service regardless if they're inside the restaurant or order from home with food delivery services.
3) Your location
The location of a restaurant is critical. The method in which meals are cooked, packed, and delivered is determined by where a restaurant is located. For many businesses, having a lot of foot traffic can be both good and bad. While more potential new customers are exposed to the restaurant location, it may become difficult to handle customer demands--especially when offering delivery service.
With the advent of food delivery apps, both average consumers and business people are demanding faster service from their favorite eateries. The longest a customer should wait for their take-out order is 30 minutes. A smaller staff on hand that can prep meals and deliver them when required or utilize different delivery systems might help you achieve this goal. When a restaurant is located in a high-traffic area, they face the dual challenge of catering to those diners who want to eat in as well as those who ordered take-out/delivery.
Many small business restaurants want the ability to do online ordering in order to maximize revenue via multiple channels, but high-traffic areas can be difficult to handle when offering delivery. Some customers may not have access to an option that delivers due to location limitations. And sometimes customers are spread out all over the city or state, making it difficult for restaurants to choose whether or not to deliver their food.
In cases like these, it is usually best if your restaurant offers pick-up orders or specifies a delivery area for those who live geographically further from the restaurant or are outside of the delivery radius. This works when people are willing to drive out of their way and usually provides an incentive for shorter wait times.
4. Improve customer experience
Something that could help you stand out from others in your restaurant business is offering delivery services to attract not only customers near you but also those further away or who might become regulars. In cities especially, where potential customers could not have access to a car and are unable to get around easily, this becomes even more important.
Remember, having food delivered to customers is a whole new way to order, experience, and enjoy food. In a general sense, it's hard to imagine the restaurant industry without delivery options. As a result, the worst thing you can do is treat delivery as an add-on to your existing business. Next to food quality, providing a high-quality brand experience should be at the heart of your delivery operation.
Not to mention, since restaurant food delivery services are more flexible for dietary restrictions and people who can't leave their homes, many businesses that offer these types of service options generally receive higher customer satisfaction ratings.
Furthermore, takeout ordering offers a wider range of options, making it simple for consumers who desire various dishes without having to worry about what choices will be available when they enter the restaurant, as well as catering to bigger gatherings that may prefer to host a party elsewhere.
People can also prepay ahead of time by learning what items they want before going in or phoning in, which reduces a lot of stress while dining in with other customers waiting.
5. More efficient time management
Efficient time management is key to modern restaurant operations- especially when it comes to fielding phone calls and customers in person. Many restaurants have found it difficult to keep up with the number of people who want take-outs or delivery services on a daily basis. That's why take-out and online ordering is an options to consider.
With an online order system, customers can place the order while waiting and it will be ready for pick-up or delivery much quicker than any customer waiting at the table. This is especially helpful when ordering a meal that doesn't take too long to prepare and offers customers the ability to decide if they want their food delivered, picked up in person, or eaten nearby.
With take-out orders, the employee has the full order all in one go, therefore catering to a customer's order is easy, since the only task left is to prepare the order on time.
On the flip side, customers waiting at tables can place a new order whenever and don't expect to wait as long as people ordering out.
6. Increased accessibility
Parking is often limited depending on the location of your restaurant, therefore the benefit of delivery orders is not having to worry about losing customers that cannot comfortably access your restaurant.
Another benefit is offering food that might not be sold in moments of unpredictable or displeasing weather. When orders are taken for delivery, restaurants have more control over the food they sell, as there are fewer cancellations due to bad weather restrictions and consequently less revenue lost.
Restaurant delivery service also increases accessibility by catering to people who can't access your restaurant and catering to people who prefer take-out and minimal social interaction.
7. An alternative revenue stream
Alternative revenue streams are what a smart restaurant needs. Let's face it, all restaurants cook food and sell it to customers. But when you have the ability to offer take-out and incorporate delivery orders with an online ordering system, that's when you're really showing people your best side.
It solves two problems for most small business owners: delivery orders gives easier service to customers in high-demand times and allows you to sell food without being tied down to the restaurant's location.
In addition, delivery services offer an alternative revenue stream for restaurants that have proven successful for many businesses.
Services have been found to cover costs while providing a profit margin on top of that, with many reporting 100% growth in the areas they serve within 6 months of going into operation.
When every moment counts for big profits, why not focus on taking orders and capitalize on delivery service as efficiently as possible?
One of the main benefits of a restaurant delivery service is that it reduces the time an employee spends on the phone, especially in high-volume times.
The very nature of waiting for takeout means you have to stand somewhere, and most people prefer not to make that wait at the restaurant's front desk.
It also decreases interaction with customers because they're ordering quickly and not standing in line, which also redirects employees' time elsewhere.
In recent years, food delivery service has become a popular competition for restaurants in the past few years. For many small business restaurants, it is not always possible to have enough staff on hand to cater to both dine-in and take-out customers, which can lead to waiting times for people dining in person.
To solve this problem, some establishments will offer a limited delivery menu available for take-out and online ordering services which ensures that your delivery staff arrives on time and satisfies the customer experience.
8. Popular food categories
Adding delivery services and take-out options gives restaurant owners insight into popular food categories.
Restaurants often use these insights when they design their take-out and delivery menu in the hopes of mimicking or even exceeding what customers are looking for in take-out options.
Chicken is a popular meat option, while traditional dishes like spaghetti with meatballs also rank high in popularity.
Speaking of spaghetti and meatballs, some business owners will offer a limited delivery menu available only through their online ordering service.
It's a clever way to offer more dishes that represent your restaurant and/or new dishes you would like to possibly introduce into your in-house menu.
Dishes typically served as dine-in options are not always take-out friendly, therefore beware of the costs needed to pack up and deliver to your customers.
This is why, simpler dishes can be introduced to your take-out and delivery menu or even more popular take-out foods; which often cater to hungry customers with such cravings. This can benefit your restaurant in the long run.
9. Make up for reduced restaurant walk-ins
Adding delivery options increase revenue by making up for reduced walk-ins.
With a restaurant delivery service, you can increase your profits through online ordering because this allows you to take orders when your walk-in customers aren't there or when the weather influences the number of people physically visiting your restaurant.
Restaurants can offer delivery for occasions when customers have a lot of opportunities to eat out, such as on rainy or snowy days, or during high-demand hours. People will often visit restaurants for lunch on weekends and holidays, then order takeout for dinner.
The takeaway: more of your revenue stream may come from online orders than you first thought. According to a Full-Service Restaurant report for 2019, restaurants that offer online ordering conduct between 6 and 20% of their business this way and see a 16% increase in sales on average.
7 tips to adopt delivery service in your restaurant
1. Get the word out
Restaurants can distribute flyers and advertise their delivery services by having the phone number listed on their website, on their business cards, and in their store. They can also make sure that they have a button that says "Delivery" which links to a page that lists all the available delivery options.
To get the word out about their delivery services, restaurants can offer discounts on delivery and have promotions related to their deliveries. They can also promote themselves through social media by advertising in posts or pictures with a link that is easily accessible. The restaurant is now able to reach customers who do not live near them as well as customers living nearby.
Ever wondered about how to get more customers? The answer is simple.
Market and advertise your products through collaborations with influencers in the market. You can even collaborate with local accounts or bloggers to create a special offer like "deliveries on Fridays" for an hour window so that you retain regulars and attract new customers!
2. Be memorable
Food delivery and the restaurant market help restaurants provide an unforgettable experience dedicated to what makes them different.
Restaurants can advertise and distribute flyers with exciting wording in advertisements and social media posts, show pictures of sauces, spices, meats, or vegetables on their website for customers to choose from prior to ordering anything, and create an interactive experience so that customers are able to see exactly what they are ordering.
Restaurants should also provide an extensive menu that includes items from their sit-down experience so they can offer food at different price points and variety for customers who may not want to order delivery more than three times a week.
Restaurants can also have customization options for customers. For example, the customer could choose their protein and if they want to add sauce or other items as well as any of the sides that are available in a restaurant. Customers would then be able to see how much it costs before ordering so there is no confusion about what exactly they ordered when they see the price.
Restaurants can also use delivery services to have a more intimate experience with their customers, for instance by having delivery staff who are in charge of carrying out deliveries or sending digital signatures, so that they know who made the order and what has been ordered before making it to the customer's door.
Restaurant vouchers are a cost-effective way for restaurants to increase their delivery network. The voucher allows consumers to sample some of a restaurant's delicious cuisine without spending the full price. By not having to pay for each delivery service fee and then still delivering it, the business saves money. This cuts out the trouble of employing someone who is competent in doing all of the lifting work.
4. Consider an in-house delivery system
An in-house delivery system for a restaurant can provide the following benefits. It can help to attract more potential customers to the establishment with faster service times, which is helpful in increasing business. It can also provide a way of selling discounted products and still maintain profits, which is good for everyone involved. Delivery orders also give you more control over food handling and delivery, as well as who is representing your restaurant for those ordering from home.
A study by Simmons & Lehman (2001) found that people who order their food through an online delivery service spend about $3 per order on average. The study also found that most people who use these services are young adults. So it could be said that providing an in-house delivery system will promote healthier eating habits among young adults as well as provide other benefits like increased profits and fast service times.
Checklist for In-house restaurant delivery service:
- Get online ordering technology platform
Automate your restaurant's food delivery by installing online ordering software that works with your POS system. Third-party services like GrubHub may allow you to deliver food, but they don't always connect well with your Point of Sale system. By using a web tool that processes payments and integrates with your POS system, you can reduce the number of manual errors and save money in the long run.
- Staff up
You must then estimate your staffing requirements. Is your staff able to take care of every step in the ordering process, from preparation to wrapping, and delivery?
If you already have a team, be sure they can handle the workload of delivery orders. Determine if you need to hire your own drivers and if you're looking for delivery staff, seek recommendations from other restauranteurs. You may even seek restaurant partners to create a driver co-op.
For your delivery business, make sure your own delivery drivers hold valid driver’s licenses, excellent driving records, and superb customer service skills. If they own their car, it's an added bonus.
- Provide your restaurant with delivery vehicles
Consider whether you want to run your own delivery fleet or if your own drivers should use their own vehicles. If you purchase a company car, you will have more control. The initial expense for this may be rather high, but you could potentially write off the monthly payments as business expenses.
You have a number of alternatives when it comes to adding delivery vehicles.
- Although cars are the most costly method, they have many advantages for food delivery services- especially in bad weather. Cars hold large quantities of food, drivers appreciate the comfort, and customers can be located further from the restaurant.
- Motor scooters and motorbikes provide a nice compromise between cars and bicycles. They are less costly than automobiles but can drive more efficiently in traffic, although they may only transport smaller amounts of food and aren't temperature controlled.
- While bikes are the most affordable vehicle to operate and maintain, riders are limited by how much they can carry which will limit your delivery radius.
If you want your delivery drivers to use their own delivery fleet, plan on compensating them for gas and upkeep, as well as ensuring they have commercial vehicle insurance.
- Train your delivery drivers
You can always find and hire your delivery driver for your restaurant by considering several options, whether you use your own delivery service or someone else's. If you don't obtain enough orders to justify hiring a full-time delivery driver, you may utilize third-party services.
You could hire someone to drive and cross-train him or her to handle deliveries as well as other restaurant responsibilities. The delivery drivers would be in charge of growing the business, searching for new consumers, and keeping them satisfied. So, it's crucial to provide them with a training program on delivering orders and customer service.
If you want your delivery service to run smoothly, it is essential that you develop a delivery system and teach your staff how to follow it perfectly. Also, optimize routes and manage communication between new pickups and deliveries. Even though we are in the post-pandemic, it is still important to follow safety measures such as contactless purchases and deliveries.
Make the most of your customer service training program by providing customized services that set you apart from third-party delivery companies. After all, your delivery drivers are an extension of your front-of-house staff. Just as you would train your FOH team, give your drivers the same level of training. That way, they know how to communicate delays graciously, where to leave insulated bags of food for customers, and how best to interact with them.
Rather than shelling out hourly wages to hire drivers, you could consider working with independent contractors who use their own vehicles to deliver food orders as well.
- Prepare your delivery area and make sure you have the proper delivery equipment.
To guarantee a high-quality drop-off, you'll need to invest in delivery driver gears and the appropriate restaurant equipment. When adding delivery to your options, the minimal amount of supplies you'll need are insulated delivery bags, takeout containers, and plasticware.
You'll also want to make sure your delivery area is up to par. This means having a system for how orders are delivered from the kitchen to the car. You may need new shelving, additional small appliances, or an upgraded point-of-sale system that can manage takeout and delivery orders simultaneously.
You can increase customer satisfaction by placing a thank you note, reheating instructions, promotions, and information about your COVID-19 safety measures in each delivery bag.
5. Delivery tracking system
The Delivery Tracking System would allow restaurants to schedule deliveries and track how many orders they have for the day and if they are running low on a certain type of food. It would also provide customers with an idea of what time their order will be arriving. This system can also help make sure everything is up to date and in working order on the restaurant side.
You won’t ever run out of any ingredients again! With this system, you can see exactly when your next shipment is coming in so that you always know what ingredients are available. And with our customer-facing app, it’s easy for them to track their order and see it coming up.
6. Consider an online order manager
Nine out of ten customers are ordering takeout from a restaurant that has an online order. Restaurants can consider using an online order manager to make sure they're as accessible as possible to new customers. Their job entails overseeing and handling all online orders while making sure that each order is properly prepared and distributed on time. A restaurant should make sure that there's a website or app for customers who want to order food from a location other than the restaurant.
A restaurant company can benefit from an online order manager by making the ordering process seamless. To make the process easier, a lot of restaurants offer an online order form that is fairly straightforward to fill out. The website or app for the customer is sleek and serves as a hub where customers can view all the menu items, specials, and promotions. On top of that, it provides a way for customers to review their orders and communicate with staff members if there are any questions or concerns about their food.
7. Third-party delivery services
There is another method for restaurant businesses that want to provide delivery other than hiring employees or independent contractors: partnering with a third-party delivery service. Some businesses choose to instead contract with third-party services companies that handle all deliveries themselves. Similarly, when working with a platform like DoorDash, businesses can utilize a fleet of drivers to fulfill local deliveries as orders come in.
Third-party food delivery services, like GrubHub and UberEats, are on the rise. In one month alone they’ve garnered $600 million in sales from restaurant clients who take advantage of these additional distribution channels to sell more food items while also expanding their customer base. But at what cost? The proliferation of third-party delivery services makes it easy to get a pizza delivered right down the street, but this convenience comes at a price.
Third-party services for food delivery:
- Offer cheap prices for restaurant clients because they’re not paying for labor and overhead costs like restaurants are.
- Offer delivery, which is an essential part of the customer experience. When people order in advance online, they expect to be able to track their order in real-time and have it delivered at a specified location.
- Make things easier for the customer, however, when customers are paying with an app, merchants don’t get any feedback about how satisfied they were directed by the restaurant itself.
The number of third-party food delivery platforms is on the rise, which makes it easy to get a pizza delivered right down the street. However, this convenience comes at a price. The proliferation of third-party delivery services makes it easy for customers to order in advance online and expect to be able to track their order in real time and have it delivered at a specified location.
Restaurants with third-party delivery services can gain by integrating with their POS system. This way they can get feedback on how satisfied customers are and make adjustments accordingly. It is also easier for them to have a wider customer base while also being able to sell more food items and making things easier for the customer.
Not only do third-party delivery platforms increase their reach to a wider customer base, but they also double as marketing platforms. With well-known food delivery companies, you have the potential to be seen by millions of their customers. You'll be able to offer your menu to people who are outside of the typical walking distance.
Restaurants can also gain feedback from customers and make adjustments accordingly through the food delivery app, which gives insights into their business and their projectors.
In addition, most of the delivery platforms hire their delivery drivers as independent contractors through an online application process. After they pass a background check and are approved, they're given access to the app where they can start picking up orders. The nice thing about working with third-party delivery companies is that you don't have to worry about managing the drivers or paying for their gas—it's all taken care of by the company.
The drawbacks of food delivery
Increased wait times
It does take time for restaurants to pack up orders and deliver them, so there is a trade-off in either taking on a team member or hiring third-party services that can pick it up from your restaurant.
Some people actually like waiting for their food, while others do not. It's a bit of a gamble when deciding to offer delivery because people can be in-patient or see it as a distraction from their busy day, and they may ultimately choose elsewhere.
Most customers will expect that the same quality of service is provided when they order online as they would when they're visiting the restaurant in person. One example of this is if the order is taking longer than expected, then the customer might just cancel their order because it's not worth waiting any longer.
As people also expect that their food is being made fresh and that it will be at peak quality when they receive it for pick-up or delivery, so you have to make sure your employees are able to handle both takeout customers and those who order online. Ensure online orders won't take any longer than walk-in customers by factoring in an appropriate time frame for preparation before setting anything in stone. You may consider investing in technology such as a point of sale system and hiring the right team members to manage your online ordering system to provide an equal service to both walk-in customers and those ordering on the go.
Extra staff training
With restaurant delivery services, it's important that employees are provided with a proper training program to handle the specific needs of both walk-in customers and those who order online. This includes the customer's ability to order in different languages, or if they have a dietary restriction.
For example, if your restaurant is serving gluten-free items and has someone with celiac disease working at the front desk who can answer questions from customers ordering online, then this will keep them happy when eating out on their own as well.
As long as the service you offer in-house transitions into your delivery operations, you can continue to foster a good restaurant delivery service reputation and one you would be proud to be known for.
Encouraging your team member/s to ask customers to leave a review is beneficial, however, be weary of being too pushy. Make sure you offer a humbling experience where customers are encouraged, but not forced to leave a review. Anything from positive feedback on social media, to Google reviews, can increase sales and drive future customers to you.
Even though restaurant delivery service is a growing trend and has been increasing in popularity year after year, it does come with some expenses you may not know about.
When it comes to food delivery service, you may be wondering about the hidden expenses. There are a couple of things you should take into account that could cost extra money. For example, if you want to hire more staff, hire your own delivery drivers, or outsource your deliveries to third-party services, that will obviously add to the total amount spent.
Another expense could potentially be investing in delivery vehicles (like company cars, and/or bikes), additional restaurant supplies for take-outs, and other necessary items for your own vehicles.
Another hidden expense is the additional space needed for storage--you'll need to have coolers and freezers on site for storing all of the ingredients and perishable items that people order in advance with their order. It's easy to get overwhelmed by this expense at first, but it can be done by just taking one step at a time- for example, start by ordering only one freezer and cooler until you see how it works.
As mentioned several times before, your delivery menus may be different when you introduce take-out, therefore producing special a menu for takeout may also be another hidden cost. However, the more convenient the dishes are to pack up for delivery, the better. Some other costs come from regularly buying take-out food containers, bags, take-out cups, utensils, condiments, napkins, and other restaurant supplies.
It's also crucial that restaurants understand potential liability and how they can help protect themselves with restaurant insurance. Restaurant owners might be required by local, state, and federal law to obtain general liability insurance from a company that also offers food service coverage.
General liability insurance is a form of commercial insurance that protects your business against financial ruin if something goes wrong with the preparation or serving of your meals. It covers any injuries sustained by customers as well as legal costs incurred in defending themselves against accusations about causing food poisoning or implying you misled or slandered them. That is why, in most cases, general liability coverage is the first kind of insurance that food and beverage business owners purchase.
In today's modernized era, consumers are more willing to order from restaurants that offer delivery services. One of the reasons for this is because it expands the marketing potential of the restaurant and makes meal deliveries convenient for customers, especially those who don't want to leave their houses due to a busy schedule or limited time.
Furthermore, many people place a high value on convenience when paying for food. As such, it's likely that they will be more receptive to your price point if they know they don't have to leave their home in order to get quality food delivered right to their doorstep.
Recent statistics show that as many as 73% of all American adults had used pizza delivery services at least once in the last year. This is huge considering that over half of those went on to order pizza delivery from the same restaurant in less than three months.
We can see that increased food delivery is a trend, but it's not without its own pros and cons for restaurants. We are turning into a society that expects their orders in no time at all which has led restaurants to make orders more convenient and hence driving up profits.
Even if your restaurant focuses on one type of delivery menu or cuisine from only one region of the world, you can still provide a delivery option for customers who want traditional dishes outside of their comfort zone — all while catering to your reoccurring customers' needs.
Food and Beverage delivery services increase profit margins because they're less expensive than producing and running a bar, restaurant, or cafeteria.
Disconnects from your restaurant atmosphere
The atmosphere in your restaurant and delivery can be different. One example of this disconnection is music, where you may want to have a mix of upbeat and mellow tunes when delivering food as opposed to what's playing inside your establishment.
Another potential disconnection could occur with certain items on your menu that don't translate well for take-out orders, such as those dishes requiring more time or space (such as an elaborate plating).
Additionally, you will lose some of your ambiances when you have people sitting in their living room, eating food from a restaurant. Most of the time, the restaurant atmosphere is part of the enjoyment of the food and may even increase people's appetite if designed with the customers in mind.
The other drawback to do with the delivery service is that people may expect your take-out meal to look like what they are used to receiving from your physical restaurant or other restaurants. You will need to account for these expectations by either staying perfectly true to the teriyaki or pizza image or making sure your outside packaging is appealing in order to take advantage of your marketing potential.
If these differences can be managed successfully, there are plenty of benefits attached to offering delivery services: increased profit margins; catering better to customers who live in areas lacking quality restaurants nearby; and providing convenience during busy times, like evenings or weekends, such as for people juggling work schedules while still finding time for leisure-time.
Additional delivery and menu dish fees
One of the possible drawbacks of delivering food is that you have to pay for delivery costs, which can be substantial if you're often sending out a large number of deliveries. Customers may also not want to pay an extra delivery service fee if they see that the cost is too high or they may pay, but avoid repurchasing from your restaurant.
It has been observed that customers are not happy or enthusiastic about paying for delivery. Some people believe this is due to changes in the food industry, such as a lack of options and increased prices.
Others believe that it has to do with the way that restaurants have changed their menus to reflect current trends. Restaurants now provide less variety and offer higher prices in order to compensate for their lack of variety. Customers may also feel like take-out places charge high prices because they know there is no competition near them.
Top 3 complaints customers have with restaurant delivery service
It may surprise you to discover that simply delivering meals isn't always enough to satisfy your hungry customers. And having an ineffective food delivery service is worse than not providing delivery in the first place.
In the food service industry, poor delivery is often disastrous. These are the three most common complaints among customers that will almost certainly result in a restaurant's failure to deliver good service.
Missing food items
Customers are paying for 100 percent of their meal, which is a major issue when they receive only 90 percent of it. This happens all the time, and the main reason is that for example is, a customer's order sent out with missing items. If you don't have the proper oversight, your food delivery service might send out orders without drinks, sides, extras, or even an entree or two.
Having somebody check each delivery order before it is given to a driver will prevent missing items. Also, having your third-party online orders go straight into your POS rather than being put in from a separate tablet will save you time and ensure accuracy.
It's also possible that the delivery drivers may be eating the food during transport, which is more common than you think. With nearly 30% of drivers admitting that they've eaten a customer's food before, this could be a real thing. Use tamper-proof packaging to avoid driver nibbling. Use stickers, for example, to seal food packaging as a way of ensuring that no one has handled it before it reaches the consumer's home.
Less control with the delivery
You also have less control over a customer's experience with delivery whether you use your own restaurant delivery service or a third-party delivery partner. Customers might think badly of your restaurant because of delays such as traffic or road conditions, making a wrong turn, or food that arrives cold or is inadequately prepared after the journey, even if those have nothing to do with you.
Food that gets cold or is poorly presented after delivery may damage a customer's impression of your restaurant. If this happens, you are lacking the opportunities to correct something that went wrong since you aren't present when customers consume their orders.
By using a visual dispatch system, you may schedule deliveries and you can see exactly which orders can be sent out together in order to minimize travel time. You’ll also have color-coded indications of late orders so that you can better prioritize and update customers regarding their food’s ETA.
By establishing delivery zones, you will avoid disappointing customers with late or incorrect deliveries. If a customer's house is 5 miles from the restaurant, they will understandably expect their food to take much longer than someone who lives 2 miles away. Having an open-ended delivery window like "Your order should arrive in 35-50 minutes" isn't enough because people usually think optimistically and get upset when their food arrives on the high end of that estimate.
If you want to be more accurate with your delivery times, add in minutes when setting up delivery zones that are further from your location. Some systems base their ETAs on current traffic conditions, so customers always know when to expect their food.
Proactively setting the right expectation for delivery times with customers is the best way to manage customer experience when long wait times can't be avoided. This way, delays are not seen as "late" deliveries.
Incorrect Online Ordering Menus
If you've ever been a customer and looked for something specific on an online or delivery menu but couldn't find it, or found the perfect dish only to learn it was unavailable, you understand how frustrating that can be.
You can avoid this scenario completely by using a POS system to automate your menu maintenance. The ideal POS will ensure the correct items are displayed for each restaurant, automatically synchronizing pricing and out-of-stock items with the in-store menu. This means your consumers will never be disappointed by ordering something from your restaurant only to get a call telling them the thing is not available there or is unavailable.
Switching to takeout and delivery only
As mentioned earlier, restaurants can switch to takeout and delivery only by integrating with their POS system. This way they will be able to receive feedback from customers and assess how satisfied they are and make the required adjustments accordingly. Restaurants can also make it easier for the customer, a trend that is on the rise.
A term for the most extreme case scenario is a "ghost restaurant", i.e Mr. Beast Burger. It is a restaurant that has no staff and instead relies on third-party food delivery services. Ghost restaurants keep their prices low by not having labor or overhead like traditional establishments. But this can lead to a lack of customer experience and satisfaction that could be attributed to poor food quality--or worse yet, customers associating the job of the third-party service with your restaurant's capabilities.
This trend is growing in popularity because people are expecting that as soon as they order online, they will be able to track their order in real-time and have it delivered to a specified location.
Some of the disadvantages of switching to only takeout and delivery are that several restaurants may struggle to find the labor to work with and will also be lacking in overhead. If a restaurant were to offer takeout and delivery only there might be more potential for mistakes when handling food-related items.
A pro of switching to takeout and delivery only is that it can make things easier for customers by making the process less complicated. For example, instead of going out to find food in the area, waiting in a line, or standing outside in the cold; they can order food from the comfort of their home.
As seen in this example, there are many advantages and disadvantages to going with takeout and delivery only. It is a trend that needs more time before being fully assessed but it does offer opportunities for restaurants to reach out to wider customer bases while also growing as business ventures.
To sum up, there's a market for food delivery that has been around for some time now. It started as an alternative to those who didn't want to cook but then it became so much more than just take-out or pizza deliveries! The convenience and the increase in sales are what make restaurant delivery services worth investing in.
Are third-party delivery services more effective than an in-house delivery service?
The size and complexity of your business, as well as the investment cash available for delivery, the number of orders, and other factors, will all influence your choice. You'll need to weigh each model's advantages and disadvantages against each other. Consider how each option fits into both your own principles and those of customers.
There are many advantages to using third-party delivery services, both for customers and restaurants. To name one, for restaurants, the biggest advantage is the ability to quickly get set up and outsource the entire delivery process with little or no upfront investment. Although it's a highly competitive market, restaurants profit from exposure to the platform's hungry clientele. What the businesses give up for access to that audience is a portion of their earnings margin, which for many companies, are already razor-thin.
Restaurant owners often times have to sacrifice quality control in order to get food delivered quickly. With many of the delivery drivers being independent contractors that lack incentives for excellent service to deliver food, it's no wonder why so many restaurateurs would rather take charge of the entire experience.
On the contrary, running your own restaurant delivery service or in-house delivery service entails a major compromise between controlling the delivery process with speed, quality, and cost in mind against simply operating it yourself. Most customers prefer to cut out the middleman and order directly from the restaurant to avoid paying a delivery fee.
In addition, running your own restaurant delivery service allows you to oversee the customer experience from start to finish. An in-house delivery service demands a considerable upfront cost in staff and vehicles to manage a large number of delivery orders. This means running a separate type of business with added logistical concerns. Therefore, for a restaurant that is always busy, having your in-house or own delivery service in addition to regular operations can easily use up time and resources.
To help you decide which applies best for your restaurants, here's a rundown of the comparison between a third-party delivery service and an in-house restaurant delivery service.
Third-party delivery service pros
- It's simple to get started and accept orders.
- Attract new customers without breaking the bank on marketing expenses.
- Ability to handle more orders at peak periods
In-house delivery service pros
- There is no loss in profit.
- You're in charge of the delivery experience.
- Maintain direct contact with clients and maintain customer data
Third-party delivery service cons
- The platforms have a very competitive environment.
- It's risky to rely on platforms.
- A delivery fee and percentage of your total sales will be charged in order to schedule deliveries with a third-party delivery partner.
- Operations can be complicated, with orders coming from multiple platforms.
In-house delivery service cons
- The start-up costs of running a delivery service
- Both delivery vehicles and your own drivers must be kept up-to-date with maintenance.
- The risk of being overwhelmed and bogged down during times of high traffic
Third-party delivery service is best for:
- Bigger chains and franchises make a lot of money per sale and have high order volumes.
- Fast food restaurants are designed to fulfill a high number of orders quickly
Takeaway restaurants with the potential to reach millions of consumers
In-house restaurant delivery service is best for:
- Small business restaurants that want to have more control over the customer interaction and experience
- Local restaurants with a solid following
- Small-town eateries that place a high value on customer service
You are in control of how you expand your food delivery
The bottom line is that you are in control of how you expand your restaurant food delivery business.
You can either partner with third-party services or develop your own delivery system for your food delivery. While it may be tempting to outsource all of the work and take on new delivery partners, remember that you are the one who will be responsible for maintaining quality and customer satisfaction. Whichever route you choose to fulfill deliveries, make sure that the customer experience is exceptional and that you are able to keep up with the demand for your food delivery services.
Your food delivery business has the potential to blossom into a successful venture if you plan and execute accordingly. Weigh all of your options and make a well-informed decision for the future of your restaurant.