The past few years have seen food delivery apps, such as Deliveroo and UberEATS, explode into popular consciousness and seeing at least one if not of more of these apps on someone’s phone is now commonplace. Food delivery has increased dramatically in popularity, aided by these easy to use apps catering for food-obsessed millennials no longer satisfied with the limited curry, Chinese or pizza options of years gone by. The range of food that delivery apps provide is certainly one of the reasons for this rise in popularity but also the convenience of ordering food on the move. However, the question is what are they doing to the restaurant industry? In this blog, we will be looking at the advantages and disadvantages of food delivery apps restaurants need to consider.
Advantages of Delivery Apps
The advantages of food delivery apps for consumers are clear, however, there are also benefits for restaurants.
- Improved Reach
This is a particular boon for smaller restaurants, as when using a food delivery app your potential customers don’t have to hear of you before they order. This is because with an app it is more common for people to just search their local area or for a particular cuisine rather than a specific restaurant. This not only bags restaurant orders but potentially loyal customers.
- No Delivery Costs
Whilst there are of course costs involved with food delivery apps (which we will address further on in this blog) by using delivery apps restaurants can avoid the cost of delivery themselves. Whether it’s just saving on petrol and insurance and increasing staff numbers in the restaurant during busy periods or cutting down on staff costs completely this saving can always be put to good use.
- Promotions and Marketing
Food delivery apps are a great way to get any promotions or discounts restaurants have available to a large audience, they also make it easy to organise if the restaurant is less tech-savvy. As a platform restaurant apps also make it easier for a restaurant to compare their promotions and prices to other restaurants in their local area as they are gathered in one place.
Disadvantages of Delivery Apps
Whilst we have highlighted some of the advantages of using food delivery apps, there are some definite disadvantages.
We have highlighted that by using food delivery apps restaurants can save money on delivery services, however, this comes at a cost, namely commission fees. These fees can be as high as 35% and will always be subject to increases. A ‘New Yorker’ article on the subject highlights that the consumer charges for delivery services alone will never be profitable so the profits will always end up coming from the pockets of the restaurants.
- The Decline of Dine in Customers
A Morgan Stanley survey indicated that 43% of food delivery app customers said the meal they ordered was replacing on that they would eat in a restaurant. That’s a lot of people not dining in and restaurants end up losing out on drink and possible dessert orders (not to mention tips).
- Loss of Control
When restaurants hand delivery over to a third party they end up relinquishing a certain amount of control over the condition that order reaches the customer in. Many complaints from consumers and restaurants alike are that the food arrives cold and soggy, due to delayed drivers or lack of care. Depending on what other platforms restaurants use to promote their business, they can also lose control over how they are being portrayed on the apps themselves and therefore their image.
The advantages and disadvantages of food delivery apps are far from clear-cut, an advantage to one restaurant could be a serious disadvantage to another. Subtle alternatives to food delivery apps are available for a restaurant not comfortable with them, Just Eat for example gives the benefits of a mobile platform but allows the restaurant to keep control of delivery services. It’s important that when deciding on whether to use a food delivery app that restaurants look at all aspects and way up the benefits against the costs. However, it must be noted that the popularity of delivery apps is undeniable and by avoiding them many restaurants could fall behind in the race for orders.