3 Big Questions on Third-Party Delivery Answered

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3 Big Questions on Third-Party Delivery Answered

04/23/2019
DoorDash is among the growing number of third-party delivery services. It increased its market share from 3 to 29% after capitalizing on innovative partnerships and a new subscription service.

Service Management Group (SMG), a brand research partner, has published a new report about the evolution of third-party delivery: Sharpen Your Strategy to Win at Third-Party Delivery.  SMG has closely monitored the trend and the impact third-party delivery is having across the restaurant industry.

Using SurveyMini—SMG's location-based consumer research app — SMG launched the longitudinal study in late 2017 and collected consumer feedback at the onset of the study and again in early 2019. With data from more than 20,000 respondents, SMG answered three big questions about the evolution of third-party delivery:

What's the state of the third-party delivery?

Since 2017, third-party delivery awareness, usage and frequency have increased across the board. Awareness has seen the largest increase—at 15%—but the biggest surprise in this study is the 27% increase in fast food delivery, which is growing 3–5 times faster than the fast casual and casual dining segments. With customers willing to pay more for convenience, fast casual and casual dining brands will need to be creative to remain competitive.

Who's using third-party delivery and why?

As expected, millennials had the highest trial and usage rates, but the data also revealed third-party delivery customers are willing to try multiple convenient food ordering options, and they do it a lot more often than customers who don't use third-party delivery. What hasn't changed is the motivator. Convenience remains the top driver for third-party delivery customers, with users citing inability to travel, preferring not to cook and ease of ordering as the top reasons for using delivery services.

Which providers are winning and losing?

In 2017, the data showed UberEats was the preferred third-party delivery provider, but DoorDash has quickly made up ground in the past year. Though UberEats remains at the top with 31% of market share—down from 45% in 2017—DoorDash has increased its market share from 3 to 29% after capitalizing on innovative partnerships and a new subscription service.

To learn more about the evolution of third-party delivery and its impact on the restaurant industry, download the report from the SMG Resource Center.

Service Management Group (SMG), a global customer experience management, employee experience and brand research partner to more than 500 brands.