Are consumers aware of the impact of third-party delivery platforms on restaurants? And how are they motivated to support their favorite restaurants throughout this time? SevenRooms, a data-driven guest experience platform for the hospitality industry, divulges the results of its research in its “Data & Dollars: Revealing the Impact of Third-Party Marketplaces” report.
As restaurants lean into off-premises for the foreseeable future, many are looking at ways to boost the bottom line. At Restaurant Next, three executives shared their insights on how to best navigate the complex world of delivery. Matt Friedman, CEO and founder, Wing Zone, which offers in-house delivery and third-party delivery at its 70 restaurants, shared his best practices for standing up a native delivery program.
According to the SevenRooms' report, 16% of Americans surveyed believe that third-party platforms do more harm than good for restaurants. As consumers have become more aware of the obstacles restaurants face in their day-to-day operations, going direct creates opportunities and benefits for operators to align with the changed diner expectations uncovered in this report. The study was commissioned through independent third-party research firm YouGov, with additional data from various resources relating to the average cost of rent, PPE, hourly pay, third-party commission rates and more.
THE REAL COSTS OF THIRD PARTIES
SevenRooms compared the amount of money that could be saved by shifting a percentage of online orders to a direct ordering solution to offset the real costs associated with operating a restaurant, revealing the following:
For example if a restaurant fulfills an estimated 1,500 combined delivery and take-out orders at an average cost of $144 per order over a six-month period, with 75% of their business as delivery (at 30% commission) and 25% of their business as pickup (at 10% commission), a direct ordering solution would save the restaurant approximately $54,000 over the course of that six-month period.
Support for Restaurants
As the COVID-19 pandemic continues, state and city governments are taking aim at third-party delivery fees. Consumers are seeing the downsides of third-party platforms. Of Americans who say they’re motivated to order directly from a restaurant instead of a third-party delivery platform, nearly 3 in 10 (28%) say it’s because they’ve seen their favorite restaurants struggle and want to help out others as much as possible. While 30 percent say it’s because they know that third-party delivery platforms charge too much in fees from restaurants.
Four in 10 Americans (37%) say they want to do all they can to directly support restaurants, they know more is needed. Nearly half of Americans (47%) want to see increased and/or additional aid for restaurants from the federal government, while 43 percent want to see increased and/or additional aid from local and state governments.
PERSONALIZATION PROMOTES LOYALTY
This past year has shown us that the restaurant industry is incredibly resilient. Restaurants across the country have adapted, creating offerings and incentives including to-go cocktails, in-home experiences, and tailored customer promotions that have increased customer loyalty tenfold. So much so that, of Americans planning to order from a restaurant for delivery or takeout, more than 1 in 3 (36%) say they would be incentivized to order directly versus from a third-party delivery platform if they were offered a personalized promotion for their meal (i.e., discount code, complimentary drink or appetizer).
Other top incentives include:
- A restaurant’s own app for ordering, tracking, communications, etc. – 41%
- A personalized promotion for a subsequent delivery order or visit – 32%
- A menu and experience that was personalized for them based on previous orders – 17%
The full report is available at sevenrooms.com.
SevenRooms commissioned YouGov PLC – a third-party, professional research and consulting organization – to poll the views of 1,229 individuals who agreed to take part. Fieldwork was undertaken online between January 28 – 29, 2021. The figures have been weighted and are representative of all US adults (aged 18+).