delivery aggregators

Delivery aggregators & the costs of convenience

A new report has shed light on the extended effects of the pandemic on food delivery aggregators and third-party delivery apps.

The inaugural The Digital Divide, Aggregators: The Cost Of Convenience, a collaborative PYMNTS and Paytronix report, examines the spending habits of restaurant customers in the U.S.

It found that many consumers came to rely on delivery aggregators for meal deliveries during the COVID-19 crisis and that helped to many keep restaurants in business with customers at home and indoor dining off the table.

Pros of convenience vs. cons of cost

Convenience is cited as the primary reason for using delivery aggregators by roughly two-thirds of aggregator users. Most of the other top reasons also centre around convenience. 34 per cent believe these platforms are the only way to get delivery from the restaurants of their choice, and 32 per cent say ordering this way is faster.

However, more than half of consumers who do not use them, however, say the costs are a deterrent. Aggregators, of course, typically charge fees and may mark up menu prices, and 53 per cent of respondents who have not placed a restaurant order in the past 15 months through an aggregator say these and other charges and higher prices are key factors in their decision to order through other channels. Approximately one-quarter also say they prefer other methods (26 per cent) and do not trust aggregators (26 per cent).

Those statistics sum up succinctly a large part of the debate that has raged around delivery aggregators throughout the pandemic.

The report found that less than one-fifth (17 per cent) of U.S. consumers who regularly purchase food from restaurants used delivery aggregators to order from their favourite table-service or quick-service restaurant at least once in the last three months. Ordering directly from the restaurant by phone or online remained far more popular: nearly half of respondents had ordered directly through their favourite restaurant’s website, app, or by phone in the same time period.

RELATED: Third-party apps offer self-delivery options for restaurants

One thing that the higher costs of ordering through delivery aggregators caused is increased spending per order, perhaps as an attempt to get the maximum amount of food out of the fees charged for ordering. That gap is especially large for QSRs, with aggregator purchases averaging between 10 per cent and 12 per cent more than those made when eating at the restaurant or ordering directly.

Generational divide

Unsurprisingly, the use of food delivery aggregators varies substantially by generation, with younger consumers much more likely to order using these platforms than older consumers.

Approximately one-quarter of bridge millennials (23 per cent), millennials (27 per cent), and Generation Z (24 per cent) made restaurant purchases via aggregators at least once in the last three months, versus only six per cent of baby boomers and seniors (six per cent). Generation X fell in the middle, at 17 per cent.

RELATED: Takeout’s toll on restaurant workers, packaging

Major players

Delivery has always been a field dominated by a few giants, and so it remains.

The report found DoorDash to be the most popular, with 58 per cent of aggregator users ordering through the platform at least once in the past 15 months. That was followed by Uber Eats (46 per cent), Grubhub (37 per cent), and Postmates (20 per cent), with less than 10 per cent of the market going to other players.

While these platforms’ users tend to repeat-order, due in no small part to the convenience factor smaller players such as Seamless (7.7), ChowNow (7.6), and Caviar (7.8) have higher-frequency users, suggesting they may deliver better experiences to their customers than the industry leaders.

Leave a Reply

Your email address will not be published. Required fields are marked *