restaurant technology

The pros and cons of delivery apps

By Rachel Debling

The COVID-19 pandemic has thrust most industries into a necessary business model evolution. For the restaurant and foodservice industry, some may label this shift as a “digital revolution.”

It is clear that, in this day and age, simply taking orders by phone is no longer an option for a foodservice business to be sustainable, no matter its size; gone are the days in which a restaurant could count on walk-in, dine-in, and phone-in orders to keep them afloat. And though some businesses may have initially rejected third-party delivery apps, due to their high cost, the 2020 pandemic has made them nearly a prerequisite for operations. And it’s truly big business: TechCrunch recently reported that on-demand food delivery is expected to bring in $365 billion by 2030.

However, according to Sean Keith, director of new business development at Eagle Eye, the problem with third-party apps is that they are looking out for number-one – not the individual restaurants who populate their platforms. The data they gather is used to drive customers to similar restaurants and to encourage engagement with the app, helping to line the pockets of the companies who develop these solutions.

To help keep the data where belongs – within the individual restaurants – and to avoid the high fees often charged by third-party apps, Keith suggests looking into another, homegrown solution: launching an ordering platform on your own website. Of course, there are still many benefits to having a presence on Uber Eats, SkipTheDishes, and the like – it’s easy to implement, for instance, and a presence on these apps exposes restaurants to a large, already-engaged audience. Plus, building a custom ordering platform isn’t right for every business; Keith admits size and resources have a lot to do with whether it is an option for an individual company.

For those who don’t have the infrastructure or funds available to create their own platform, third-party apps are certainly there to help and, like it or not, they are a viable and increasingly necessary part of a business’ overall marketing strategy. Building a connection from the business to the customer and from the customer to the business is key, says Keith, and the more ways a restaurant can achieve this, the better.

“What that connection creates ultimately, and what where I think the big gap is, is on the data side,” he explains. “You as an operator have the ability to understand and anticipate and cater to the needs of that specific individual.” So while implementing multiple ways for your clientele to be exposed to and to take advantage of your services may not initially pay off, due to the original investment, the long-term benefits are priceless. As Keith says, you will eventually be able to leverage the “personalized and competitive advantage” that you’ve built on the back of this data.

With third-party apps, much still needs to be done to make them a viable solution for businesses of all sizes. The Ontario government, for example, has been calling for restrictions on delivery fees during the pandemic due to the strain they place on small businesses struggling to stay afloat.  

“From our perspective, where we are seeing the conversation changing, is around the relationship with fees… the understanding of how these services, with fees unchecked, are impacting the margins and livelihoods of these restaurants that I think are increasingly aware of how much of their top line is being impacted by these services,” explains Keith. Still, from what his company has witnessed, he says the legislation seems well planned out and that hiccups like these are simply the nature of the beast. As he notes, “Technology has always moved more quickly than policy.”

Leave a Reply

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