Over the last decade, online food delivery services have sprung up to capture a significant portion of the restaurant market. While online platforms promising customers fast delivery, a smorgasbord of choice, and the convenience of browsing at home are currently thriving, there’s a downside to the dominance these companies now have on the restaurant trade.
As a result of the proliferation of third-party food delivery and ordering portals, many restaurants, particularly independents, now feel pressured to pay the high fees and commission required to get on board, or else risk being left behind.
These platforms are not only making independent brands feel the pressure. Nearly every major restaurant or fast food chain is also signing up out of fear of missing out on a piece of the pie. Because of this, the most prominent delivery platforms can now take a significant commission on each order, and do, with the biggest UK platform recently increasing their sign-up fees to squeeze the brands that list with them even harder.
When an outside company deals with the booking or delivery, guests are less likely to engage with the restaurant itself which can subsequently fracture brand loyalty and identity. If the restaurant isn’t open or can’t cope with deliveries on that day because of a huge influx in customers, there is no way to shut down operations, if delivery and bookings are outsourced. And when restaurants make menu changes, which they often do, these cannot always be swiftly updated on the listing platforms, causing businesses to lose money.
Yet in an increasingly online world, where customers expect a variety of food at their fingertips and demand expedient service, it’s no wonder the delivery brands are expanding. Now the UK’s biggest platform is formulating its own marketplace model, where it aims to charge restaurants who do not require its delivery services exorbitant fees just for a listing.
Capitalising on market dominance
Not everyone believes this is the best way forward for customers, or indeed for restaurants themselves.
Michelle Gauthier, the founder of the US fine-casual chain Mulberry & Vine, claims delivery platforms are the reason her profit margin has shrunk by a third over the past three years.
“We know for a fact that as delivery increases, our profitability decreases,” she told the New Yorker in February 2018. According to Gauthier, for every order sent out by Mulberry & Vine through third-party delivery services, between 20 and 40 per cent of the profit went to the platforms and their couriers.
Yet customers still crave the personal touch. The Toast 2019 Restaurant Success Report discovered more customers still order from a restaurant’s website than a third-party ordering site, while a 2016 Mintel report found the major motivator behind 31% of customer’s trying out third-party ordering sites was fast delivery. Fast delivery is one factor that can be easily achieved by the restaurant itself, by investing in its own delivery riders.
So, what’s the alternative?
Relying on word-of-mouth, local advertising, or newspaper promotions, is near pointless for many restaurants these days, where every customer must be fought over and technology becomes a significant part of everything we do. The food delivery service must adapt in order to move with the times and sustain long-term growth, but that doesn’t mean there isn’t a more ethical way to do business.
A bespoke approach that offers food brands more
A more personalised model that conserves the ethos of every restaurant has several advantages to offer, over a profit-first platform that’s driven by commission, not passion for food.
On the Zampoita platform for example, restaurants handle their own bookings and delivery, and pay affordable monthly rates to have their business prominently featured and promoted to a growing community of food lovers. The site even offers free listings for companies that don’t yet have the budget but would still like a presence on the portal.
What’s more, Zampoita’s zero customer reviews approach also enables food brands to avoid the pitfalls that major sites like Trip Advisor often cause restaurants. A 2019 BBC Report discovered fake customers had been posting poor reviews about a pub restaurant listed on the site between 2014-2016, even though the business had been closed since 2011. Other businesses including a chain of Brazilian restaurants were also found to have been targeted by fraudulent reviews.
The review-free approach taken by Zampoita is just one advantage offered to the brands that list with it. Specialist platforms like this offer restaurants more space, control and personalised promotion, and are guaranteed to attract the right kind of customers— food lovers who care about where they eat, and who will return.
Not only this, but by allowing restaurants to decide whether they want to offer delivery services or not, customisable platforms like this put food brands firmly back in control. Instead of feeling the pressure to adopt an expensive delivery model or pay a third-party company to handle their deliveries for them, they’re free to showcase the uniqueness of what they have to offer customers instead. Whether that’s original Italian cuisine, the most delicious pizza in town, epicurean burgers, or fast fusion, they don’t lose out to brands that deliver, as customers on the site search for a specific dining experience rather than a quick to-the-door order.
If food brands do offer delivery, they can promote this to customer’s seeking it, through Zampoita’s highly customisable listing pages, which allow customers to choose whether they want to eat out, eat in and collect, or get a delivery.
With no extortionate commissions, or high monthly rates, restaurants and cafes retain a much larger slice of profit on every customer who visits, as a result of seeing them showcased on the portal.
By opting for a platform likes Zampoita, instead of the major delivery sites, brands are more likely to see a packed restaurant, instead of slowly seeing customers fall away and opt to stay in instead.
Flexible model of business that conserves the dining experience
Portals that encourage the dining experience combat one of the most serious problems the growth of the major delivery brands has caused – a decrease in in-house customers. By conserving the food trade on the high street and offering the option to boost the profile of brands that want to offer delivery, the Zampoita model is better placed to grow and adapt in the long-term future.
Sustainable business models do exactly that, sustain the business they are based on. While the big brands currently make bucks off the back of restaurants who’ve built their brand up the hard way, by killing off the lifeblood of restaurant’s business, the in-house diner, they will eventually cannibalise the market. In fact, decreasing in-house custom, increasing demand for eat-in orders, subsuming restaurant traffic, and commanding an ever-higher fee for access to it, appears to be the intention of the major delivery sites as they set out their plans for growth.
By acting as gatekeepers to customers, instead of encouraging restaurants to attract and retain their own traffic, these sites ensure their own future market dominance at the expense of restaurants, cafes, and other food outlets.
Eventually, no-one but the biggest chains will be able to stand on their own and compete, and even they are now starting to capitulate. From KFC to Burger King, the current rush to get listed on the major delivery sites is even encompassing brands such as Domino’s Pizza, who’ve long had their own delivery drivers.
The power the delivery platforms now possess is now being wielded effectively to force more food brands into their corner, yet it’s not too late for an alternative future model for the restaurant trade, one that better sustains and drives growth.
By choosing to list with growing platforms aimed at food lovers, that seek to preserve the restaurant trade itself, businesses can strike back, and enjoy higher profits, more in-house footfall, and a closer relationship with their customers.