The restaurant industry is experiencing a significant transformation due to the rise of on-demand delivery services. Multi-restaurant ordering platforms have revolutionized how customers interact with restaurants, offering unprecedented convenience and choice. These platforms impact how restaurants operate, market themselves, and reach their customers, creating new opportunities and challenges for businesses in the food service sector.
As technology continues to shape consumer behavior, multi-restaurant ordering platforms are becoming increasingly essential for restaurants to remain competitive. These platforms allow customers to browse menus, place orders, and arrange deliveries from various restaurants through a single interface. For restaurants, joining these platforms can increase visibility, expand customer bases, and streamline operations. However, it presents new considerations regarding commission fees, customer data management, and brand identity in a crowded digital marketplace.
The Rise of Online Multi-Restaurant Ordering Platforms
The food delivery market has experienced significant growth in recent years, driven by the increasing demand for convenient dining options. Multi-restaurant ordering platforms have revolutionized customer interaction with restaurants, offering a wide range of choices through a single interface.
Key players in the market
Several significant players compete for dominance in the United States market in online food delivery. As of March 2024, DoorDash and its subsidiary Caviar led the market with 67% of observed U.S. consumers’ meal delivery sales. Uber Eats secured the second position with 23% of observed sales, while its acquisition of Postmates brought its total market share to 25%. Grubhub and its subsidiaries, including Seamless, Eat24, and Tapingo, accounted for 8% of observed U.S. meal delivery consumer spending. These platforms make it easy for people to get food from their favorite restaurants without leaving home, and they continue to grow as more customers embrace the convenience of online ordering.
Growth trends and projections
The online food delivery industry has grown remarkably, particularly during the COVID-19 pandemic. For example, in April 2020, people ordered 162% more meals online compared to the same month in the previous year. Even compared to the month before, there was a 59% increase. Although the growth has slowed since then, the industry is still growing. In March 2024, sales for online meal delivery went up by 8% compared to the previous year.
Experts at Business Insider Intelligence predict that online food delivery apps will become a $38 billion industry starting in 2020 and continuing to grow. This means restaurants must change how they operate and market themselves, creating new opportunities and challenges in the food service industry. For example, more restaurants might need to focus on their online presence and delivery services to meet the demand.
Consumer adoption rates
Online multi-restaurant ordering platforms have become popular because they make it easy for people to order food. These platforms let customers browse menus, place orders, and arrange deliveries from different restaurants using just one app or website. For example, you can use a single app to order a pizza from one restaurant and a dessert from another. This convenience has dramatically increased the use of these services in the United States.
Many platforms have introduced subscription services to keep customers coming back. For instance, with DoorDash’s DashPass, customers pay a monthly fee for benefits like free delivery. In March 2023, 69% of people who signed up for DashPass subscribed after one month. After six months, 36% were still subscribed, and after a year, 28% kept their subscriptions. These subscription models and partnerships with well-known restaurants have helped these platforms grow even more.
How These Platforms Work
Multi-restaurant ordering platforms function as digital intermediaries between customers and various restaurants, making it easy to order food through one website or app. They gather information from many restaurants, handle all the orders, and coordinate everything to ensure a smooth process for customers and restaurants.
For example, imagine you want to order a burger from one place and sushi from another. Instead of calling each restaurant separately, you can use an app that shows you menus from both locations. You place your orders through the app, which then sends the orders to the restaurants and coordinates the deliveries. This way, you get your food without hassle, and the restaurants receive and manage your orders efficiently.
The technology behind the platforms
The core of these platforms is advanced software that connects all the different parts to work together smoothly.
One important feature is a user-friendly design that lets customers easily browse different restaurants, check out their menus, read reviews, and make informed choices. For example, you can use the app to see what’s available at various restaurants, read other people’s opinions, and decide what to order.
The platform also has a simple cart system, which allows you to add items from different restaurants. This system makes paying for everything accessible and secure.
Multi-restaurant ordering platforms often incorporate restaurant menu management systems that simultaneously allow real-time updates and modifications across numerous establishments. These systems enable restaurants to update their menus in real-time. The change is instantly visible to customers if a restaurant runs out of a dish or adds something new. For example, if a restaurant adds a new special dish, the app will show this item immediately, so you always see the latest menu options.
- Order processing and fulfillment
When a customer places an order, the system processes it efficiently, sending instant notifications to the respective restaurant. For example, if you order a pizza, the restaurant gets an immediate alert about your order. The restaurant staff can then acknowledge the order directly through their point-of-sale (POS) system, which is integrated with the platform. This means they don’t have to manually enter your order, reducing mistakes and saving time. For restaurants, the platform provides tools to monitor incoming orders in real time, update order statuses, and manage delivery assignments. For instance, they can see when a new order comes in, update the order status (like “being prepared” or “out for delivery”), and manage who will deliver the food. This helps the restaurant run smoothly and get your food to you more efficiently.
- Delivery logistics
Delivery logistics are a crucial component of these platforms. Many systems offer route optimization software to decrease unnecessary mileage and increase the throughput of delivery transactions. Real-time tracking features allow customers to monitor their orders from preparation to delivery, enhancing the service experience.
For restaurants that manage their delivery fleet, the platform often provides a separate app for drivers. This app allows drivers to accept and manage orders, with automated dispatch and intelligent delivery systems ensuring efficient routes and accurate delivery times.
By incorporating multi-restaurant delivery service software and multi-restaurant ordering platforms, these systems create a comprehensive ecosystem that benefits customers, restaurants, and delivery personnel. The result is a streamlined process that enhances efficiency, expands customer reach, and ultimately transforms the restaurant industry.
Benefits for Restaurants
- Expanded customer reach
Multi-restaurant ordering platforms have revolutionized the way restaurants connect with their customers. These platforms act like online marketplaces, helping restaurants connect with more people and attract new customers.
For example, a small local restaurant that joins one of these platforms can now be seen by people all over the city, not just those in the immediate neighborhood. This increased visibility helps the restaurant grow its customer base beyond its usual local area, bringing in more orders and new patrons.
- Increased order volume
One of the most significant advantages of online restaurant ordering systems is the potential for increased revenue. Restaurants with an online ordering system can raise their takeout profits by 30% compared to those without such systems. This increase in order volume is partly due to convenience, as customers who place online orders tend to visit the restaurant 67% more frequently than those who don’t.
Moreover, according to Deloitte, customer spending increases by 20% when ordering via technology. The research found that online ordering grew check averages for quick-service restaurants by 26% and fast-casual restaurants by 13% . This boost in order value contributes significantly to a restaurant’s bottom line.
- Operational efficiencies
Online ordering systems make restaurant operations more efficient in several ways. Orders are processed quickly and accurately, which reduces mistakes that can happen with phone orders. For example, if you order a meal online, the system ensures that the restaurant gets your order exactly as you entered it. This accuracy allows the staff to focus on other essential tasks.
By using restaurant food delivery software and multi-restaurant ordering platforms, restaurants create a smooth operation that runs well together. These systems often include tools to manage menus, allowing restaurants to update their offerings in real-time. For example, if a restaurant runs out of a dish or wants to add a new one, the change appears immediately online for customers to see.
Using these systems helps restaurants manage their resources better and improve overall performance. They can handle more orders without significant changes to their setup, making it easier for businesses to grow. For instance, a small restaurant can start taking more online orders without needing to hire more staff or make significant changes to their kitchen.
Challenges and Considerations
- Commission fees and profitability
While multi-restaurant ordering platforms offer numerous benefits, they also present significant challenges for restaurants, particularly profitability. One of the most pressing issues is the high commission fees charged by third-party delivery platforms. These fees typically range from 15% to 30% of each sale, significantly impacting a restaurant’s bottom line. Sometimes, third-party vendors charge up to 35% per order, which can severely cut into profits.
The financial impact of these fees has become a significant concern for restaurant owners. As food orders increase and restaurants continue to rely on third-party providers, they risk forfeiting a substantial portion of their revenue instead of growing their business. This has led many restaurants to explore alternatives, such as developing their online food ordering systems to retain more of their profits.
- Impact on in-house operations
Integrating multi-restaurant ordering platforms can significantly impact a restaurant’s in-house operations. While these platforms can streamline order processing, they also introduce new challenges in managing the increased volume of orders and coordinating with delivery services.
Restaurants may need to adjust their staffing and kitchen operations to handle the influx of online orders efficiently. This can include dedicating staff to manage online orders, reorganizing kitchen layouts, and implementing new systems to prioritize and fulfill orders from various sources.
- Brand control and customer relationships
One essential challenge restaurants face when using multi-restaurant ordering platforms is maintaining control over their brand and customer relationships. On third-party apps, restaurants often become just one option among many, making it difficult to stand out and build customer loyalty. This lack of direct customer interaction can hinder a restaurant’s ability to manage its brand effectively and create lasting relationships with patrons.
Moreover, third-party platforms typically retain customer data, limiting restaurants’ access to valuable information about their client. This data gap can make it challenging for restaurants to personalize their offerings, implement targeted marketing strategies, and build a loyal customer base.
Another concern is the potential impact on a restaurant’s reputation. According to a Techonomic study, 76% of customers blame the restaurant for third-party delivery errors, even when the restaurant has no control over the delivery process. This misattribution of blame can put a restaurant’s reputation at risk and highlights the importance of maintaining direct communication channels with customers.
Conclusion
To wrap up, the rise of multi-restaurant ordering platforms has brought about a significant shift in the restaurant industry. These platforms have expanded customer reach, boosted order volumes, and streamlined operations for many eateries. However, they’ve also introduced challenges related to commission fees, brand control, and customer relationships. The impact of these platforms on restaurants’ profitability and operations is significant and ongoing.
As the industry continues to evolve, restaurants need to weigh the pros and cons of partnering with these platforms carefully. They should explore alternative solutions, such as developing their online ordering systems, to maintain more control over their brand and customer data. For those looking to implement a customized solution, iScripts NetMenus offers a comprehensive multi-restaurant ordering platform that can be tailored to individual business needs. Ultimately, the key to success in this changing landscape lies in finding the right balance between leveraging technology and preserving the unique aspects of the dining experience that customers value.
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