As delivery surges during the pandemic, consumers continue to show a preference for placing their orders directly with restaurants, skirting third-party delivery providers and their fees.
In fact, consumers say ordering from third-party providers is their least-preferred off-premise ordering method, according to new research—even as third-party delivery companies have reported huge gains during the pandemic.
That dynamic has created a major opportunity for restaurants to promote their own channels and capture some of the many consumers who are ordering delivery regularly for the first time.
In July, 16% of consumers said ordering delivery from a third-party provider was their preferred method, according to consulting firm AlixPartners. That’s compared to 21% who said they preferred ordering delivery directly from the restaurant online, and 20% who favored ordering directly from the restaurant by calling.
Reasons for this preference appear largely related to the fees charged by third-party providers to both customers and restaurants, which can be as high as 30% per order. And those preferences have seemingly been amplified by the pandemic.
“Given all of the conversation that's been happening around the fees that third-party delivery companies are charging restaurants and the dramatic economic impact of COVID-19 on restaurants in particular, consumers are very sensitive to sharing more of the revenue with the restaurant itself,” said Eli Portnoy, CEO of consumer research firm Sense360, during the Food on Demand conference earlier this month.
Sense360 found that 63% of consumers prefer to order delivery directly from the restaurant, versus 18% who prefer third parties.
But what consumers say does not always align with what they do. Third-party delivery companies such as Grubhub and Uber Eats have seen huge increases in sales and users during the pandemic. Lots of consumers are using the services, even if they say they’d prefer not to.
“What consumers are telling us is that when all else is equal, they'd prefer to interact directly with the restaurant ... but not all else is equal,” Portnoy said. “Not every restaurant is spending as much on customer acquisition as DoorDash and GrubHub and Uber Eats, so [consumers] may just not have it on their phone or not be aware of it.”
Therein lies a big opportunity for restaurants.
“If your consumer comes specifically looking for your food delivered, you should have a mechanism to service that consumer,” said Marty Hahnfeld, chief customer officer of online food ordering platform Olo, during the Food on Demand conference.
That might mean investing in self-delivery, which some restaurants, such as Portillo’s, have done recently. But it also means simply getting consumers to order directly from a restaurant’s website or app versus a third party’s. And fortunately for restaurants, the pandemic has ushered in a new and impressionable wave of digital consumers.
To illustrate that, Hahnfeld cited a statistic that the number of food orders placed via Google is 15 times what it was pre-pandemic.
“The reason for that, we believe, is that these are first-time digital consumers that don’t have experience ordering from that brand, nor do they have a lot of preference to order from a third-party first. ... They’re seeing an ‘Order now’ button and they’re hitting it,” he said. “So this is about capturing the consumer at the right moment and fulfilling the service model that they’re looking for.”
For restaurants, that means the time is now to push their own channels in front of potential customers.
"If I'm a restaurant, I need to invest in my first-party experience, I need to promote my first-party experience, and I need to give consumers what they want,” Portnoy said. “Because ultimately, right now, they're being disintermediated by those third parties.”