A Guide to Online Food Delivery Marketplaces for Restaurants

Back of House Staff | July 23, 2021, 11:19 AM CDT

A Guide to Online Food Delivery Marketplaces for Restaurants

Perhaps no consumer-facing technology has changed US restaurant operations and culture more in recent years than the rise of ordering and delivery marketplaces. Third-party delivery services, often dubbed simply delivery apps for their main method of access, are platforms that connect restaurant operations to a consumer in a digital space: online, via mobile internet, or even as kiosks in physical spaces. Yes, consumers still order take-out and delivery by phone, or occasionally by logging into a favorite restaurant’s website. But for the millions of consumers who browse for meals on delivery apps, their phones take on the character of a mall food court, allowing them to choose from an array of options based on customer ratings, price, cuisine, physical proximity, expected delivery time, and — on a repeat visit — habits and past orders.

The Covid-19 pandemic highlighted growth trends already well underway: the US restaurant delivery market tripled between 2015 and 2020, to a $26 billion sector, underscoring the potential for reaching a huge and still-increasing audience via these marketplaces.

What are the benefits of using order and delivery marketplaces?

  • Reach: More than 110 million Americans now have delivery apps on their phones, a gigantic market of hungry people shopping with their thumbs. In a crowded marketplace, the major players have spent heavily on advertising as they jostle for their own market share.
  • Volume: The margins are often the tricky part, as restaurateurs say fees can gobble up the profits they might otherwise earn on a delivery. But the ease of the transactions ensures a lot of people will be walking through your door virtually.
  • Turnkey operations: Joining one of these platforms gets you online fast. If a customer has a problem, they reach out to the platform’s customer service folks. The platform handles the delivery drivers as well, leaving you to focus on the cooking.
  • Data collection: The digital footprint a customer leaves as they order on their phone is huge relative to a customer who walks in and pays cash. You can partner with the order / delivery platform to gain more insights from the data and power your wider marketing efforts.

Who uses order and delivery marketplaces?

The biggest clients for these apps are brick-and-mortar restaurants that use a tech platform to live online. But the past few years have seen some new, diverse players using this marketplace. The pandemic saw the rise of to-go alcohol sales, and many states have loosened their alcohol regulations permanently, allowing bars to deliver or take carry-out orders for drinks on the apps. Digital delivery platforms have allowed ghost kitchens to become an entire new category of restaurant — one that keeps overhead low by maintaining no physical dining area, making deliveries from an often-anonymous prep space that nonetheless uses flashy branding on people’s phones. And other restaurants have begun using these platforms to ship meals to customers hundreds or thousands of miles away, meeting demand with specialty food delivery services.

Why use an order / delivery marketplace solution?

A good one tends to raise a restaurant’s profile in a hurry. Most restaurants report an increase in orders when they appear on delivery apps, and a good fraction of customers say they’re more likely to place larger orders through apps than they would in the restaurant (perhaps treating the delivery as a way to bank leftovers as well). For restaurants that want to make delivery a part of their business, partnering with a delivery app plugs them immediately into an existing delivery network, meaning there’s no need to hire or train a delivery driver. And of course if you’re running a ghost kitchen, they’re a backbone of your very model. They offer you a simple, effective way to feed customers who may have no idea, when the food arrives at their door, that you don’t have so much as a dining room at your physical location.

[Photo by MART PRODUCTION from Pexels]

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