Insights
Client Success Manager, Jason Horn, on the impact of food delivery apps on the restaurant industry.
From Deliveroo to Uber Eats, if you live in a big city you’ll have noticed a brightly coloured swarm of a new kind of traffic join our streets recently – food delivery riders. For restaurant owners, each cyclist is another visual representation of the tough competition the industry is up against – and of the considerable commission demanded by the delivery companies.
The trend for digitally-driven dining sales is not set to go away any time soon. App downloads are soaring and the battle for consumer attention is far from waning. But it remains a battle. When the market gets tough, the tough innovate.
While some brick-and-mortar eateries may be struggling, others are embracing the opportunity and flourishing. So what’s driving this change and how can restaurant owners reap the benefits?
As with many sharing economy initiatives, such as Uber, this is to some extent a pricing rebellion on the part of the diner. Consumers want better offers but the same quality all in the comfort and convenience of their own home.
This change brings about a whole new set of concerns for a brand. Can I rely on a delivery app company to care about my brand and deliver the same level of service I’d expect from my own team? Will the consumer think differently of my brand after using a delivery app? How much care and attention will delivery companies put into ensuring food is delivered as expected and that diners continue to order from my restaurant?
We recently conducted our own 2018 survey on delivery apps and the restaurant industry using HGEM’s vast diner feedback database. The results were more surprising than you might think. In fact, we’ve determined that, rather than threatening a take-over, delivery apps are unwittingly giving restaurant owners the upper hand.
Guests are more savvy about the industry than we give them credit for. If something goes wrong with an order, we imagine them disillusioned with the restaurant. In reality, 58% believe if food arrives late, it is “the responsibility of both delivery app company and restaurant” and restaurants are only blamed for a “rushed, impersonal or indifferent interaction” with the delivery person 15% of the time.
It’s not just the big brands that win, either – 74.8% prefer to support local, independent restaurants when ordering via an app. The app becomes an advertising and delivery middle-man between the consumer and the smaller establishment, familiarising diners who wouldn’t previously have eaten in with the brand: a win-win situation.
Plus, our feedback proves that consumers still recognise quality when they taste it. 70% felt food was well-presented and served at a good temperature on arrival, leaving a third of customers dissatisfied, and many respondents were keen to highlight that their takeaway meal was “never as good as dining in”. There is no doubt that many restaurants will be reticent to embrace delivery app companies on this basis alone.
If more restaurants had the resources to deliver directly, our research shows that 48% who currently use delivery apps would prefer to order online directly from the restaurant itself. Could it be time for restaurants to invest in their own delivery infrastructure?
