Restaurant Owners: Should You Use a Meal Delivery Service?Learn about the potential downsides before you commit.
Grubhub, Postmates, UberEATS and similar services offer one thing: Delivery to customers from their favorite local restaurants.
In the past, many restaurants skipped delivery because they lacked the capacity (or desire) to hire their own fleet of delivery drivers. These services have changed the equation for some.
If you run a restaurant, you may be considering signing up as a way to boost revenue and expand your customer base. But the truth is, the services may end up being more of a headache than a solution, according to Clark Wolf of Clark Wolf Company, a food, restaurant and hospitality consulting business in New York City and Northern California. Wolf talks with his clients about the positives and negatives before helping them make a decision.
“Deciding whether or not to use these services is part of the conversation I have with every single restaurateur right now,” he said. “It’s a period of real development and it’s very much in flux. The most important person in this is the customer.”
Thinking about it? Keep the following considerations in mind.
Can you handle it?
Wolf recalled dining at a farm-to-table restaurant with a friend. His friend’s food came, and 10 minutes passed. He asked the waiter where his food was. “The waiter said, ‘I’m so sorry, but the last of what you asked for was ordered online and went out.’” Wolf said he would never go back.
Make sure delivery won’t detract from your in-house customer service. “If delivery is a distraction, it’s bad,” said Wolf.
Can you create a separate delivery menu?
Some of your dishes may not be suited for delivery. Wolf recommended creating a separate delivery menu and not putting anything on it that doesn’t travel well. If a dish can be heated up, he advised including basic heating instructions.
If your restaurant’s food doesn’t travel well, delivery probably isn’t for you. “Fast casual restaurants can have their food delivered,” said Wolf.
“Others can’t. If you try to compete where you don’t belong, you will piss off your customers and it will be bad for business.”
Are other restaurants around you using them?
Before signing up with a service, Wolf recommended doing some old-fashioned guerilla research to figure out what services other restaurants in your area are using. “Ask 10 restaurants in your neighborhood and see who they recommend.”
Are you willing to give up marketing dollars?
Basically, meal delivery services market your business. According to Wolf, restaurant owners have to take marketing dollars from somewhere else to dedicate to these services because they take a fee — 12 to 24 percent of sales, according to Eater.
In Wolf’s experience, the better the restaurant does, the more the fees increase. “You’re then stuck with the services because you have a track record with them,” he said. “But they aren’t good business partners.”
A good business partner, he said, would make a deal and do any negotiating upfront. But that’s often not what happens. “A lot of these companies make it up as they go along. They’re backed by venture capitalists that want more and more. It’s not sustainable.”
Can you take the blame?
With these services, you may gain customers, but it’s also possible you’ll upset them. Be prepared to deal with complaints and figure out solutions so you don’t lose your clientele.
“People will complain that the food is oversaturated or cold,” said Wolf.
“People won’t say that [the delivery service] took too long to deliver my meal. They will say, ‘That Thai restaurant took forever.’ That’s the problem. People don’t hold the delivery service responsible.” -Clark Wolf
Nowadays, consumers have no shortage of food delivery service options. They’re ordering groceries from Google or Amazon and meal kits from companies like Blue Apron and HelloFresh. Do your customers really want delivery service from your restaurant?
Do some research to find out. After all, your customers are the people you need to please. Said Wolf, “Find out what your customers, either the people you’re serving or want to be serving, prefer.”