Third Party Portals-a blessing or a burden?
With the rise in popularity over the last few years of third party delivery portals like Deliveroo and Foodora, consumer behaviour is certainly changing when it comes to ordering online. Its easy to see the appeal of an app that presents the customer with all available options in one place, guiding them through different types of cuisines and allowing them to see reviews, etc before making a purchase.
But what implication does this have for a restaurant’s operations? It is not uncommon to see some popular establishments with a bank of 3 or more tablets at their front of house, such is their fear of missing out on that incremental business promised by listing themselves on portal marketplaces. This brings with it a host of complications however. As a restaurant’s popularity grows, the requirement for a dedicated staff member to simply ‘monitor the tablets’ increases-this has a negative implication on labour cost. Coupled with the fact that third party portals are expensive to work with (some fees run as high as 30%), listing your restaurant with them quickly becomes a very expensive exercise.
Then there is the question of data ownership. It is crucial for a restaurant to retain ownership over its customer data, in order to follow up with repeat marketing: third party portals traditionally don’t share customer data, meaning that customers who order from them are their customers and not yours. Portals also employ dubious online marketing techniques. They use a restaurant’s branded keywords on search engines to lure potential customers to their platform, effectively denying their partners a sale through their own channel, and doubling, or in some cases, tripling the cost of that transaction to the restaurant.
Third party portals also have a greatly reduced ability to communicate accurate promise times to customers on the restaurant’s behalf-frustrated bike riders often clog up the front of house waiting on orders that are not ready for them due to the restaurant experiencing higher than normal volume during busy periods. Time is money for delivery drivers and they do not like being made to wait for orders.
The dilemma is clear; for a small operator there is a strong argument to list their menus on as many third party portals as possible due to the exposure that it affords, however once all the associated costs, both operationally and through expensive charges are calculated, a strong case remains for restaurants to regain control over their own online presence and make efforts to drive traffic through their own branded website.
Aside from data ownership and reduced costs, there are several other benefits. Restaurants using their own white labeled online ordering solutions are not only paying less to capture each order, but in many cases they also have the opportunity to integrate these platforms with their point of sale systems-meaning a far easier experience for their front of house staff, and an effective reduction in labour cost over time. With an integrated system, customers then become responsible for any errors that are made in the ordering process, due to the fact that there is no transcription involved from either a tablet or a printed ticket to the point of sale.
Lastly, a fully integrated solution allows restaurants real-time control over their menu content and pricing. Any change to a menu, whether it is an entire revamp or a small price change will need to be communicated to the portals, and then followed up on to ensure that all changes have been recorded accurately. This again has an effect on a restaurant’s ability to move quickly and means that more time must be spent on the administration of their online presence, which again has a knock on effect on labour cost. Too often, there are communication problems between restaurant management and third party providers, which culminates in a poor customer experience when they are presented with inaccurate pricing on their bill after placing their order on a portal.
Given the high costs of operating on third party portals, the availability of better technology, and the tight margins that many QSR/delivery restaurants operate on, there has never been a better time for business owners to consider regaining control of their online operations.