An Inconvenient Truth

Now that we have talked about the wonderful world of deliveries and restaurants, let’s tell the truth. Restaurants hate deliveries.

Well, ok, they don’t hate-hate them. Deliveries make them money of course. But the thing is, it’s not the same type of money they can make on people dining in. On each order, they need to give away a big piece of their revenues to some online platform. But not just that. Customers from delivery apps tend to have smaller orders than diners, often skipping starters or the temptation of a dessert. They tend not to order drinks, especially alcoholic drinks as beer, wine and cocktails, on which restaurants make very good margins. Also, they can’t charge service gratuity or get tips for staff. Terrible.

But restaurants can try and fight back, to get people back to the tables. Restaurants can make it easier to go out for a meal, reducing the convenience gap versus deliveries. They can start by making reservation simpler, by leveraging mobile apps. OpenTable is one of the largest. Started in San Francisco in 1998, the service now counts more than 40,000 restaurants. Diners can quickly check availability for a reservation and book, and can get reward points for using the platform regularly. In Europe, Booktable, now part of Michelin, is leader for restaurant reservation. The bad news for restaurants is that these services, well, want their cut as well. They usually have a per order fee and also a technology fee on reservation management software.

Beyond reservations, restaurants could trying and make other parts of the dining process more convenient, to streamline and making the experience almost as quick and simple as ordering from home. McDonald’s is rolling out self-checkout systems. Other restaurants are allowing people to order from tablets at their tables.

Is more convenience really the way for dining in to win customers back? It seems rather impossible to beat deliveries at their convenience game. How could you, when I am able to order a burger in 5 seconds while sitting on my sofa and comfortably waiting for it to come to me ? If anything, this progressive automation and striving for convenience makes restaurants potentially even more vulnerable to deliveries. Playing their same game means stripping away any difference that dining in had versus having a meal delivered and, by doing so, making deliveries even more evident as most convenient and preferable choice.