Third-Party Ordering Service vs. Internal Online Ordering

Consider the pros and cons of using a third-party online ordering service vs. implementing an internal online ordering solution.

Online ordering

The statistics are staggering. According to an infographic from GloriaFood, online ordering and delivery have grown 300 percent faster than dine-in traffic from 2014 to 2016. Moreover, 86 percent of consumers are using delivery services at least once per month, and 26 percent of consumers order food for takeout or delivery once per week. McKinsey & Company reports that online penetration of the total food delivery market passed the 30 percent mark in 2016 and predicts it will reach 65 percent as the market matures.

Those numbers indicate that online ordering is no longer an option. What is up in the air, however, is how restaurants take orders online. Restaurants can enable online ordering from their own websites or apps — or they can use third-party services such as aggregators, which allow consumers to log in and access multiple restaurants through their online portals, and third-party delivery services.

The Debate

There’s an ongoing debate about the pros and cons of these options, and the conclusion you and your clients draw will depend on each restaurant’s circumstances. Consider these four points of contention:

Cost

Both online ordering options have some cost associated with them.

      • Restaurants often pay a monthly fee to use online ordering solutions and for premium features.
      • Online aggregators or delivery services assess fees for their services. CNN Business reports that restaurants pay from 15 percent to 30 percent for each order placed through third-party platforms.

Steve Krug, Owner, President; iMenu360, adds that restaurants also need to consider future orders. He says driving customers to their own websites instead of to an online aggregator or delivery portal can save restaurants approximately 12 to 23 percent each time a return customer orders.

Reach

There’s also the “if a tree falls in a forest” argument: For smaller restaurants or new restaurants with limited brand recognition, a website that’s online ordering-enabled may not get enough traffic to build an online customer base. And for casual or fine dining restaurants that don’t offer delivery on their own, third-party delivery services may help them build a new revenue stream.

The fees to well-known third-party ordering and delivery sites like GrubHub, DoorDash, Uber Eats, and Postmates may be worth it to have a wider reach and expand a restaurant’s customer base.

Data

Another major difference between using a third-party ordering platform vs. an online ordering solution integrated with the restaurant’s own network is access to and ownership of data. As new regulations are put in place regarding what online services can do with data, it’s not certain if restaurants will be able to access and analyze data on their customers using third-party platforms. Restaurants with their own systems will be able to collect their own data, which may result in great value for marketing, operational efficiency, and profitability in the long run.

Customer Satisfaction

A huge factor in the decision of whether to use a third-party online ordering or delivery service or an in-house system is customer satisfaction. When using a third-party service, restaurants lose control of the overall customer experience — at least a part depends on the service customers receive through the third-party portal and delivery service. A recent Technomic study found that 76 percent of consumers hold the restaurant at least partially responsible for errors that may occur, which could put the restaurant’s reputation at risk.

Restaurant Business News reports 74 percent of delivery customers say they would prefer to order directly from a restaurant as opposed to ordering through a third party.

Decide Case-by-Case

Experienced restaurant solution providers know that not every solution is the right fit for every client. Online ordering is no exception. As always, understand your client’s needs and goals and provide them with the solution that’s the perfect fit.