How Should Your Restaurant Offer Delivery – In-House or Third Party?

Experts predict that the online food delivery market will reach $24 billion by 2023 and that it will make up 40% of total restaurant sales by 2020. As your guests increasingly demand the convenience of delivery, it is imperative to decide how to offer delivery in your restaurant. There are two options to choose from – you could partner with one of the leading third-party delivery services or tackle delivery on your own with an in-house fleet. Depending on the size and scale of your operations, either choice could be the right one to allow your brand to compete in a shifting industry.

There are several reasons why you would choose to use a leading aggregate delivery service like GrubHub, DoorDash, UberEats, or Postmates:

• Exposure: For small brands, being listed alongside industry leaders makes their cuisine more visible to prospective delivery customers who have never heard of their restaurant before. For large brands, it also creates awareness about the availability of delivery service. Getting the food they crave without having to change out of their pajamas will thrill your guests and strengthen their relationship with your brand.
• Convenience: Not only is it convenient for guests, but it’s also convenient for the restaurant operators using these third parties. Partnering with brands that are the best in their field lets you focus on what you do well without stretching your team too thin.
• Expense: Launching an in-house fleet won’t come cheaply if you have many locations for which to provide vehicles and delivery drivers. Employees could be designated for a delivery role, but that can be a drain on resources during times when orders aren’t coming in.

On the other hand, there are also reasons to keep delivery in-house as part of overseeing the entire guest journey from start to finish:

• Guest Experience: When guests order delivery and something goes wrong, 44% blame the restaurant – as compared to the 25% who blame the delivery company. Once it leaves your restaurant doors, the food also leaves your control. Making sure branded cars and uniformed employees deliver meals to customers is a priority for some brands that want to leave a positive impression.
• Control of Data: Your customer ordering data is one of your most valuable assets. When using third-party delivery, you are prevented from making important connections between how guests behave when ordering delivery versus when visiting your brick-and-mortar locations because their data sits with the third parties and doesn’t link back to your loyalty programs.
• Margins and Commission Fees: Profit margins in the industry are already slim, so giving a percentage of each order as commission to a delivery company might be unpopular among managers and franchisees. While there’s a larger upfront expense to finance an in-house fleet, keeping more of each purchase may prove advantageous in the long run.

What does the future hold for restaurant delivery? It’s clear that diners want to be able to enjoy their favorite cuisine at home in the most convenient manner possible. To learn more about these two delivery options, check out a webinar on this topic, “Delivery Wars: Third Party vs. In-House.”