How to Increase Your Restaurant's Revenue with Delivery Services

In the restaurant industry, food delivery and takeout services are rapidly gaining popularity. According to reports, in the US alone, 60% of consumers order takeout or delivery at least once per week. This is due to an increased demand for convenience and fast service, which has led to the growth of food delivery services and related services like curbside pickup and no-contact delivery. For restaurants that were negatively impacted by the pandemic, delivery services have become an additional source of revenue.

If you're considering using a delivery service for restaurants, you'll need to decide whether to create your own delivery team or use a third-party company. Continue reading to discover the best approach for your restaurant.

Tips for a Successful Food Delivery and Take-Out Service

If you're planning to start delivering food from your restaurant, there are several important steps you should take to ensure your delivery service runs smoothly. Here are some steps to follow:

Create a Space for Delivery

Designating a space specifically for delivery drivers to pick up their orders can increase their efficiency and help them avoid waiting in line with other customers. The area can also serve as a space for customers to pick up their orders for carry-out. To be even more efficient, consider creating a space dedicated to packaging take-out and delivery orders only.

Update Your Technology

By adopting online ordering platforms and mobile ordering apps, you can streamline your delivery service and attract new customers. This allows customers to easily view your menu, place orders, and pay digitally, which can save time and reduce errors compared to taking orders over the phone.

Train Your Food Delivery Staff

If you plan to create a delivery service for your restaurant fleet, it's important to train your delivery drivers on how to properly handle and transport food orders. They should be taught how to use insulated delivery bags, load orders into their vehicle, and safely hand over orders to customers. Alternatively, if you hire a third-party delivery service, it's still important to train your in-house team on how to accurately package orders and make sure they are handed over to the courier.

Create a Separate Delivery Menu

Making a separate delivery service for your restaurant menu can simplify preparation and packaging for your staff. Start by selecting some of your most popular menu items, and avoid items that may not travel well. You can also ask your staff for suggestions on which meals and sides would be good additions to your delivery menu.

Stock Up on Delivery Supplies

Make sure to have an adequate supply of take-out containers, utensils, napkins, cups, pizza boxes, condiments, and insulated delivery bags on hand so that your staff can easily fulfill orders without running out of supplies.

Build a Relationship with Food Couriers

If you choose to use a third-party delivery service, it's important to establish a good working relationship with the couriers who serve your location. This can make it easier to transfer orders or information and get deliveries out to customers as quickly as possible. Designate a team member to be the point person for interacting with delivery drivers during every shift.

Why Should Your Restaurant Offer Delivery Services?

If you're seeking to increase your restaurant's revenue, implementing delivery service can differentiate you from your competitors or at least help you keep up with them. It's important to note that delivery service can only promote your brand if you have an existing market presence and a loyal customer base. Potential customers won't be able to order from you if they've never heard of your restaurant before. Once you join the delivery industry, you'll be accessible to customers who haven't tasted your food before, which can potentially increase profits.

Before deciding to offer delivery, you should assess whether it aligns with your business model. For instance, fine-dining restaurants are less likely to benefit from delivery service, and some types of cuisine may not hold up well during delivery. Providing customers with low-quality delivery food can damage your restaurant's reputation, so it's important to avoid that scenario.

Attracting Millennial Customers with Delivery Services

Offering in-house or third-party delivery service for your restaurant is an effective way to attract Millennial (or Generation Y) customers who value convenience and accessibility. This demographic is now the largest population group in the US, and they're likely to use delivery services more often than the Baby Boomer generation. Since Generation Y customers prioritize convenience over cost, restaurants with delivery services can appeal to this demographic.

It's important to note that Generation Y customers tend not to be loyal to a specific third-party delivery service. Therefore, using more than one delivery service may be beneficial for your restaurant. To avoid exclusive contracts, you should look for delivery platforms that do not include these clauses. Additionally, partnering with delivery services that offer rewards and loyalty programs is a great way to attract this demographic since Millennials often consider these factors when deciding where to order their food from.

Offer Delivery and Take-Out During Pandemic Restrictions

Due to the coronavirus pandemic, many people have had to stay at home, which has made food delivery services very important for those who cannot go out to buy groceries. As a restaurant owner, you can diversify your revenue stream by adding a delivery option to your services. To inform your customers, you can use social media and your website to notify them that you will still be operating and providing delivery, drive-through, and take-out options instead of servicing dine-in customers to comply with government standards.

Advantages of Creating an In-House Delivery Team for Your Restaurant

If you're considering starting a restaurant delivery service, it's worth thinking about creating an in-house team instead of using a third-party service. Companies like Starbucks and Panera Bread are examples of businesses that have successfully adopted this model.

By having your own delivery team, you can ensure that customers associate your business with the delivery service, which increases brand recognition and loyalty. This approach also means you won't be overshadowed by larger third-party services that your competitors may be using.

Studies show that most customers prefer ordering directly from the restaurant of their choice, rather than through third-party services. Additionally, maintaining your own delivery team is typically less expensive than using third-party services, and it allows you to collect all the profits from each meal sold.

Creating your own delivery team also gives you complete control over the customer's dining experience, from ordering to payment. Your employees, whom you know and trust, will also be the ones interacting with customers, rather than staff from a third-party company.

Considerations for In-House Delivery Teams vs. Third-Party Delivery Services for Your Restaurant

Creating an in-house delivery team for your restaurant can have its advantages, but it may not be the best option for everyone. If you own a small business, it may not be financially practical to hire delivery staff. However, there are other options to consider. For example, you could opt to use a third-party delivery company that charges a low commission, which can help to increase your profit margins. By exploring various delivery options, you can find the one that best suits your restaurant's needs and budget.

Popular Third-Party Food Delivery Options and their Features

Third-party food delivery companies are businesses that partner with restaurants to provide food to customers. These companies offer food delivery apps that make it easy for customers to browse menus, order food, and track their order as it's delivered to their location.

There are several popular third-party delivery options available, including Caviar, DoorDash, Grubhub, Postmates, Uber Eats, and Yelp Eat24. These companies offer a variety of features, such as real-time GPS tracking, convenient online payment, the ability to schedule deliveries in advance, and easy reordering.

By using a third-party delivery service, restaurants can expand their reach and attract more customers. However, they may also have to pay a commission fee to the delivery company, which can eat into their profits.

In contrast to third-party services, in-house delivery services involve businesses hiring their own delivery drivers or training existing employees to deliver food. This can be a more cost-effective option, as the business keeps 100% of the profits from each meal served. It also allows the business to have complete control over the consumer's dining experience, from ordering and meal preparation to delivery and payment.

Chain Restaurants Utilizing Third-Party Delivery Services

Third-party delivery services have gained popularity among single-location businesses as well as chains across the country. For example, 7-Eleven has partnered with DoorDash for delivery services. Auntie Anne's, Carvel, and Cinnabon have teamed up with Postmates. Chipotle has also collaborated with Postmates for delivery services, as have McDonald's and Moe's Southwest Grill. Starbucks and Taco Bell have partnered with Postmates and DoorDash respectively for their delivery services.

Benefits of Partnering with Third-Party Delivery Companies

Working with a third-party delivery service can offer numerous advantages to your business. Partnering with these companies can help increase brand recognition, boost sales, and avoid losing customers due to long wait times or busy phone lines. For businesses that don't want to manage the responsibility of hiring and training a delivery team, these services can provide a smart alternative.

Your customers can also benefit from using third-party delivery services, as they offer the option for repeat orders and may even provide mobile apps to save credit card information for easy ordering in the future. Additionally, since many third-party services are in competition with each other, this can drive down service charges and commissions, making it an even more attractive option for businesses.

How to Mitigate Risks When Partnering with Third-Party Delivery Companies?

When you hire a third-party delivery service for your restaurant, it's important to consider the potential risks involved. There is a risk of liability from issues such as third-party drivers getting into automobile accidents or customers developing foodborne illnesses from meals that have been in a car for too long. Even though your restaurant may not be directly responsible for these issues, it's essential to take measures to protect your business.

One way to minimize your risk is to create written partnership agreements with all the delivery services you work with. These agreements should include specific provisions such as requiring delivery companies to comply with industry standards for safe food handling, which includes maintaining proper temperatures during transit. You should also choose services that use GPS tracking to establish responsibility in case of any foodborne illnesses.

Additionally, you should require delivery drivers to provide proof of insurance and clear vehicle ownership. The written agreements should also include specific language that shifts full responsibility for any issues in transit onto the third-party service. The delivery company should also have insurance coverage that names the specific businesses they're partnered with to further protect your business.

To anticipate potential customer concerns and complaints, it's a good idea to include specific disclaimer language in your delivery menus, paper ads, and on your website. This language can inform customers of the potential risks associated with third-party delivery services and help protect your business from potential legal action.

Impact of Delivery Services on the Foodservice Industry

Are you curious why online restaurant delivery services are becoming increasingly popular among consumers? First and foremost, they offer a high level of convenience by enabling customers to place orders from their homes or workplaces without leaving. Additionally, these services provide customers with the opportunity to browse menus of restaurants they haven't previously heard of and even encourage them to try new cuisines and establishments. According to various studies, the growing popularity of third-party delivery will have a positive effect on the sales and profits of businesses that adopt it, while those that do not may suffer. Given that the dining industry is worth over $863 billion in the United States, the impact of delivery will be significant for thousands of businesses.

It's also important to ensure that your business isn't engaging with unauthorized third-party delivery services without your knowledge. Although companies like Postmates place orders on behalf of customers and then collect the orders themselves, your restaurant may not be aware of this interaction. This doesn't mean you should avoid using Postmates, but rather emphasizes the need to have contracts and partnership agreements in place before partnering with any third-party delivery service.

More and more establishments, from family restaurants and coffee shops to convenience stores and markets, are now turning to delivery. When considering adding a food delivery service to your business, the most crucial decision to make is whether to utilize a third-party delivery service or establish an in-house team. Regardless of your choice, effectively utilizing delivery can help increase your brand's visibility while also boosting your revenue.