To bring balance to a relationship with a third-party vendor, restaurant owners and operators can start by putting their needs first and taking control of their technology.
This article appears in its original context on the QSR Magazine website
By Bob Vergidis
Third-party delivery services have been a blessing and a curse for restaurants. They bring equal parts opportunity and challenge to the industry as it navigates its comeback from COVID while also battling high labor costs, worker shortages, and inflation.
The strength of a third-party delivery service lies in its ability to allow customers to browse multiple menus and food options from a single, user-friendly platform. As a result, restaurants lacking better options have flocked to these services, and for many of them, it has been predominantly a win-win situation. These services can help increase sales and decrease labor costs especially when limited resources hold back restaurants from launching their own delivery. They have also birthed the concept of the ghost kitchen, which can be as simple as a delivery-only restaurant or as complicated as a multi-concept shared kitchen that fulfills orders for multiple virtual brands existing purely on third-party service apps.
The problem with third-party delivery services is that they end up hurting the same industry they depend on for their success. Exuberant fees eat upward of 25 percent of the restaurant’s sales, forcing them to raise prices in order to compensate and eliminating their ability to stand out from similar restaurants in their area. From the third-party marketplace perspective, it doesn’t make a difference whether restaurants succeed or go out of business, just as long as customers continue to place orders through their app with the restaurants that are able to survive on their platform. All the while, in order to make ends meet, restaurants must do all the legwork, pay for infrastructure and facilities, while giving up about a fourth of their revenue to have a “partner” in their business.
Aside from the high costs, third-party delivery services are stripping restaurants of something far more valuable: the ownership of their guest relationship. Every business depends on knowing its customer in order to grow, but third-party delivery services purposefully cut off the customer from the restaurants so that they own the relationship with these guests instead. This is a considerable challenge as it takes away restaurants’ ability to achieve long-term success by knowing who their customers are, how their needs are evolving and how to adjust their menu to serve them better in the future.
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