The COVID-19 pandemic brought about a huge boom in delivery orders, with the industry growing by £3.7bn in 2020, and one in twelve people ordering food to be delivered for the first time; leading many people to pivot towards a delivery model.
However, gone are the days of being stuck indoors(!) and the reopening of restaurants alongside the rising cost-of-living has caused a decline in the number of orders, with Just Eat seeing a 10% fall in UK orders. Not only is the number of orders decreasing, but the amount being spent on each order is too – with Deliveroo’s average gross transaction value falling by 4%. All is not lost though, maximising your ROI and standing out on delivery apps is still more than possible, below are some tips to help you on your way!
The cost-of-living crisis is affecting everyone, being predominantly caused by inflation outstripping salary increases. The annual rate of inflation hit a 41-year high in October at 11.1% thanks to increasing costs of consumer goods and rising energy prices.
Rising food prices are also a key driver in inflation, with the average transaction value increasing for supermarket shops but the number of items purchased decreasing. Now, we can all get a lot less for our money than we used to: food and non-alcoholic drink prices have increased by 14.6% in the 12 months before September.
How to combat growing costs and succeed on food delivery apps
Create Virtual Brands
If you’re a restaurant looking to branch out into the delivery scene, or you’re already part of it, and you’re looking to accelerate success there are a number of ways that you can stand out and increase sales: starting with creating a virtual brand.
Creating a menu for a restaurant can be very different than for delivery, creating a virtual brand gives you the opportunity to create a new revenue stream by adapting a menu solely for delivery use. Not only this, but restaurants can create a number of virtual brands out of the same kitchen, all with different themes, massively increasing the chances of receiving orders.
Virtual brands also provide an opportunity to use products usually wasted in the restaurant. The entire brand, or menu items within it, can be created with the focus of using up products that aren’t being used by your restaurant normally.
Tackle the Delivery App Commission Charge
One of the issues that restaurants face when thinking about launching on delivery apps, is the amount of commission that these apps take, meaning that the profit margins are much lower than when selling food traditionally from their restaurants.
Deliveroo and UberEats typically charge restaurants 31% and 25% commission respectively, making it tricky for restaurants to maintain their profit margins. One way to get around this is menu inflation – increasing the price of menu items to combat commission costs, but it could also be off-putting for customers as on average they’re spending 23% more on a takeaway app than when ordering direct from the restaurant.
Another way to avoid such high commission costs, is to become exclusive with one delivery service; some apps allow a waive in costs if you’re only available with them.
On the other hand, appearing on more than one delivery app could increase sales by up to 70%. Managing orders from multiple delivery apps means using multiple tablets, this multiplies exponentially if running virtual brands, causing operational issues. Most can’t connect to your POS or kitchen display system, requiring someone to have to input this information manually.
This process is inefficient, but can be simplified by using a delivery aggregator, like Deliverect, that aggregates all your online orders from different sources. All your orders print in one location, so you don’t have to run multiple systems, or manually enter orders into your POS. Instead of guessing which app your customers are using, you can be on all of them – and reach more customers – without the extra hassle of managing each one separately.
Improve Your Ranking on Delivery Apps
Improving your restaurant’s ranking on these delivery sites is a great way to boost sales and make the most out of this extra revenue stream. There are a number of ways to ensure your ranking is higher than your competitors, including using pictures on your page.
Pictures are a great way to show your potential customers how good your food looks and this can boost your sales by 24%.
Tenzo can help you identify which might be the best dishes to photograph; using graphical data to show you which are your best-selling dishes.
Customer ratings are a huge part of increasing your standings with individual delivery apps, and a number of factors can influence how well a customer would rate your restaurant including taste, delivery accuracy, the temperature on arrival and speed of delivery.
Temperature of Food on Arrival
Speed of delivery is another important factor for both customer satisfaction, 60% of consumers say this is a key factor in ordering online, as well as the temperature of the food on arrival – the faster the delivery the warmer the food.
Packaging is also an important aspect of ensuring the correct temperature of food on arrival, you should encourage drivers to have insulated bags and separate hot and cold items within them.
Busy mode is a really useful tool to not get overwhelmed by orders during your busiest periods, or maybe when you’re understaffed. However, leaving busy mode on for too long or using it too regularly can damage your ranking on the apps due to not receiving many orders, compared to other restaurants. Get alerted when you haven’t had new orders within the last 30 mins to ensure it’s not left on.
Preparing for Demand
Preparing correctly for the busiest times is essential so that you can accept as many orders as possible, understand your demand forecasts for your busiest days and hours so that you can maximise your sales potential by preparing with the right amount of labour and food.
Increasing Page Traffic
Increasing traffic to your pages on delivery apps is another great way to improve your ranking within them. One of the easiest ways to do this is to let your loyal dine-in customers know about your presence on delivery apps by giving them special discounts to use.
You could also advertise on your social media pages, this is essentially a free advertising method, reaching out to those who are already interested in your business – putting a link on your social media page is an easy way to direct people to your page.
In-app promotions increase the likelihood that you’ll be ranking higher on delivery apps, as well as increasing your number of sales. Generally, you’ll rank higher on apps during your busiest periods; identify these periods and offer in-app promotions during these times to further boost sales. This further solidifies your position as being a popular restaurant during these periods, allowing you to develop a consistent workflow.
Another way to decrease costs, whilst also boosting sales, is to promote menu items you’re in excess of by putting discounts on these specific items; increasing the chances of someone purchasing them – and reducing waste!
Finally, keeping on top of trends is always important within the restaurant industry, but if you’re new to the delivery sector, this is an especially good idea to keep an eye on. If menu items are continuously performing badly, get rid of them. If there are menu items that are performing well, create more like them.
Delivery apps are taking a bit of a hit in sales after a huge boom post-COVID, but that’s no reason to suggest that they’re not great ways to boost sales. Standing out on these apps and being high-up in their rankings is hard and it comes down to a number of factors, but delivering great quality food, within expected times, is a great place to start!
If you’re interested in speaking to one of our restaurant experts about how we can help you get the most out of deliveries, please reach out!