The COVID-19 pandemic has led to an unprecedented challenge thrown at public health, food systems, and the world of businesses. It turned global industries upside down, having a particular toll on the restaurant industry.
If you’re feeling dizzy, trying to catch on to restaurant reopening regulations, well, that’s because this industry has seen it all from extreme safety measures to complete shutdowns and partial reopenings.
While some restaurant chains have shown creativity and resilience, becoming movie theaters, others are trying to emerge from the deadlock by collaborating with third-party delivery services. As tempting as it may seem, outsourced delivery services often fall short of restaurants’ expectations.
Let’s find out why food delivery services are not the safest bet and how to set up your business for success by creating your own restaurant ordering mobile app.
The Problem With Managed Food Delivery
Since consumers have significantly increased their spending on online food delivery over the last few years, restaurateurs are willing to expand their businesses by partnering with online food delivery platforms. However, UberEats and other delivery providers are seeing a growing frustration from their restaurant partners. There are some solid reasons for that:
- High commissions
Restaurant operators complain about the monstrous commissions they have to pay to delivery providers. These platforms allow foodies to order their favorite meal from local restaurants and have the food delivered right at their doorsteps. For these services, third-party platforms often charge restaurants around 30% per order, not to mention activation fees, customer support, and marketing expenditures.
- Razor-thin profit margins
So why don’t restaurants raise the prices to make up for the costs? Food delivery platforms have taken care of that as well. According to their policies, eateries must have the same prices both on the app and on the menu. Therefore, these commissions can take down the restaurant’s profits or put them in the red.
- Far-from-perfect delivery
Even if restaurants shell out for managed delivery services, they cannot be 100% sure that the order will be delivered safe and tasty-looking. And let’s not forget that maintaining the correct hot and cold holding temperatures of the food is essential for satisfying the customers.
- Lack of data control
Restaurants also hand over precious customer and marketing data that cannot be used by eateries if they opt out of delivery services.
Now that you’ve got the taste of it, let’s see what benefits you can reap from your own restaurant app.
A third-party Delivery Service vs. In-house Delivery App
Let us go over the major differences between apps for restaurant owners and managed delivery services.
As we’ve already mentioned, third-party delivery providers charge monstrous fees for their services. Let’s run the numbers and see what a 20% fee means for an average eatery.
Imagine you are an owner of a Hamburger Heaven based somewhere in Minnesota with 10 locations and 1500 workers. A yearly profit of your food establishment rounds up to about $60 mln, and you get more than 70% of your orders from the food delivery service.
Now let’s do some elementary math. It turns out you earn 42 mln from 70% online orders minus 20% commission, which equals $8,4. From $33,800,000 that remains, your 5% profit margin will be $1,690,000.
On the contrary, if you shell out for app development services, it won’t cost you nearly that much, while helping you avoid the delivery commissions and other overhead costs.
When you join a food marketplace, you have a specified scope of tasks like uploading meals, adding prices, and managing orders. The third-party food delivery platform takes over other hassles, including delivery and tech support.
An in-house dedicated application raises the bar high and makes you a one-person show. You are responsible for each and every operation from courier training and hiring burdens to managing customer services.
Third-party platforms kill the vibe since your customers do not interact with your brand directly. As a result, you end up with a low acquisition rate and a couple of loyal customers. After all, the primary objective of food requesting platforms is to win over the users by providing a choice, not boosting customer loyalty or protege a particular eatery.
If you have your own food ordering solution, you take over all customer data, thus obtaining a magic wand for setting up a community of loyal customers around your restaurant.
From a technical standpoint, a tailor-made application provides maximum personalization that clicks with your brand image and target audience. Providing a bespoke experience is the best way to tap into customers’ needs.
Food delivery platforms do not bode well for the future of your business. In the long run, you end up at a standstill of ever-growing fees that offset your customer base. So instead of getting a profit increase, you face a declined profit margin.
On the other hand, a tailor-made software solution requires a one-time payment that can be made back during the first year of the app’s launch. After that, your app will take off. To earn more profit, you can partner up with other restaurants to feature them on your platform as UberEats does.
However, instead of 20%-30% fees, you can require 5% or 10% which is an affordable amount even for startups.
Must-have Features for Food Ordering Apps
Restaurant ordering apps revolve around three main players, including eateries, couriers, and users. Let’s have a quick low down of the essential features to meet all needs.
This software serves as a middleman between a customer and a restaurant that allows users to find and order their favorite foods. Typically, customer applications include the following features:
- Simple registration. Enable users to sign up through social media profiles, or by using their email.
- User profile. The customer profile should feature personal data such as name, email, number, and delivery address.
- Great search engine. Allow users to narrow down the search by using an advanced set of filters.
- Placing an order. Once the customer decides on the meal, they will then proceed to checkout.
- Various payment options. Make sure to provide various payment methods including cash, credit card, PayPal, etc.
- Delivery time estimation. This feature allows users to see the exact time period when their order is expected to be delivered to the final destination.
- Order tracker. The application shows the real-time location of the courier.
- Reviews and rates. Provide a space for users to share their feedback or offer valuable insight for further development.
- Push notifications. The application notifies customers of order status changes, new promos, and discounts.
We suggest considering the following features:
- Menu management. You can update existing product categories, review meal descriptions, add content, or change prices.
- Order management. You can accept or refuse orders and update the order status.
- Live-chat. This feature allows restaurants to communicate with customers in real-time.
- Delivery requests. To proceed with delivery, you add a new delivery request to notify nearby couriers.
To stay one step ahead with your couriers, the application needs to have the following features:
- Delivery requests management. The delivery person can approve or decline an incoming delivery request and update its status.
- All orders. The app lists all orders, including the completed ones.
- Geo-location feature. The app helps couriers navigate the terrain and provides a shortcut to the customer’s place.
- Real-time delivery tracking. The app sends the current location of a courier to the customer side.
- Delivery time. The in-built system automatically estimates the delivery time and sends the data to the customer application.
Unlike the applications mentioned above, the admin panel operates on the Web. Admin panel allows you to manage the settings of the food delivery apps, add or delete pages, and edit content.
- Dashboard. The admin can see all the important features concerning the orders, deliveries, and payments.
- Accounts and management. The admin can delete restaurants, couriers, and users from the platform when needed.
- Order management. Admins get the data about all orders using a specific number and update the order status.
Costs for Developing a Mobile App for Your Restaurant
Restaurant app development costs stem from various expenditures, including the complexity of the app’s features, design, functionality, etc. You can expect only a rough estimate before the development process begins. The assigned development team can provide an accurate estimate after the Inception phase.
Anyway, an average 3-sided restaurant application may cost you somewhere between $40k-$80k, whereas the total project cost may vary from $150k to $300k. The price will double in case you want to build an application for both platforms.
The Bottom Line
The global food industry took a low blow from the COVID-19 pandemic, as governments close down restaurants and bars to slow the spread of the virus. This encouraged restaurant owners to find new opportunities in order to keep on track. And restaurant applications have grown to become that beam of light. However, instead of collaborating with existing delivery platforms like UberEats and Deliveroo, restaurants can retain old customers, increase sales and brand awareness by investing in their own tailor-made solutions.