You must offer online ordering for your restaurant
Not too long ago, food delivery was basically reserved for big pizza chains. It wasn’t feasible for a typical cafe or restaurant to set up their own ordering or delivery service. It was simply too expensive to have drivers on payroll, buy scooters or cars, and develop an online ordering platform.
But technology has come a long way, and customers now demand the option of sitting their butts in front of Netflix, ordering food online, and getting it delivered right to their door.
Fortunately, that same technology has made it easy for cafes and restaurants to offer an online ordering service to their customers. So, as a restaurant owner, you need to ask yourself: should I offer online ordering?
To be honest, we thinking online ordering is a no-brainer. Not only does it make life easier for your customers, but it also benefits your business:
- Access more potential customers. Don’t just rely on foot-traffic or word of mouth, online ordering solutions enable you to get your cafe or restaurant in front of thousands of hungry customers.
- Retain your loyal customers. Sometimes your customers want to eat restaurant food but don’t feel like going to a restaurant. Without an online ordering and delivery solution, those customers will either eat at home or worse… eat at your competitor.
- Reduce order errors. Trying to take telephone orders next to a loud kitchen is a recipe for disaster (no pun intended!). By allowing customers to order through a website or app, there’s no risk that you misunderstand a customer’s order.
- Save costs. Staff salaries are one of the biggest expenses for a cafe or restaurant. Online ordering allows you serve your customers with fewer waitstaff.
- Protect against lulls. Customers really hate going out for food on rainy days and during peak hour traffic. With online ordering, you give customers the option to eat your food when and where they want.
What are your online ordering options?
Online ordering is clearly beneficial for your business. But the question then becomes: should you jump onto Uber Eats or implement your own online ordering system for your restaurant?
First, let’s look at the difference between each option:
- Food delivery aggregators: These solutions bring together thousands of restaurants on a single platform, and allow customers to browse and choose between those restaurants. The platform will also track the status of the order, pick it up from the restaurant, and deliver it to the customer. Examples include Uber Eats, Deliveroo, and Menulog.
- Branded online ordering systems: These platforms enable you to quickly spin up an online ordering website just for your restaurant. You can have a custom menu, branding, and website address. These will generally integrate with your restaurant point-of-sale and third-party food delivery services.
You need to join delivery platforms and also have your own online ordering system
Over the past few years, there has been a strong backlash against food delivery platforms, such as Uber Eats. The main complaint is their fees, which can be as high as 35% of the order value. Because of this, you’ll see a bunch of people recommending that restaurants don’t use these platforms.
The problem is that Uber Eats is a great way for your restaurant to get in front of customers when they are deciding what to eat. It helps you find and acquire new customers.
Even if you had your own online ordering system, it would only be useful for customers that already know about your restaurant and want to make an order. Compared to Uber Eats, this is a poor way to acquire new customers.
You can’t substitute Uber Eats with your own online ordering system. Uber Eats is a great way to acquire new customers, whereas your own ordering system would only be useful for existing customers that already know your restaurant.
The key is to use Uber Eats and other delivery platforms as a customer acquisition tool. As soon as customers have ordered from your restaurant once, you then need to incentivise them to order through your own more cost-effective online ordering system.
Keep reading, we’ll tell you how.
Joining delivery aggregators like Uber Eats and Menulog
Your restaurant must be visible when the customer is choosing what’s for dinner
Every Friday night, in cities all around Australia, the same situation arises. Mum and Dad arrive home, exhausted after a long week of work, and all the batch-cooked leftovers from the week are finished. And after cracking open a cold beer or a nice glass of red, they decide to treat the family and order-in dinner. It’s been a long week, ok?
The family might choose to order from their favourite local Chinese restaurant. But if they want something different, then how do they find new restaurants?
Like most people, they then open up Uber Eats or Menulog to browse for dinner ideas. These platforms bring together thousands of dinner options and help the customer find something that they want to eat.
As a restaurant owner, you need to have a presence on all of these delivery platforms. You need to be visible while the customer is considering which restaurant to order from.
But delivery aggregators are very expensive
Unfortunately, getting your cafe or restaurant in front of thousands of potential customers doesn’t come cheap. Uber Eats and similar platforms charge cafes and restaurants up to 35% of the total order value in fees.
For most restaurants, this is not sustainable. After paying for overheads (rent, equipment hire), inventory and ingredients, and labour costs, most cafes and restaurants only generate a profit margin of around 10-15%.
And then if you add a 35% Uber Eats order cost, the cafe or restaurant quickly starts making a loss. So what do you do?
As we mentioned, it’s important to be on delivery platforms like Uber Eats — but the platforms are not very cost-effective.
This means you must improve the profitability of the delivery platforms as much as possible, and incentivise customers to order through more cost-effective channels as quickly as you can (e.g. your own online ordering website or telephone orders)
There are a few things that you can do:
- Customise your Uber Eats menu to focus on a few high margin dishes. You know that any orders through Uber Eats will have low margins, so limit your Uber Eats menu to a few items that are quick to make, high margin, and hold up well during delivery.
- Consider increasing your Uber Eats pricing. If your Uber Eats fees are too expensive, consider increasing the prices to cover your costs. This is a very common practice and hasn’t been shown to significantly affect order volumes.
- Drop a customer offer in the Uber Eats delivery bag. Leave a small flyer in the delivery bag that includes a discount or offer for orders that are made through a more cost-effective channel (e.g. your own online ordering website or telephone orders).
Integrate delivery platforms with your point-of-sale
Delivery platforms also have an operational cost. You will need to run the delivery platform software (e.g. Uber Eats restaurant app) on a tablet.
If you’re using Uber Eats, Menulog and Deliveroo, this quickly gets out of hand. No restaurant wants to have 4-5 tablets sitting on their counter to continually monitor for new orders. Your point-of-sale software is the core of your restaurant operations, so all orders should ideally land in there.
To do this, you need to integrate delivery apps with your point-of-sale. There are two ways to do this:
- Check if your point-of-sale has delivery platform integrations. A few point-of-sale solutions have integrated Uber Eats and other platforms directly into their software. For example, Redcat POS and Lightspeed POS have integrated directly with Uber Eats. You should check with your point-of-sale provider.
- Integrate via the Doshii middlewear. You can also connect your point-of-sale to Doshii and then connect Doshii to Deliveroo. Unfortunately, Doshii does not have Uber Eats or Menulog integrations.
Unfortunately, there is no solution that will allow you to integrate any delivery aggregator with any point of sale. So it’s most likely that you will be stuck with a couple of tablets to manage delivery platform orders. Hopefully this changes soon.
Launching your own online ordering system
Launch ordering quickly using branded online ordering systems
We’ve spoken a lot about delivery platforms like Uber Eats, and we recommended restaurants use those platforms but incentivise customers to use more profitable ordering methods, such as a restaurant’s own ordering website.
But how do you build an online ordering website for your restaurant?
It’s easy. You use a branded online ordering system. These allow you to quickly spin up an online ordering website with a custom menu, branding, and website address.
Branded online ordering systems will generally integrate with your point-of-sale to ensure that your menus and pricing are synced, and that your stock levels remain accurate. They will also integrate with third-party food delivery services, so you can offer delivery without major setup costs.
But these online ordering platforms are not a replacement for Uber Eats and Menulog.
Whereas food delivery aggregators help customers decide what restaurant they want to order from, branded online ordering websites enable a customer to make an online order if they already know that they want to order from your restaurant.
The key is to use Uber Eats and other delivery platforms as a customer acquisition tool. As soon as customers have ordered from your restaurant once, you then need to incentivise them to order through your own cheaper online ordering system.
Branded ordering platforms are much cheaper than delivery aggregators
There are a number of reasons why you’d prefer your customers use your branded online ordering systems:
- It’s cheaper for your restaurant. The main benefit of branded online ordering systems is the fee structure. These platforms only charge fees of 3-5% of the order value, which is much more cost-effective than the 35% fee charged by Uber Eats and other aggregators.
- You own the customer relationship. You get access to a customer’s email address and other data, so you’re able to cultivate customer relationships and market directly to your loyal customers.
- It integrates into your existing order flow. Customers make orders and pay online, but those orders are automatically sent into your point-of-sale and off to your kitchen just like a dine-in customer.
|Fees||$59/mo + 3% per order||5% per order||4.5% per order||5% per order||$59/mo + 3.9% per order|
The secret sauce of branded online ordering systems: Table ordering
The added benefit of using branded ordering platforms is that, unlike delivery platforms, they also offer table ordering.
As a customer sits down at their table, they will see either an NFC reader/dongle or a QR code. After the customer either taps their phone on the dongle or scans the QR code, an ordering page will pop up on their phone.
The customer can make their order and pay through the page. The order is then automatically sent through to the point-of-sale and enters the normal restaurant order flow. Once the food is ready, a staff member simply takes it to the table.
As a restaurant owner, it’s important to remember that every customer is unique and there will be some that want to speak to a person to discuss the menu. Nonetheless, table ordering is great for both your restaurant and your customers:
- Reduce restaurant expenses. Customers that use table ordering do not need support from a staff member, which means that you can potentially reduce salary costs.
- Easy split bills. When groups sit down at a table, they generally order together and then have to sort out the bill at the end of the meal. Table ordering allows each person to order and pay for their own meals, solving the challenge of splitting the bill.
We’ve gone into a lot of detail in this article, so let’s distill restaurant online ordering into a few key principles:
- You must join delivery platforms like Uber Eats. Although these platforms cost about 35% per order, they are (unfortunately) the most effective way to attract new customers to your restaurant.
- Focusing on improving the profitability of delivery platform orders. Consider only selling a limited selection high margin dishes that hold up well during delivery, and don’t be afraid to increase your prices above the normal dine-in price.
- You must also offer direct online ordering. Use a branded ordering system like Mobi2Go or OrderUp! and launch your own online ordering. This will only cost you between 3-5% per order and will integrate with your restaurant point-of-sale.
- Incentivise your Uber Eats customers to start ordering direct online. Drop a small discount or offer in the Uber Eats bag and mention it to your pick-up customers. The goal is to shift customers to the most cost effective ordering channel.