The New Normal for Restaurants: Own online ordering & delivery system

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  • Is your Restaurant Business trying hard to keep its head above water in these testing times? 
  • Is profitability in aggregator driven food delivery model a challenge for you?
Having your own online ordering system may help you optimize for profitability and performance.
Let's try and simplify this for you.

What does the current online ordering scenario look like for Restaurants in India?

Hospitality is easily one of the worst affected industries from Pandemic (COVID-19). Multiple restrictions (and several rounds of those restrictions) across the globe have severely impacted the industry. 
Needless to say, Small Businesses have suffered the most. It was reported in 2020 that 1 in every 4 restaurants in India may not open again. The situation has aggravated post the second wave and fresh round of restrictions.

As they say, 'Necessity is the mother of invention'. The situation has forced Restaurants to strengthen revenue streams like 'Online Food Delivery' and embrace the new normal. While online food delivery is not new to Restaurants in India, it has forever been dominated by aggregators like Zomato & Swiggy.

Aggregator platforms solve 3 basic challenges of online food delivery for Businesses:

1) Discoverability

As these Apps are extremely popular amongst consumers, it makes sense for Restaurants to be listed on these platforms and be discovered by their potential clients. 

2) Scale

Owing to their huge user base & scale of operations & marketing, aggregators provide multi-outlet Restaurants the desired scale for their online delivery Business.

3) Logistics

This is the most challenging bit of the online delivery space and aggregator platforms take the headache of managing the delivery fleet in their hands. So, it makes life easier for Restaurants.

Having understood how aggregators facilitate online food delivery for Businesses, let's look at a couple of challenges Restaurants face with these platforms:

1) Commission

Zomato & Swiggy charge anywhere between 18-30% commission per order from partner Restaurants. Commissions coupled with rentals, food, packaging, marketing & other operating costs leave the Restaurants with little to no profit margin.

2) Customer Data

In an era, when data is the king, Restaurants do not have access to their customer data while operating with the aggregators. Sad...Right? Not having access to database of customers ordering online from you impacts post sale service level & marketing program delivery.

3) In-App visibility

With a spiraling number of Restaurants on the App, visibility has become a major issue for Businesses. To remain visible to potential customers, Restaurants have to actively spend on In-App advertisements & offer heavy discounts to customers. All of this further shrinks the profit margin.

How can you set-up own online ordering system for your Restaurant?

Companies like DotPe & Thrive Now help Restaurants overcome the above outlined challenges by setting-up their own online ordering systems. 

These players charge anywhere between 1 to 3% commission (excluding payment gateway charges) and set-up a Restaurant specific online ordering web page. In addition to the commission, DotPe charges an annual subscription cost per outlet.

DotPe & Thrive Now have integration with most of the leading POS manufacturers, thus, promising a single order acceptance interface for the outlet team. Restaurants can manage their online menu, discounts & other features from the dashboard and have full access to their customer data. Thrive Now also provides additional Marketing tools (CRM) as a part of the solution. 

To facilitate order delivery, DotePe & Thrive Now are currently operating with delivery partners like, Dunzo, Shadowfax, WeFast & Pidge. Restaurants have to pay for the services of these delivery partners as per the rate card (based upon delivery distance) and can choose to deliver up to 30 kms. 

Before you decide to take the plunge, it's important to keep the following in mind

1) Marketing for the win

This model requires for you to commit to an All-in marketing program. 
Setting up an online page and expecting orders to pour in automatically is like expecting a heavy rainfall after planting a sapling. You must put a multi channel marketing program into action. Leverage social media & influencer marketing, direct messaging, WhatsApp marketing and whatever else seems to be working for your brand. 

2) Share the gain

Be ready to pass on additional benefits (discounts & offers) to customers, so that they are motivated to order from your website and not aggregator platforms. This may seem like a daunting task, considering the aggressive discounts offered on aggregator platforms. But, with an innovative and data driven approach (discounts linked to customer segments), you can surely crack the code.

3) Develop it as an alternate channel

It may be wise to remain listed on aggregator platforms due to scale & discoverability benefits.  Users landing on these platforms have a very high intent of food ordering and therefore, being available on these platforms (and spending on in-app marketing) can put your Restaurant in the consideration set of a qualified buyer. 

4) Patience is the key

Based upon your marketing efforts (and spend), you own delivery channel may mature in 3-8 months. Once that happens, loyal customers will automatically move to your website and you shall start reaping the benefits.

For what kind of a Restaurant will this model not make immediate sense? 

For the Restaurant which pays less than 20% commission to aggregators & may have limitations when it comes to committing to a comprehensive marketing program.

Setting up own online ordering system is a promising proposition for most Restaurants and looks like it's here to stay. 





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