A guide to maximising online order profits

03 October, 2019 by
James Eling

Words by James Eling

Since the 1950s, restaurants have been providing pick-up and delivery services for customers wanting to experience great restaurant food in the comfort of their own home. But over the past 10 years, large multinational companies have entered the Australian market, looking to place themselves between restaurants and the customer.

Advertisement

The move has placed significant pressure on margins, and some restaurants have closed after accepting high numbers of orders through these companies because they have been shipping meals at a loss.

Understanding the economics of online ordering is more important than ever. The three main online ordering aggregators in the Australian market are Deliveroo, Uber Eats and Menulog.

Advertisement

Consider these tips, which could help your venue get ahead in the delivery game.

Think about food packaging

Some meals travel well and others don’t. Pizza travels really well, but burgers and chips don’t as they can become messy and are difficult to keep warm. Remember, you don’t have to deliver your entire menu.

Advertisement
Look at offering takeaway only

Some customers are happy to pick up their food from a venue which offers the convenience of eating at home, in turn allowing the restaurant to skip dealing with delivery personnel. Takeaway can scale well for kitchens that can sustain the throughput.

Look at your pricing

If Uber Eats or Deliveroo are taking 35 per cent, you should look at having different pricing for customers ordering through these channels. Some restaurants have had success negotiating a lower rate of commission and others have had a good experience increasing prices. One restaurant I spoke with increased prices by 35 per cent and saw a decrease in order numbers, but retained the same value by shipping each order at a profitable price.

Leverage your POS or free restaurant online ordering systems

By using your POS or free online ordering systems, you cut out the middleman. Venues can capture customer details and provide a better service, be it delivery, pick-up or both. Some restaurants are saving thousands of dollars every month by doing this.

Build your database

If you don’t get the customer’s email address, they aren’t your customer. Your database is a gold mine for turning new customers into repeat customers.

Use more than one online system

Online ordering systems can close shop quickly. We have already seen Delivery Hero and Foodora leave Australia abruptly, leaving restaurants scrambling to replace them.

Offer an ‘order direct and save’ campaign

Customers are loyal when they are given loyalty discounts such as getting the tenth order free after they order nine. The same offer is provided by a number of online ordering services.

Focus on your dine-in experience

The origin of the word restaurant is to restore the soul. Some restaurants know this and do it very well. Enjoying the human interaction that comes with dining out is an integral part of the product that can’t be delivered.

The introduction of large order aggregator companies has fundamentally changed online ordering, but we are seeing restaurants across Australia using some or all of these techniques to not only survive online ordering, but to thrive on it.

James Eling is a global restaurant marketer and the host of Secret Sauce, a restaurant marketing podcast specialising in venue profitability.

This story originally appeared in Hospitality’s July issue. Subscribe here.