Seventy per cent of consumers want restaurants to take their money, not ‘Deliveroos’
Research from Preoday has revealed the findings on consumer attitudes to third party mobile and online ordering providers (such as Deliveroo and Just Eat) which charge commission fees; 70 per cent say they’d rather order direct, preferring that their money goes straight to the restaurant, not a third party. Only 15 per cent said they didn’t really care how much money the restaurant received from their order.
The response came after consumers were informed that 68 per cent of food and drink professionals, questioned by digital ordering technology provider, Preoday, pay commission fees to their digital ordering technology supplier. Prior to this information, 74 per cent had already said that they order food online or through a mobile app: 30 per cent used aggregators such as Deliveroo and Just Eat, while 23 per cent went straight to the restaurant to order; 21 per cent said they look at both options and decided at the time. The shift in opinion is apparent; when given the full story, consumers want restaurants to take their money, not technology suppliers.
Nick Hucker, CEO of Preoday, comments: “The consumers’ change in response is key. It shows that with simple education, many customers would be willing to change their ordering habits. It also demonstrates that they do care and want to support their favourite brands. Given how much revenue some venues lose to third party platforms, this finding could be significant.”
How much is too much?
Of the professionals whose restaurant businesses give customers the opportunity to place food orders online or via a mobile app (be that an aggregator or their own branded platform), 25 per cent are paying more than 20 per cent commission per order, only 16 per cent pay less than ten per cent.
Questioned on whether they thought the commission fees they were being charged were fair; only 12 per cent of operators said that they were – 82 per cent said they were too high and 33 per cent went so far as to say that the fees weren’t worth the result.
Nick comments: “Such high commission fees can be damaging to a business’ profit, and in these challenging times, to its survival. Food service businesses make, on average, between five to eight per cent profit, so if they’re paying 20 per cent plus in commission fees, that profit is being eaten away. You have to question why these businesses don’t cut out the middleman and use a branded a technology that doesn’t stand in the way financially.”
Investigating this point, Preoday found 38 per cent of the questioned professionals would rather their business had its own ordering website/ app than use a third-party provider; only 14 per cent thought that it’s better for a brand to have a third-party app than use its own order or delivery app. Worryingly, 38 per cent claimed that that once a business has started using a third-party ordering technology, it’s difficult to break away.
Preoday’s research further explored the access to customer data that digital ordering technology providers give clients. It found that, of those food service businesses offering a digital ordering service – whether own-branded, or through an aggregator, 44 per cent aren’t given access. Considering the important role that data plays in understanding customers, enhancing marketing and giving a personalised service, it shouldn’t be surprising that 43 per cent of professionals said they believe third party apps – many of which withhold data – interfere with the direct relationship between a restaurant/bar/pub and its customers.
Nick finishes: “There are many applications for the insight gained from customer data, but at its most basic, that data can help a business get to know its audience and build a relationship based on exactly what the customer wants. Something every person at Preoday is passionate about is data; we are proud of the data we help our clients gather on their customers and how our technology lets them analyse it for use. Unlike online ordering companies that keep customer data from their clients, we see it as an essential part of our service and believe it helps grow successful businesses. Without it, how can a restaurant, bar or pub get to know its customers better and – therefore – grow its takings?”
Preoday is a robust digital ordering platform that helps food and retail businesses around the world open new revenue streams and improve relationships with customers. Preoday enables businesses to offer branded online and mobile pre-ordering facilities to customers purchasing food, drink and merchandise. It provides a white-label service to businesses ranging from restaurants and cafes to corporate caterers, theatres and stadiums. Preoday works both directly with businesses and partners including resellers, technology providers and ticketing agencies.