Digitalization of Food Delivery: A New Innovation for Restaurant Businesses
Online food delivery outshines the traditional delivery approach in numerous ways. Here is a blog on how businesses can benefit from online food delivery
The dining sector has witnessed tremendous evolution in its operations in recent years. This is because of the changing consumer trends, due to which restauranteurs are compelled to change the way they operate their business in order to remain favorable to the market and secure their profitability.
One of the most visible impacts of this evolution is visible in the food delivery segment of the dining sector, which has become smarter over the course of the years. This service used to contribute a small percentage of the restaurant’s overall revenue until some years back, but it has become the whole and sole revenue source of many restaurant businesses in 2022.
This blog will provide complete information on the way in which restaurants have digitalized food delivery and have used food delivery platforms like websites and mobile apps to their benefit. However, food delivery is one of many aspects of a restaurant business. Therefore, in order to understand its digitalization, we first need to understand how the dining sector is utilizing digitalization to its advantage.
Digitalization of the Dining Sector
Digitalization has had a tremendous impact on numerous industries and sectors and has changed the way in which they operate. Today, businesses are welcoming digitalization with open arms due to its ability to increase business productivity, improve efficiency, enhance customer experience, and, most importantly, boost revenue.
The dining sector is no exception in this matter and has significantly benefitted from digitalization. Numerous restaurants and food and beverage outlets have implemented technology in one way or the other and have taken a step towards digitalization.
While some restaurants use basic digital technologies like POS (Point of Sale) systems and digital payments, others have taken their operations to the next level with hologram menus and robot servers. Nevertheless, it cannot be denied that technology is playing a critical role in improving the dining sector for diners as well as restauranters.
Moreover, the scope of restaurant technology has expanded beyond ‘in-house dining’ and has reached the diner’s home. Today, diners can use high-end technologies and get an exquisite dining experience from their home, all of it with top-notch digitalized food delivery services. Let’s learn more about this concept in the upcoming section.
Evolution of Food Delivery: Offline to Online
While some diners prefer to dine on the restaurant’s premises and enjoy an exquisite dining experience, others prefer having their meal in the comfort of their home or, in some cases, other locations. This is where the role of food delivery comes into the scenario.
Restaurant businesses are aware of the tremendous demand for food delivery and have been offering this service for a long time. Owing to digitalization, restaurants have been able to use technology to enhance food delivery services.
While the essence of food delivery has remained the same (i.e., delivering food to the customer’s doorstep), digital technology has made it possible for businesses as well as order and manage food delivery with ease.
Before the advent of technology, customers had to call restaurants and place their orders manually. This is challenging for the restaurants as well as customers, as there is no rigid record of delivery. However, with the advent of technology, restaurant businesses can take the food delivery experience to the next level and make it a considerable source of revenue generation.
Today, restaurant businesses use digital technologies and facilitate online food ordering and delivery to their customers. However, restauranters often wonder about the benefit of investing additionally in food delivery platform development.
In the upcoming section, we will discuss ways in which businesses benefit from online food delivery.
8 Advantages of Online Food Delivery
Automated Order Management
While taking orders for food delivery is easy, managing these orders is often a challenge for restaurants. In traditional dining operations, businesses have to keep a manual record of all the food orders, with no track of the customers or the tables.
Moreover, in traditional food delivery, customers usually call the dining outlets to place their orders. In many cases, these calls turn out to be trolls, resulting in business losses for restaurants, as there is no record or known identity of the caller.
However, a restaurant business can overcome these challenges by using online food ordering platforms. These platforms are usually integrated with other technologies like POS software for order management automation.
Moreover, most online food delivery platforms require the users to create an account, therefore ensuring the legitimacy of orders and reducing the chances of fraudulent orders. This helps businesses to avoid considerable losses which are otherwise incurred with traditional food ordering.
Convenience is one of the key factors in the dining sector. High convenience is essential not only for customers but also for dining staff, as it enables them to achieve efficiency and remain productive.
However, it is commonly known that the process of ordering food traditionally is far from convenient. The customers have to manually call the dining outlets and discuss their orders, and the restaurants have to hire staff to dedicatedly manage delivery orders.
Utilizing digital technology is a billion-dollar idea in this aspect, as the concept of technology is considered synonymous with convenience and efficiency in 2022. To explain, digital technology enables customers to place their orders with ease. All they need to do is click a few buttons, and their order is automatically placed.
This is convenient for the restaurants as well, as they do not have to keep a manual track of delivery orders manually. All of this significantly contributes to enhanced operational efficiency and makes food delivery more convenient for both parties involved.
Real-time Order Tracking
Tracking orders is one of the most important aspects of ordering food online. However, it is commonly known that in traditional food ordering, the scope of order tracking is low to none, making it challenging for diners to determine the time their order will take to be delivered.
Online food delivery, on the other hand, is known to facilitate seamless and real-time order tracking. After placing their orders, customers can not only monitor their orders continuously but also get an estimated delivery time.
Moreover, some restaurant businesses have made it their USP to facilitate seamless order tracking through their digital platforms and have witnessed tremendous market success because of it.
Certain food delivery platforms also provide details on the order’s processing, from its preparation to handling, and designated delivery personnel’s details, further adding to enhanced customer experience and making delivering food a seamless and hassle-free process.
Analytics form an integral part of business planning and are often the foundation of every business strategy. Moreover, these analytics also help businesses understand the success of their previous strategies and helps them to determine what exactly they need to change in order to increase their revenue.
The dining section is no exception in this matter, as restaurant businesses heavily rely on analytics to determine their course of operations. However, these analytics are often limited to restaurant dining, as the information available on food delivery orders is highly limited in traditional dining. On the contrary, online food delivery is known to provide top-notch analytics and offers detailed customer information.
For example, businesses using food delivery platforms can get analytics based on the customer’s location, age, dietary preferences, etc. Moreover, they can also track other useful information like most popular menu items, least selling items, best selling times of the day, days with the highest demand, and plan business strategies accordingly. Altogether, this information serves as a rigid foundation for efficient and future-proof strategic planning.
It is commonly known that the dining sector suffers from tremendous market competition, which is only increasing every passing day. In this scenario, businesses need to integrate innovative practices in order to survive the competition and maintain their market position.
One way to achieve this objective is to use online food delivery systems. Despite the vast scope of digital technology in the dining sector, many restaurant businesses are still operating traditionally in 2022.
Therefore, by utilizing digital technology for online food ordering, you can offer a unique experience to your diners, boost your sales, and gain a competitive advantage. Today, many restaurants have merged their online food delivery systems with restaurant dining technologies and use a common platform that facilitates both of these needs.
In simple terms, this means creating websites and applications that offer online ordering as well as restaurant ordering (wherever the diners are) through a common menu for a seamless dining experience. The diners can choose from either of these options and dine conveniently as per their preferences. This feature is certain to attract more customers and boost your business’s revenue.
Earlier, we discussed how placing food delivery orders conventionally is inconvenient for diners, as the process is often lengthy and prone to human errors. Such ordering experiences do not fit with what is considered an ‘ideal dining experience’, and often contribute to a compromised dining experience on the consumer’s part.
Utilizing online food delivery systems is an excellent idea in this case, as the concept of online food delivery is essentially based on seamless and hassle-free food ordering. All that users need to do is go through a one-time onboarding process and enter their details, like delivery addresses, payment information (credit card and debit card information), and basic personal information.
Once onboarded, the diners can use the same information and place their orders with just a few taps and clicks. Moreover, numerous food delivery platforms take ease of delivery to the next level with their high-end features like voice search and search filters (based on options like reviews, delivery distance, dietary preferences, the average price per head, etc.).
Increased Digital Visibility
When it comes to promoting a business and increasing its awareness, nothing beats digital marketing and its strategies. However, for digital marketing to be truly effective, the business that is being marketed must have a digital presence in one way or the other.
This is where most of the dining businesses lag in. While many restaurant businesses implement digital marketing strategies, very few succeed due to the limited digital presence of the business. However, this is not the case for restaurants working with online delivery systems.
To elaborate, restaurants that develop a digital platform for delivery benefit from tremendous online visibility. The buyers can search for the name of the restaurant and get complete information on it, from the menu to reservation details and online ordering options.
This is challenging with traditional operations, where customers have to call the restaurants to get similar information. As a result, creating an online delivery platform not only helps restaurant businesses facilitate seamless online delivery but also enables easy marketing and promotion to the target customers.
As we mentioned earlier, traditional food delivery holds significantly less contribution towards the restaurant’s total revenue. However, businesses can increase this contribution to a great extent by digitalizing their food delivery and integrating online food delivery systems.
To explain, online food delivery systems are easy to use, take less time, and are overall excellent for uplifting the diner’s ordering experience. Moreover, when ordering food from a delivery platform, users get more time to go through the menu card and decide on their order carefully.
In addition, food delivery systems also enable restaurants to spread awareness about their promotional offers and discounts to the diners availing delivery. This aspect is often missing in traditional food delivery, where the restaurants promote their offers only to the customers dining on their premises.
All of this encourages more people to order food online from their favorite restaurant, especially at times when they are simply unable to visit the restaurant in person. This, in turn, contributes to higher sales for the restaurants as well as increased profit.
This was it for the benefit of investing in an online food delivery platform. We are sure that by now, you are certain about why it is an excellent idea for your restaurant business to create an online delivery platform.
However, let us tell you that there are different types of online delivery platforms, and the type of platform that will be suitable for your business highly depends upon your business’s individual requirements and needs. In the next section, we will discuss the different types of online food delivery platforms.
Types of Food Delivery Platforms
Dedicated Food Delivery Platform
These are the type of platforms that restaurants make especially for their own business. Dedicated food delivery platforms provide the information, ordering service, and details of only one restaurant or a food chain.
This type of platform is highly popular among high-end dining establishments and brands, which are commonly known by their brand name. However, let us tell you that even startup restaurants have started to build their own food delivery platforms in recent times, owing to the vast benefits of this approach.
Here are some pros and cons of developing a dedicated food delivery platform.
- Competition-free selling
- High scope of marketing and promotion
- In-depth analytics
- High business control
- Has a high investment requirement
- Need time to develop
- Idea failure can lead to tremendous business loss
Food Delivery Marketplace
The food delivery marketplace is a platform where numerous restaurants and other dining outlets are enlisted on a single platform with their menus and pricing. These are one of the most popular types of food delivery platform among customers, as it eliminates the need to visit each outlet’s individual platform for ordering food.
With food delivery marketplace platforms, buyers can easily and conveniently place their food orders with the restaurants of their choice and have a seamless food ordering experience. These platforms give users the option to search for dining outlets, items of their choice, dietary options, and a lot more, and are a one-stop solution for online food delivery.
All that restaurants need to do is enlist their outlet on such platforms, and they are good to go. The user’s orders are then communicated either directly with the restaurant or via an intermediary system that these marketplace platforms utilize.
This food aggregator concept is also a great business idea, as many people are aware of the potential of these platforms and are investing in making restaurant marketplace platforms. Let’s take a look at the benefits and drawbacks of these platforms in the upcoming section.
- Less financial investment
- Almost no time-to-market
- Increased market reach
- No cost of marketing
- High competition
- Limited analytics
- Less control over strategies
- Loss of revenue due to platform’s commission
We hope that by now, you are clear on the different types of food delivery service platforms. Regardless of the approach that you choose, you should know that both of these food delivery models require a platform to work on.
This is where we come to the billion-dollar question of whether to build a food delivery website or a mobile application. Let’s find the answer to this question in the upcoming section.
Website vs Mobile App for Food Delivery
Food Delivery Websites
Food delivery websites are highly popular among startup restaurants and newly established businesses that do not have a solid brand image. These websites enable users to order food from their mobile phones as well as desktops and are highly user-friendly.
It is worth knowing that while food delivery websites are commonly used for the dedicated platform model, it cannot be denied that their implementation is also prominently visible in the food delivery marketplace model.
Nevertheless, if you are planning to build a food delivery website, you must know that the best way to do so is to outsource web development to an agency. While you can also build your website yourself or hire a development team, these approaches are not recommended for a restaurant business where technology is not the center of operations.
Food Delivery Mobile Apps
The market for food delivery mobile applications stood at USD 6,752.32 million in 2020. These figures are only expected to rise in the coming years, owing to the increasing demand for food delivery services and the high user-friendliness of mobile applications, which make them an excellent platform for the food delivery business.
While most of the food delivery application market is dominated by food aggregators and established food chains (like Domino’s and McDonald’s), there is a considerable number of standalone restaurants in the market. This only goes to prove the tremendous scope that food delivery businesses have in the mobile app market.
It is worth noting that when planning to build a mobile application, you will have to choose between the native and cross-platform development approaches. While the native approach enables businesses to launch high-performing apps with seamless UX and high functionality, cross-platform apps win in terms of cost-efficiency and time-to-market.
Therefore, you need to choose the approach that fits your needs and is in alignment with your business objectives and market paradigms.
You would have realized by now that both of the platforms, i.e., website and mobile application have their own significance in the food delivery market. As a result, it is challenging for a business to choose one over the other since developing both of these platforms is in the best business interest.
In this case, restaurants are worried about the high time and cost investment that they will have to incur in developing both of these platforms. However, let us tell you that this is not always the case, and you can get fast-performing web and mobile apps at the cost of one.
This approach is known as hybrid development and is based on creating a single codebase for all the platforms (web app and mobile app). While you might initially compromise on the functionality and UX of the platform, this approach will enable you to target maximum users and rapidly create a subtle market presence.
We are sure that by now, you are aware of the potential and scope of online food delivery and the factors that make it better than its traditional counterpart.
Online food delivery is becoming a popular trend among diners and is changing the way in which restaurants operate for good. This tech-based concept is highly efficient and convenient and provides a great alternative to obsolete traditional delivery methods.
All you need to do is determine the right model and platform for your restaurant, and you are certain to take your restaurant business to the next level of tech-driven success in no time.