That is the next biggest existential question plaguing the restaurant operators these days. The food delivery market is expected to grow to $12.5 billion by 2019 and the number of players in this space just seems to keep growing.
Some of the operators we work with already have 20-25% of their revenue being generated through 3rd party delivery services. And we expect this number to only grow as this industry continues to become more efficient in their logistics, thus bringing down the cost of food delivery.
We are literally in this space and even though we are integrated with 22 online ordering platforms, we keep learning about new ones everyday! So many choices! So many platforms available. So, what should the operators do? Should they choose one and just stick with them? This will definitely give them better rates with that specific service provider as they value exclusivity, but what about the revenue they are going to lose out by not being available on the other platforms?
On the other hand, if they go with all the platforms, it is a dual nightmare – both from an operational perspective of having to manage so many tablets and from an accounting perspective. It will definitely help their revenue, but at what cost?
Before answering this, I want to preface it by clarifying about our pricing structure, so it does not come across as self-serving. Checkmate integrates all these online ordering platforms into the restaurant POS software for a flat monthly fee. We charge $69 per month, per location for up to 2 services, and $89 for unlimited delivery services. So, if a restaurant operator has chosen to accept 3 or 30 of them, we do not get additional monthly revenue. We do charge a one-time flat fee of $69 per delivery service to set it up, but that is purely at cost to us.
Ok, back to the existential question. This is such a cliché but rings truer now more than ever. You have to be present where your customers are and given the size and scale of these 3rd party online ordering platforms, the customers are now more loyal to these platforms than to any particular brand. So, our recommendation is if you can solve the operational and accounting platforms, and if you are not losing money on a per transaction basis, then you should be present on all the platforms.
However, what we also strongly recommend is if a restaurant operator is present on all of these 3rd party delivery services, they should also accept online orders on their own website. There are many services that provide such a service for a very nominal price. This will enable your most loyal customers to order directly from your own site, and result in relevant savings in terms of commissions paid. So, the 3rd party online ordering platform should be complemented by having online ordering on your own site, as well.
But again, if we come back to our evaluation of one vs. many, we realize the pitfalls of having multiple solutions. It becomes unmanageable from an operational and accounting perspective. The solution is if you are accepting multiple online ordering platforms, you should definitely have them integrated into the core of your operations. Having them integrated to your POS Software solves your operational, as well as your accounting / reconciliation problems.
We can certainly help with such an integration but there is a lot the operators can also do to ensure such an integration actually works. Our primary task is translation of menus from the various 3rd party and online ordering platforms to the menu and language the POS understands. The menus form the primary link for a successful integration, so we work very closely with our clients to make sure their menu is at least translatable to the POS language, and that they do not have the menu up for a Mexican restaurant while serving Thai food to their in-store guests!
What Checkmate does is a translation job, where we can think of each different online ordering platforms as a different language. They all have to be translated into the language of the POS so there needs to be some semblance of similarity and syntax / grammatical accuracy for us to be able to translate it. Some of the common mistakes we correct while integrating are:
Structural inconsistency: Most common example is for one location, on GrubHub, the layout is – Burrito as an item, and the various protein options as modifiers. But for the same location, on UberEats menu, each of the Burritos would be laid out as separate items, such as Chicken Burrito, Veggie Burrito, Pork Burrito, etc. We can certainly translate from any of these structures to the POS structure, but over time, it becomes difficult to manage for the operator.
Updated menus: One of the reasons why managing these 3rd party orders are such a problem operationally is because orders are received for items that the restaurants don’t even carry anymore. They then have to call the customer in the middle of their lunch rush, which basically ruins their entire day. I understand it is a pain to keep all the menus updated but it should be incorporated into the Standard Operating Procedure for restaurants if they want to enable smooth operations, especially if it is already contributing to 20-25% of your revenue.
Limited menu: Please do not offer everything you have in-store to the online customers! Be selective and choose from items that you know will do well, will travel well and the customers will enjoy even after it has traveled for some time. Also remember that these customers are now primarily ordering food on their mobile so keep it simple.
Pricing: Solving for accounting issues is not really that big of a problem. The primary aspect that needs to be taken care of is to make sure that the prices of all items and modifiers in the 3rd party menus match up to the POS pricing. If a different pricing is offered on 3rd party menus, operators should create a different menu in the POS with which the 3rd party menus can be associated.
And lastly, modifiers: The devil is in the details! Usually operators will get all their items right but it’s the case of the missing modifiers. That’s where they should ensure that all their modifiers present in the 3rd party menus are present in their POS. Remember, the objective is to have everything print out directly to the kitchen printer as if it was entered for a walk-in customer. Pay special attention to required modifier groups, eg. If you have set them up as a required modifier group in your POS, make sure to set them up as a required modifier group in your 3rd party menus. You should also pay attention to default modifiers as they make your operations very smooth.
To summarize: operators of all sizes – from a thousand locations to the single location operators, are facing the same problem. Should we accept these 3rd party services and if yes, one or all? Our recommendation is yes you should, and you should accept all of them as long as you can have them integrated into the core of your operations. The idea is to make sure that every single receipt prints out directly in the kitchen printer in the same exact format as if it was entered directly by the in-store staff.
How we work with the operators is we have realized the operators almost always have capacity in the kitchen to accept more orders. They are actually just bottlenecked at the front of house by not having the capacity to enter all these orders manually in the POS. By removing that bottleneck and sending all the orders directly to the kitchen, we are able to help the restaurants grow their revenue without increasing their operational costs to manage these services. Every ticket prints out in the same exact format and the orders go in with their unique Tender type & Destination. This also allows the operators to run all the reports such as labor report, product mix, hourly report, revenue by source and many others directly in Brink itself.
This is also an ideal solution for franchisors to ensure they can grow their royalties by plugging in these 3rd party sources directly into the POS systems.
Let us know if we can help in any way, even if it is just to brainstorm. Happy to discuss and further help solve this problem. You can always email me at firstname.lastname@example.org or call me at 646.660.1349.