Third-party delivery woes disappear, food quality rises with order-ahead pick-up.
July 11, 2019
Sponsored by Curbside
Meal delivery is one of the hottest trends in the restaurant business. Delivery transactions are rising at chains long accustomed to the service, and third-party delivery companies are rushing in to move food for restaurants lacking the infrastructure to provide that convenience. It seems a win-win in a day when customers increasingly want to consume restaurant meals at places where they live, relax or work.
But the promise of delivery — third party, especially — presents its own unique challenges. For example:
It’s pricey: One can either field a dedicated delivery team, which requires additional staff, a vehicle strategy (owned or hired), and costly driver insurance. Otherwise, restaurants have to rely on 3rd party aggregators. Slim to No Operator Profits: for many, third-party aggregator delivery services take 20 and 40 percent of each transaction, which gobbles up significant margin. Customers also pay an added delivery charge.
Food Quality: Food quality typically suffers when in the hands of a third-party provider. Non-dedicated delivery services can be slow to pick up orders from restaurants and slow to deliver them. Customer complaints of long waits and off-temperature food are common.
Jaron Waldman, co-founder and CEO at Rakuten Ready, shares how delivery aggregators are providing convenience, but not satisfying experiences, for many.
“The overall experience is often poor, with boxes and bags frequently leaking, and orders often being incorrect,” says Waldman. Rakuten Ready is an e-commerce solution with predictive arrival technology. “It definitely wasn’t the quality you get at a restaurant, but with little time to cook, work, and [take care of] kids, delivery was an experience we just settled for.”
Like many customers, he eventually solved the problem by ceasing delivery, and instead ordering ahead online and picking up the food himself. The food quality, Waldman found, was always better. Still, he sometimes found himself waiting for the order to be completed after he arrived.
“That’s still a problem at many places — wait times are too long,” Waldman says. “People are time-starved, so when they take the time to pick up their food, they shouldn’t have to wait for it.”
The Amazon effect
According to recent research by Greenberg Strategy, an Emeryville, Calif., market research firm, consumers view Amazon’s online shopping as not just incredibly easy, but also fast, delivering most purchases in two days or less. As a result, Americans have become trained to expect swift and easy service with such purchases — including restaurant meals.
That an online ordering platform is the fulcrum on which that relationship is balanced was essential to Rakuten Ready’s creation of the predictive arrival technology, which merchants can easily plug in to their app, Waldman says. When a customer places an order using a restaurant’s mobile ordering app, ARRIVE gauges how long it will take the customer to get to the restaurant and then advises the staff via a dashboard to fire the order at a specific time.
Ideally, the customer arrives exactly when an order is ready. If the restaurant’s staff having customers enter the restaurant to pick up their orders at the counter brings the orders to customers’ cars, ARRIVE tells them where on the lot those cars are located. Additional use cases include, and some QSR and fast-casual restaurants are implementing, drive-thru lanes that are specifically dedicated to order ahead and pickup.
“This way, the food is at peak freshness,” he says. “Their orders are ready to go. Customers aren’t waiting.”
By informing customers how long an order will take to prepare, ARRIVE also enables customers to be in greater control, as they can see how long an order will take and can decide whether that suits their desired timing; if it takes too long, they can cancel their order.
Takeout for today’s mobile-first consumer
Restaurants have had takeout forever, but today’s customer prefers not to call, and prefers to see all menu options and customizations available, which is why mobile ordering ahead is growing.
In restaurants, mobile ordering ahead and pickup not only relieves customers’ wait woes, it removes the fee paid for a delivered order. Operators also get to avoid margin-eating fees charged by delivery services and regain control of the customer experience at the restaurant.
Greenberg researchers asked restaurant customers why they preferred ordering online and picking up over delivery. They found five significant reasons:
48 percent wanted their food to be ready when they arrived.
37 percent wanted to avoid waiting in line.
30 percent said it was faster than having their meal delivered.
26 percent said it allowed them to avoid a delivery fee.
25 percent said it was easier to pay online than in person.
“Predictive arrival technology addresses the big pain points around delivery,” Waldman says. “It’s a solution that works as well for the customer as it does for the operator.”
Let Rakuten Ready enhance each customer experience
In an on-demand world, every minute counts, and the Rakuten Ready platform is built to deliver great experiences that reward customers with time back. Our predictive arrival technology makes order ahead and pickup work seamlessly every time, dramatically improving the convenience of food pickup.
Find out how RakutenReady.com can help you connect with your mobile-first patrons at the exact moment they need you most.
