Should you use a third party delivery service or keep it in-house?

Sep 04, 2020

Should you use a third party delivery service or keep it in-house?

The first big decision you’ll have to make when implementing a new takeout and delivery program is whether to keep everything in-house or work with an established third-party service that handles the customer interactions and logistics.

According to the latest data, customers seem to prefer ordering directly from restaurants:

  • In 2019, 91% of consumers had placed an order via a restaurant’s app or website, while 60% had used a third-party delivery service at least once1
  • After an initial surge of folks trying out third-party apps, more people are switching back to ordering directly from restaurants2

Third-Party Apps vs Do It Yourself

Third-Party AppsDo It Yourself
Quickest and easiest way to get set up with a delivery and takeout option, since these apps offer “out of the box” implementation.74% of consumers say they prefer to order directly from the restaurant.2
Apps are built to make ordering easy for the consumer, which is appealing to a lot of people. They track order location, save payment and past order information, and even allow customers to make repeat orders.You have control over the customer relationship and experience, so you can increase your brand loyalty.
Customers can find you via the apps, so you can increase your brand’s visibility and customer acquisition.You keep the revenues from each order instead of paying hefty commissions. There are some studies that show that maintaining an in-house delivery team is cheaper in the long run, though this depends on a lot of variables.3

DIY Options and Alternatives
The biggest benefit of keeping everything in-house is that you keep control of the customer relationship, of your data, of communication, and of how your brand is presented. Having this control enables you to market directly to your customers and may give you a better chance of retaining them.

But doing delivery yourself also means you have to take on a lot more of the logistics and organizing. So before you go full steam ahead with doing it yourself, think about whether or not you are able to take on the additional operational planning.

  1. Delivery or Takeout? Will you provide delivery to customers or just takeout/pickup options?
  2. Insurance. There’s a good chance you’ll have to purchase additional insurance to cover your drivers if you decide to do your own delivery. Check with your insurance agent.
  3. Who will deliver and how? Will drivers use their cars or a company vehicle? Will you limit the delivery radius? What about bike deliveries?
  4. Order tracking and payment process. You can go old-fashioned and just take orders by phone and have customers pay upon arrival, though most people will likely want to pay digitally. Fortunately, there are a lot of options for “online stores” that can facilitate transactions.

While you’re working through the above questions, also take a look at some of the tech options that might be able to help you. Many companies are providing alternatives to the third-party delivery apps that enable you to keep the off-premise programs in-house. They usually charge a monthly fee rather than commissions on sales with options for premium add-ons that cost a little extra. These companies offer options like:

  • Social media “order buttons” that integrate with platforms
  • “Order online” widgets that integrate with your website
  • Online databases that help customers discover you
  • Your own branded ordering app
  • Marketing ordering app
  • Marketing and promotions assistance
  • Online loyalty programs and coupons

Some of the companies that are offering DIY options are:

Check with your POS System provider or reservation system as well. Square, Toast, OpenTable and Tock are all pivoting during the COVID-19 pandemic to help provide new programs to help integrate online ordering quickly and easily.

Deciding on the Best Path for You
The decision is complex and there are many variations that can work for you and your business. Take the time to research options, but also integrate the different technologies gradually so you can test the pros and cons for yourself. You can even use all of them if you think that’s worth your time and effort to track them all. If you’d like to learn more about the different third-party delivery apps and their benefits, check out our other blog post - Delivery showdown: Comparing Third-Party Delivery Services - comparing the major players.

1 National Restaurant Association and Technomic Inc., Harnessing Technology to Drive Off-Premises Sales, 2019
2 Technomic, Inc., Takeout & Off-Premise Consumer Trend Report, 2018