From Brick-and-Mortar to Doorstep: The Impact of Third-Party Delivery on Merchant Marketing

In today’s fast-paced world, convenience is king. Consumers want everything at their fingertips, and that includes their favorite meals from their favorite restaurants. Enter third-party delivery services, which have revolutionized the food industry by bringing meals from brick-and-mortar establishments to consumers’ doorsteps.

But what impact does this have on merchant marketing? In this article, we’ll explore how third-party delivery services are changing the way restaurants and other merchants market their products and services.

From the rise of virtual kitchens to the importance of online reviews, we’ll delve into the key strategies that merchants must adopt to stay competitive in the ever-evolving world of delivery. So whether you’re a restaurant owner or a marketing professional, buckle up and get ready to learn how to navigate the challenges and opportunities of third-party delivery.

The Growth of Third-Party Delivery Services

Third-party delivery services have grown exponentially in recent years. According to a report from Second Measure, a data analytics platform, the total sales of the top four delivery services (Grubhub, DoorDash, Uber Eats, and Postmates) grew by 55% year-over-year in the second quarter of 2019. This growth is expected to continue, with the global food delivery market projected to reach $200 billion by 2025.

This growth can be attributed to several factors. First, consumers are increasingly looking for convenience, and third-party delivery services provide just that. With a few taps on their phone, consumers can order food from their favorite restaurants and have it delivered to their doorstep. Second, the rise of virtual kitchens (also known as ghost kitchens or cloud kitchens) has made it easier for restaurants to offer delivery without the need for a physical storefront. Finally, the COVID-19 pandemic has accelerated the adoption of delivery services, as more consumers are staying home and ordering food online.

Despite the benefits of third-party delivery services, there are also challenges for merchants to consider. These include high commission fees (which can range from 15% to 30% of the order total), loss of control over the delivery process, and potential damage to the brand’s reputation if the delivery experience is poor.

Benefits and Challenges of Third-Party Delivery for Merchants

Despite the challenges, there are also several benefits to using third-party delivery services. For one, they allow restaurants and other merchants to reach a wider audience. By partnering with delivery services, they can tap into a customer base that they may not have been able to reach otherwise. Additionally, delivery services can provide valuable data and insights into customer behavior, such as popular menu items and peak ordering times.

However, there are also several challenges to consider. As mentioned earlier, commission fees can be high, which can eat into profit margins. Additionally, merchants may have less control over the delivery process, which can lead to issues with order accuracy and delivery times. Finally, there is the potential for damage to the brand’s reputation if the delivery experience is poor, which can lead to negative reviews and loss of customers.

Impact of Third-Party Delivery on Merchant Marketing

The rise of third-party delivery services has had a significant impact on merchant marketing. For one, it has made online reviews more important than ever. With more consumers relying on delivery services to order food, they are also relying on online reviews to inform their decisions. This means that merchants must prioritize their online reputation management to ensure that they are receiving positive reviews on platforms like Yelp and Google.

Additionally, the rise of virtual kitchens has led to an increase in competition on delivery platforms. With more restaurants offering delivery-only options, it can be harder for merchants to stand out. This means that they must adopt new marketing strategies to differentiate themselves from the competition.

Finally, the commission fees associated with third-party delivery services can make it harder for merchants to invest in other marketing channels. This means that they must be strategic about how they allocate their marketing budget to ensure that they are getting the best return on investment.

Strategies for Merchants to Optimize Their Marketing on Third-Party Delivery Platforms

To stay competitive on third-party delivery platforms, merchants must adopt new marketing strategies. Here are some key strategies to consider:

1. Optimize Your Menu for Delivery
   When creating a menu for delivery, it’s important to consider how the food will hold up during transit. Items that are prone to getting soggy or cold may not be the best choice for delivery. Additionally, consider offering smaller portions or combo meals to make ordering easier for customers.
2. Leverage Your Online Reputation
   As mentioned earlier, online reviews are more important than ever. Make sure that you are monitoring your reviews on platforms like Yelp and Google, and responding to any negative feedback in a timely and professional manner. Additionally, consider offering incentives for customers to leave positive reviews, such as a discount on their next order.
3. Offer Exclusive Deals and Promotions
   To stand out from the competition, consider offering exclusive deals and promotions to customers who order through the delivery platform. This can help to incentivize customers to choose your restaurant over others.
4. Use Data to Inform Your Marketing Strategy
   Delivery platforms can provide valuable data and insights into customer behavior. Use this data to inform your marketing strategy, such as by offering promotions during peak ordering times or creating targeted ads based on customer demographics.

Best Practices for Merchant Marketing on Third-Party Delivery Platforms

In addition to the strategies listed above, there are several best practices to consider when marketing on third-party delivery platforms:

1. Use High-Quality Images and Descriptions
   Make sure that your menu items are accompanied by high-quality images and accurate descriptions. This can help to entice customers and ensure that they know what they are ordering.
2. Keep Your Menu Up-to-Date
   Make sure that your menu is up-to-date and accurate. This can help to avoid issues with order accuracy and ensure that customers receive the right items.
3. Communicate Clearly with Customers
   Make sure that you are communicating clearly with customers throughout the ordering and delivery process. This can help to avoid confusion and ensure a positive customer experience.
4. Provide Excellent Customer Service
   Finally, provide excellent customer service throughout the delivery process. This includes timely updates on the status of the order, responding to customer inquiries in a timely manner, and resolving any issues that arise.

Case Studies of Successful Merchant Marketing on Third-Party Delivery Platforms

To illustrate the strategies and best practices outlined above, let’s take a look at some case studies of successful merchant marketing on third-party delivery platforms:

1. Sweetgreen
   Sweetgreen, a fast-casual salad chain, has seen success on third-party delivery platforms by offering exclusive promotions to customers who order through the platform. For example, they recently offered a free delivery promotion for customers who ordered through Uber Eats. Additionally, they have optimized their menu for delivery by offering smaller portion sizes and creating combo meals.
2. Chipotle
   Chipotle has seen success on third-party delivery platforms by prioritizing their online reputation management. They have a dedicated team that monitors their reviews on platforms like Yelp and Google, and responds to any negative feedback in a timely and professional manner. Additionally, they offer incentives for customers to leave positive reviews, such as a chance to win free burritos.
3. Pizza Hut
   Pizza Hut has seen success on third-party delivery platforms by leveraging data to inform their marketing strategy. They use data from delivery platforms to inform their promotions and pricing strategy, such as by offering discounts during peak ordering times. Additionally, they use targeted ads on social media to reach customers in specific demographics.

Future of Third-Party Delivery and Its Impact on Merchant Marketing

As third-party delivery services continue to grow, their impact on merchant marketing is only going to increase. Merchants must stay up-to-date on the latest trends and strategies to stay competitive in this ever-evolving landscape. Additionally, as virtual kitchens become more common, merchants may need to consider new marketing strategies to differentiate themselves from the competition.

Conclusion and Key Takeaways

In conclusion, third-party delivery services have had a significant impact on merchant marketing. While there are challenges to consider, there are also several benefits to using these platforms. Merchants must adopt new marketing strategies to stay competitive, such as optimizing their menu for delivery, leveraging their online reputation, and offering exclusive deals and promotions. Additionally, they must follow best practices such as using high-quality images and descriptions, keeping their menu up-to-date, communicating clearly with customers, and providing excellent customer service. With the right strategies in place, merchants can thrive in the world of third-party delivery and continue to grow their business.

Other articles of reference
How Third Party Delivery Services are Changing the Pizza Industry

Using Technology to Solve Restaurant Challenges

EZ-Chow has solutions such as Online Ordering and Self-Ordering Kiosks that integrate into your existing POS systems. To learn how EZ-Chow can help you with these initiatives, and more, get started by contacting us here.

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