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Pros and Cons of On-Demand Delivery Services

As a restaurant owner, looking for ways to increase your business is likely on your mind. One of the newer trends is to offer an on-demand delivery service, but is that a good fit for your business? If so, you will also need to consider whether you want to take on this task yourself or hire a third party to support the idea.
March 3, 2020 | Retail
By: Aaron S.
Aaron joined Acuity in 2017 as our Retail Specialist—bringing with him almost 30 years of experience in a broad range of retail. He started his career stocking shelves in the seasonal department at a local retailer. A few years later, Aaron transitioned to a gas station/convenience store, where he worked second shift while getting his degree in organizational communications from the University of Wisconsin-Eau Claire. It was during this time he made the move to the loss prevention and safety aspect of retail. Over the next 25 years, he worked in various retail segments, including video games, cosmetics/skincare, hardware/appliances, pharmacy/grocery, and clothing. Aaron held several positions during this time, including District Loss Prevention Manager, Regional Loss Prevention Manager, Regional Compliance Auditor, and National Manager of Loss Prevention and Operations. Outside work, Aaron likes to spend time with his wife (who has also worked in retail for over 20 years) and their twin teenage boys. They enjoy being outdoors on the water, fishing, and camping. As the Retail Specialist, Aaron’s goal is to enhance the partnership between retailers and Acuity by showing retailers that an insurance company can be a supportive resource and that Acuity truly understands their industry.

As a restaurant owner, looking for ways to increase your business is likely on your mind. One of the newer trends is to offer an on-demand delivery service, but is that a good fit for your business? If so, you will also need to consider whether you want to take on this task yourself or hire a third party to support the idea. Listed below are some pros and cons to consider before making those decisions.

 

Pros

Larger customer reach. By offering a delivery service, your business can reach people who don’t normally eat out or have never been to your restaurant. People love convenience and offering a delivery option means customers have more choices to get what they want, when they want it, and how they want it. Your restaurant can become a customer’s solution to an easy dinner after a long day.

 

Lower overhead. If your delivery business is successful, you will be able to increase your sales without needing to increase your restaurant’s physical size. In some cases, businesses that are very successful with delivery service end up downsizing their building, saving rental costs without interrupting their profits.

 

Increased meal size (larger orders). Customers who order a home-delivered meal often order more than they would at a restaurant. In fact, according to a recent restaurant status report, restaurants see as much as a 20% increase in order size when a customer makes the purchase online or through a delivery service.    

 

Cons

Loss of control with quality. By offering a delivery service, you run the risk of outside forces impacting your customer experience. For example, if traffic is bad or the delivery driver gets lost, the delay could potentially impact the quality of the food. It's also important to remember that not all foods handle travel well, so you may want to be selective in what you offer for delivery. If you choose to use a third-party delivery service, the delivery person will not be your employee, but will be the person responsible for interacting with the customer on your behalf. The overall customer experience is still important, even with in-home delivery.

 

Reduced profits. Having to pay a third party for delivery service or even operating the delivery process in house will come at a cost. In addition, you may see a reduction in in-person sales at your restaurant. Many customers who choose to order delivery will be existing regular customers.    

 

Loss of the customer dine-out experience. Eating out is not just about the food. Customers like places that are special, have a view, or have great atmosphere. If your in-person experience is what makes your restaurant special, be aware that the delivery experience will never be the same.  

By: Aaron S.
Aaron joined Acuity in 2017 as our Retail Specialist—bringing with him almost 30 years of experience in a broad range of retail. He started his career stocking shelves in the seasonal department at a local retailer. A few years later, Aaron transitioned to a gas station/convenience store, where he worked second shift while getting his degree in organizational communications from the University of Wisconsin-Eau Claire. It was during this time he made the move to the loss prevention and safety aspect of retail. Over the next 25 years, he worked in various retail segments, including video games, cosmetics/skincare, hardware/appliances, pharmacy/grocery, and clothing. Aaron held several positions during this time, including District Loss Prevention Manager, Regional Loss Prevention Manager, Regional Compliance Auditor, and National Manager of Loss Prevention and Operations. Outside work, Aaron likes to spend time with his wife (who has also worked in retail for over 20 years) and their twin teenage boys. They enjoy being outdoors on the water, fishing, and camping. As the Retail Specialist, Aaron’s goal is to enhance the partnership between retailers and Acuity by showing retailers that an insurance company can be a supportive resource and that Acuity truly understands their industry.