Branded Foodservice Locations Should use First Party Online Ordering Platforms

 

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® believes that there are several reasons why branded food outlets should consider using first-party online ordering platforms over third-party services:

·         Higher Profit Margins: Third-party delivery platforms typically charge commissions on each order, which can eat into a restaurant's profits. With a first-party platform, the restaurant keeps all the revenue.

·         Customer Data Ownership: When customers order through a third-party app, the restaurant doesn't get access to their contact information. This makes it difficult to build relationships with customers and run targeted marketing campaigns. With a first-party platform, the restaurant collects customer data directly, which they can use to personalize the ordering experience and loyalty programs.

·         Control Over the Brand Experience: Third-party platforms have limited customization options, and the overall experience might not reflect the restaurant's brand identity. With a first-party platform, restaurants can design the ordering experience to match their brand and offer features that are specific to their business.

·         Building Direct Customer Relationships: By encouraging customers to order directly, restaurants can build stronger relationships with them. This can lead to increased customer loyalty and repeat business.

Of course, there are also some challenges associated with using first-party platforms. These include the cost of developing and maintaining the platform, as well as the need to market it to customers and encourage them to switch from third-party apps. However, for many branded food outlets, the potential benefits outweigh the drawbacks. Now consider this:

Paytronix, recently published the 2024 Paytronix Online Ordering Report which found that guests transacting directly with a brand order 35% more items per check compared to those who order via third-party marketplaces. Online ordering represented 27% of all orders for restaurants and convenience stores in 2023, and operators in the top 25% of online ordering volume saw online orders jump to 62% of all their orders last year.

“The biggest takeaway is that while third party marketplaces have their uses, a first-party online ordering platform is key to a brand’s online ordering success,” said Tim Ridgely, Vice President of online ordering at Paytronix. ”Moreover, those brands that build a robust digital guest engagement platform that includes loyalty and a mobile app are better equipped to leverage modern AI tools, get closer to their guests, and deliver a powerful omnichannel guest experience.”

The 2024 Paytronix Online Ordering Report outlines how to optimize all of the systems and operations integral to a fully integrated guest engagement platform, with clear steps on how to:

·         Convert guests from third-party marketplaces to a first-party online ordering system

·         Consolidate technology for efficiency and better guest engagement

·         Use artificial intelligence to increase guest engagement

·         Leverage customer data for a personalized experience

The Paytronix report also celebrates the introduction of artificial intelligence (AI) tools and their advanced personalization capabilities, which make off-premises experiences feel as engaging as in-person ones. The report outlines how successful brands are leveraging AI to segment guest data, create personalized marketing campaigns, build rewards, and optimize menus to the needs of their customers. Operators are using these platforms to boost order frequency, anticipate future needs, and increase customer lifetime value.

Additional findings from the Online Ordering Report include:

·         Guests who order both in-store and online have the highest order frequency, the best retention, and 35% more lifetime value than customers who only order in-store.

·         First-party ordering platforms are the preferred method for consumers during lunch and dinner, and they also spend 30% more per transaction. However late-night orders (any time after 8pm) are nearly one third more likely to be done using third party marketplace apps.

·         Mobile apps generate 34% of digital orders, and mobile app users have a 45% higher CLV than web users.

·         Quick Service Restaurant (QSR) loyalty members place 38.4% of their orders online, while Full-Service Restaurant (FSR) counterparts order online 30.2% of the time.

·         Loyalty program members also shine when it comes to frequency, visiting their favorite establishments over 40% more often than non-members.

The Paytronix Online Ordering Report provides trends and actionable insights from Paytronix online ordering experts. It’s designed so restaurant and convenience store marketers, as well as operations and technology leaders, can benchmark online ordering tools and strategies and devise improvements to deliver breakthrough performance.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869