The added

value of delivery
Why online ordering and delivery are
staples in the digital age of hospitality
2 3

Face the facts:

delivery is here to Contents

stay. Chapter 1
How delivery impacts hospitality
Most restaurant owners and chefs probably prefer that customers stop by, pull Explore the interaction of online ordering, delivery and food services.
up a chair and experience service in the traditional way – in dining rooms where
ambience is carefully crafted, and quality is assured on the spot. But even though Chapter 2
in-house dining continues to appeal to consumers, current growth in the food End-to-end cost breakdown
service sector is being driven by delivery. Think that delivery takes too much from the bottom line? Think again.

It’s a fact that delivery is transforming almost every aspect of running a restaurant. Chapter 3
As a result, failing to embrace delivery could very well mean the end of your food Third-party vs. in-house delivery
services business. But partnering up with a third-party delivery company doesn’t Is your own branded delivery team out of the question?
mean surrendering – it means profiting – as long as you take an informed approach.
Chapter 4
Getting started with delivery
Ensure the smoothest integration of delivery into your food
business operations.
In this e-book, you’ll learn more about the forces driving the transformation
of the food and hospitality business. We’ll also provide you with hard facts
on delivery service fees and help you identify the best way to incorporate
delivery into your restaurant operations.
4 5

Chapter 1
More meals go mobile

How delivery
A wide range of high-quality, healthy, nourishing meal options is available online,
leading to more competition between high-end restaurants, gourmet meal kit
companies and fast-casual dining options.

impacts hospitality Rethinking restaurant real estate

Restaurants no longer have to seek out high-traffic, high-priced areas to achieve
success, thanks to delivery. Competition between restaurants is now occurring
less in “real life” and more online.

It’s just so convenient – consumers are a few clicks away from delicious In-house dining is adapting to delivery
meals delivered to their doorsteps. Pioneered by Amazon two decades ago The physical layouts of restaurants are changing to make way for delivery, with
and now extending to a wide range of services and domains, rapid delivery is many choosing to cut back on dining space, boost kitchen capacity, hire delivery-
reshaping the way hospitality industries operate, market themselves and find focused personnel and renovate to include delivery-specific areas.
their footing in the increasingly complex food services landscape.
We covered the most extreme version of this setup – where no dining area or
storefront is provided – in our whitepaper on dark kitchens.

We’ve said it before in numerous customer cases and whitepapers and we’re “Fed-up” millennials and ultra-niche dining
expecting to keep saying it: online ordering and delivery offer significant cost, A reverse trend is being observed in which millennials, paralyzed by choice, are
profits and sales advantages to the food businesses that embrace it, primarily opting for dining solutions that limit choice and focus on extremely high quality
because it’s a lucrative additional sales channel. Here are a few things to expect. and seasonal dishes.

Millennials still appreciate dining in None of this means that you should pack up your restaurant, fire your staff
Although digital age consumers are ordering more food online, delivery isn’t and open a dark kitchen – or launch some other business entirely. When
replacing brick-and-mortar dining experiences. Morar HPI consultancy found in approached the right way, delivery can be a boon to your business. Yes, it
2018 that around 75% of people who had a positive delivery experience were likely comes at a price – but managed correctly, you can transform the price into
to eat at that restaurant in person. profit, loyalty, market reach and business longevity.
6 7

Chapter 2

The costs
of delivery
In April 2019, Adroit Market Research predicted that the global value of the food
Restaurants operate on thin margins – around 2% for restaurants and 6% for
delivery industry will reach USD 161.71 billion in 2023 and grow at a rate of 11.7%.
dark kitchens –, and some of them claim that the costs of delivery are just
You read that right. The time to enter the market is now – but it’s important to
too unsustainable for their businesses. If you’re worried as well, it’s important
carefully consider options and costs before leaping.
to consider the fact that there are a wide range of delivery fee structures out
there, and many different providers to choose from.
How third-party delivery works in a nutshell
Third-party meal delivery services like Takeaway.com, Deliveroo and UberEats
work with local networks of employees that they typically pay according to number
of deliveries made combined with a mileage fee. There are a number of different
fee structures that delivery companies use to charge their restaurant partners,
commonly a percentage commission per order.
8 9

to consumer:
a l cost EUR
Tot 25

€2

The effectiveness of this disruptive delivery business model lies in the power
of the company’s app, which consumers download and use to order from €3
restaurants partnered with the delivery company. This digital interface links
restaurants, delivery drivers/cyclists, e-commerce channels, hungry consumers
and location data in real time. The result is the smooth coordination required
for fast, cost-effective delivery.
For an order
Costs for consumers
To start off, let’s look at a fictional cost breakdown of a typical delivery order
worth EUR 20
fulfilled by a third-party delivery company.

This might sound like a high markup for most consumers, but millennials don’t
hesitate to pay for the convenience of restaurant-quality food delivered just
minutes after cooking. € 20

Food value
Delivery fee
Driver commission
Total cost to consumer
10 11

Costs for restaurants

To offset commissions charged by delivery companies, some restaurants Costs and returns of
increase prices of food ordered online vs. what they charge on premise. a physical restaurant
Restaurant chains can negotiate custom terms with delivery channels as 25% profit - 10% delivery costs =
well, making pricing a difficult thing to pin down. Channels may also charge 15% FINAL PROFIT
more when partner restaurants work with other competing channels and for
additional services like photography.

We’ve collected estimates (since these figures differ from contract to contract) 10%
on the restaurant costs of delivery charged by a handful of popular third-party 25% 25% 25%
10%
channels.
Physical
Physical restaurant
restaurant + delivery
Delivery company Area Commission (% of order value) Other fees
15%
channels 15%
US 20% marketing + 3.05% + USD 0.30 30% 25%
10% delivery
20%
Worldwide 20-30% GBP 2.50

USD 350-500 (one-time 15% + fee for small

Worldwide
fee) + 30% orders food
labor
rent
EU, UK 13% Undisclosed marketing & overhead
profit
USD 0.99 – 9.99
US 15-30% + undisclosed
service fee
12 13

Chapter 3

Third-party vs. Custom apps are expensive

It’s important to keep in mind that mobile apps cost thousands – even tens of thousands

in-house delivery
– of euros to develop, and to consider whether your customer base is large enough to
warrant yet another app taking up smartphone screen real estate. Would a customer
download your app, or prefer to rely on apps that aggregate the

offerings of multiple restaurants?

Third-party delivery companies offer tech expertise

If your business is a large franchise or very well-established restaurant, a custom app may
be a cost-effective choice. However, the top 10 delivery companies still have something
that most food businesses don’t: extensive data and network expertise.
Pizza has been making its way from parlors to your door for decades. Why
can’t your restaurant take the same approach? Naturally, it can – but with
Benefits of choosing third-party apps
some important caveats to keep in mind. In this chapter, we highlight some
of the reasons why the benefits of third-party delivery often outweigh the The technology is tried and tested.
costs.

Food delivery isn’t the new concept here – it’s the combination of real-time You don’t need to broaden your
data processing, GPS, high-speed internet and mobile technologies that competencies to cover logistics,
have transformed it into something disruptive. Is it more cost-effective to insurance and vehicle management.
harness this combination yourself with a proprietary app, or to pay third
party delivery firms to do it for you? There’s already a huge user base you can
benefit from.

Leave the technology to the techies and

focus on the food.
14 15

Step 1: invest in technology

Chapter 4 - Upgrade your POS platform and ensure that it’s ready to interact with
delivery channels.

Introducing
- Verify that your WiFi covers all areas where tablets will be used to receive
process orders (if applicable).

delivery channels
Step 2: create delivery-friendly spaces
- Remember, delivery couriers are your friends.
- Make it easy for motorists (and cyclists) to enter and exit your premises

into your business

without interrupting service or diner traffic.
- Designate an area for order pickup and organize orders carefully (by name
or pickup time, for instance).

model
- Have a staff member who serves as a point of contact for couriers in case
something comes up.

Step 3: select containers and packaging designed to travel

- Invest in high-quality (more expensive packaging).
Ensuring that delivery has a positive impact on your restaurant’s bottom line - Brand your packaging.
means taking a step-by-step approach to its introduction. Delivery means that - Think carefully about the qualities you want to preserve in your food:
new ways of working, new technologies and new operational mindsets will should certain elements be in separate containers?
take their places in your kitchen and dining room. - Make it easy for couriers to differentiate between orders and fit them
easily into their carrying bags: easy-stacking, transparent, flat options are
If you’re completely new to delivery, don’t panic – just take these considerations popular.
into account, read the fine print in the contract of your delivery channel partner,
and be open to some light renovations and IT investments. Step 4: hire a delivery expert
- They manage all aspects of order receipt and meal package preparation,
freeing up your kitchen and dining staff.
- Experts can prepare materials in advance to ensure that orders can be
fulfilled as quickly as possible.
- Offer dedicated support to delivery drivers and cyclists in communicating
and gathering orders.
16 17

Conclusion

Get started with Kicking off your Visit the channel’s website and

delivery – the right

relationship with register to become a restaurant
delivery channels partner

way Sign the partner agreement

Delivery and takeaway companies try to make it as easy as possible for

restaurants to get up and running. Each delivery company offers unique Get the technology
incentives and relies on different applications and business models, but
registration follows a similar path for all.

Schedule a meeting with your

account manager to set up your
menus

Receive orders
18 19

Simplify delivery channel management with Deliverect

Partnering with more than one delivery and takeout aggregator means working
with different apps, online ordering channels and technologies. If handling multiple
tablets in the kitchen and dealing with several account managers isn’t your idea
of a good time, we offer you a streamlined solution that keeps you in control and
simplifies VAT compliance.

Deliverect is a software platform that collects orders placed through all

mainstream delivery and takeout services and connects directly with your POS.

Avoid the ‘wall of Work with an No rekeying or manual

tablets’ unlimited number of entry needed
delivery companies

Automatic menu Ensure that every Maintain Ready to start preparing to open your own dark
updates on multiple customer gets a comprehensive kitchen? Our exclusive e-book offers you a step-by-
websites receipt oversight over all
channels step overview.

Want to learn more about how we can help you get the
most out of your delivery channels? Visit our website,
www.deliverect.com/features, for more details.

Scale up faster