Delivery Revenue is on its Way to $68 Billion

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on Apr 12, 2019 9:00:00 AM
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I almost hate to report this, but it appears that delivery revenue is expected to triple the rate of on-sight sales by 2023, with digital orders taking the lion’s share. In fact, digital orders are predicted to go from the $25 billion they raised in 2018 to an expected $68 billion in just five years--2023.

This information arrived in the form of a report from LEK Consulting, a global strategy consulting firm. 

Why do I hate to share this info? I don’t know exactly, except for the fact that almost every other commercial I see cross my television screen is about something that you can buy online. Shoot, these days, we can even talk to a therapist without leaving the comfort of our own couch. I fear the end of human communication—our current world is just making it way to easy to stay at home and avoid those sometimes-uncomfortable encounters with others of the human race. But I digress. For those of you in the restaurant industry, it will be important to prepare for the coming demise of civilization as we know it.

 A few more of their predictions and observations included:

More than half of those ordering delivery are doing so directly from a restaurant’s app or website.

Considering this statistic, it may be time to take a good look at your restaurant’s website and, at the same time, make sure that it is mobile friendly. Here is a mobile friendly test site. Surprisingly, only 37 percent of restaurants are offering online ordering.

Restaurants use independent platforms, third-party platforms, and hybrid platforms to handle digital ordering and delivery.

An independent platform means that the restaurant runs its own delivery service through a branded app or website. This can also include carryout and curbside pickup. Going this route can save a restaurant approximately 15 to 30 percent—the commission that is charged by delivery companies. On the other hand, this approach takes planning including the space required and staffing considerations such as drivers and vehicles.

A third-party platform falls under outside agents such as GrubHub and Uber Eats. While this lessens the demand that operating your own delivery service requires, it’s important to use the dedicated software to control orders in order to ensure you don’t get swamped during prime time and end up delivering subpar meals to both in-house and delivery customers.

A hybrid platform is simply a combination of the two. An example of a company using this type of delivery is McDonald’s. Consumers can either order though Uber Eats and have their food delivered to their door or use McDonald’s app to place their order before picking it up curbside.

No matter which delivery system you choose, consistency and food quality are the key to success.

By 2020, 70 percent of restaurant home delivery services will be used by those who are 21- to 36-years-old.

This statistic will help you determine which delivery system is right for your establishment. If you cater to an older crowd, an in-house delivery approach may be the perfect solution and not lead to overload on your kitchen or delivery staff. On the other hand, if your target customers fall into the age group prone to request delivery, a third-party may help relieve the in-house load. Another consideration is the use of aggregators which handle the order-taking and online payment, while the restaurant is responsible for the delivery side.

Logistics, food quality, and consumer communication is what it takes for restaurants to win in a digital future.

It’s important to remember that the delivery game has come a long way since its advent in the 18th century. From packaging to the proper software, there are multiple options to choose from. In addition, make sure you have the staff to accommodate the influx and train accordingly.

As Maria Steingoltz, Managing Director at L.E.K stated, “While the right approach for a delivery system depends on the specific needs of the restaurant, it still all comes back to restaurant fundamentals.”

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Topics: Technology, Capital, Restaurant Experience, Food Delivery

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