To Win Over Highest-Value Customers, Restaurants Must Take a Tip from Grocery Startups

Restaurant Delivery

Online grocery is getting faster and faster. Throughout 2021, ultrafast grocery startups have been popping up all over the world, and in early December, delivery giant DoorDash made its first move into the space with the announcement of its own 10-15 minute grocery and convenience delivery option. Meanwhile, restaurant deliveries continue to take up to an hour. Now, if restaurants want to win over their best customers from third-party aggregators, they will need to pick up the pace.

See also: DoorDash Debuts Ultra-Fast Delivery Service in New York

While third-party marketplaces can provide a valuable acquisition channel for restaurants, the drawbacks begin to outweigh the benefits when too much of restaurants’ sales come in through these channels. Restaurants both divert a significant portion of the profit to these aggregators and lose out on access to their customer data, making it nearly impossible to build loyalty.

If restaurants want to incentivize consumers to order through their direct channels, PYMNTS research reveals, they may need to find ways to compete with the delivery times offered by leading third parties. According to data from PYMNTS’ report “Digital Divide: Aggregators and High-Value Restaurant Customers,” created in collaboration with Paytronix, which featured a census-balanced survey of over 2,100 U.S. consumers, restaurants’ highest-value customers are disproportionately likely to make their decisions based on delivery times.

Get the report: Digital Divide: Aggregators and High-Value Restaurant Customers 

The report found that the highest-spending, highest-frequency diners were nearly twice as likely as their low spending, low-frequency counterparts to seek out speed, with 44% of these ultra-valuable customers reporting that faster delivery times encouraged them to turn to third-party aggregators, compared to just 24% of infrequent, low-spending customers.

The good news for restaurants is that when they are able to provide the speed that these high-value customers want, it makes a huge difference in encouraging them to skip the aggregators and go straight to restaurants’ direct ordering channels. The study found that 58% of high-frequency restaurant customers who opt for direct ordering channels cite time savings as a key motivator.

Given the driver shortage across industries today, it can be difficult for restaurants to meet consumers’ expectations even for average-speed deliveries. Speeding up the delivery process will require either significant changes to the labor structure or the adoption of emerging technologies that promise to fulfill food delivery orders without the use of human labor.

In fact, Yariv Bash, co-founder and CEO of on-demand backyard drone delivery company Flytrex, argued in an interview with PYMNTS that the adoption of drone deliveries to fulfill food orders is inevitable.

“If we’re talking specifically about restaurant meals, there’s no better way,” Bash said. “The other way that I can think of in terms of robots is … a whole car delivering a burrito or a hamburger. It just doesn’t make sense in terms of volume and size and weight, and … those cute robots that drive on the sidewalk, they’re driving [too slowly].”

Read more: Flytrex CEO on Drone Food Delivery: ‘There’s No Better Way’

So far, restaurant companies El Pollo Loco and Chili’s parent Brinker International have been among those to test out drone deliveries. As providers continue to be granted government approval to launch drone delivery services in additional areas, it is likely that the space will grow quickly in the years to come.