In today’s world, where Amazon delivers everything imaginable in 48 hours and online grocery shopping has become a regular practice, bakers have to follow suit if they want to stay current. That means offering delivery, which can look two different ways. Bakers can invest in their own drivers and vehicles to control the entire process, or they can join up with a third-party delivery company like DoorDash, Uber Eats, GrubHub, Postmates or Caviar. The latter is a category growing by leaps and bounds.
According to Second Measure, a San Mateo, California-based technology company that analyzes purchases to study consumer behavior, sales in the meal-delivery industry grew 41% year-over-year in 2019. DoorDash has been the leading delivery platform since May 2019, and it increased its lead yet again in January, capturing 38% of U.S. consumer meal delivery sales during the month. In second place is GrubHub at 31%, followed by Uber Eats at 20%.
While these platforms and delivery stats cover all meal options, bakers see this as an opportunity for increased sales. Take Unrefined, a bakery in the Dallas/Fort Worth area with seven retail locations. The company has been using DoorDash for four years with delivery available from all seven locations. “Our most successful third-party delivery service is DoorDash,” says Taylor Nicholson, co-founder. “Cupcakes across the board are our top-selling item, then sandwich bread, specifically keto bread, and then pizza crust.”
She says the busiest delivery sales one of her stores has had to date is 11 orders in one day, but it has a lot of repeat customers who consistently order through the food delivery service as well.
There are several reasons why a baker would want to offer third party delivery. First, you don’t have to invest in your own fleet of delivery vehicles and all that comes with it, such as hiring and paying drivers and the cost of gasoline and insurance. Nicholson says the traffic around the DFW area is so terrible, many customers specifically use the online delivery service so they don’t have to navigate it. At Unrefined, traffic was the main reason the company never considered handling delivery on its own.
Second, weather can drive online delivery sales. If your store is in an area where weather causes problems, delivery allows sales even when customers can’t or don’t wish to get out on their own. Third, statistics prove that delivery is here to stay. A quick glance at the DoorDash website shows that the company does over 800,000 deliveries per day. According to a study by Mintel, 87% of American who have used third-party delivery services say it has made their lives easier, with roughly a third of these using these services at least two times per week.
If you are just starting out with third-party delivery, Nicholson recommends reading the merchant agreement carefully. What percentage does the delivery service take off the top? Do you have control over your menu pricing? Who is at fault if a mistake is made or a product is damaged during delivery?
“DoorDash takes responsibility for the mistakes, but we don’t partner with Uber Eats because if they make an error, it’s on the merchant,” she says. “If Uber Eats drops an $80 cake, then we are out the cost and the customer is unhappy, and I already paid a percentage on the top.”
With fear and uncertainty related to the coronavirus outbreak slowing down business for bakeries, third-party delivery is a way to reach customers during a tough economic period. Many establishments are turning to this model to make up for lost revenue.
Several delivery platforms let customers dictate where orders can be dropped off to avoid physical contact. This no-contact solution helps to ease some of the concerns of food delivery and encourages increased ordering during a time when individuals are looking to limit their personal interactions.
Let people know that you deliver through one of these platforms by advertising it on your website and social media.
Restaurant Online Ordering Statistics
For savvy restaurateurs that rely on data to make important business decisions, Upserve Restaurant Insider, a restaurant management software company, compiled statistics that give insight into just how powerful online ordering is.
- 60% of U.S. consumers order delivery or takeout once a week.
- 31% say they use these third-party delivery services at least twice a week.
- 34% of consumers spend at least $50 per order when ordering food online.
- 20% of consumers say they spend more on off-premise orders compared to a regular dine-in experience.
- Digital ordering and delivery have grown 300% faster than dine-in traffic since 2014.
- 59% of restaurant orders from millennials are takeout or delivery.
- 33% of consumers say they would be willing to pay a higher fee for faster delivery service.
- 87% of Americans who use third-party food delivery services agree that it makes their lives easier.60% of restaurant operators say that offering delivery has generated incremental sales.
- Orders placed via smartphone and mobile apps will become a $38 billion industry by 2020.
- Working with a third-party delivery service has been found to raise restaurant sales volume by
- 10 to 20%.
- Delivery sales could rise an annual average of more than 20% to $365 billion worldwide by 2030.