Online ordering to the rescue!
The Problem!
We all are affected by the current pandemic. Hospitality business in the UAE is fighting for its survival, and we know it’s tough.
Among the restaurants, quick service operations and restaurants who had established delivery operation, somehow, are in a better position. Smaller overhead, smaller premises, fewer employees, all can give the chance to fend the situation. But smaller business means lower cash flow as well.
What about casual dining? And fine dining? And bars? Lounges? All who rely on the ambiance and dine-in experience and social gathering are facing a bigger dilemma on the way to continue their business.
Regardless of the type of restaurant operation, we see all around that the delivery operation increases its share in any restaurant operation.
The restaurant with a regular delivery operation is doing better than others. But they also have challenges, and others who want to improve their delivery operation will face those challenges as well. One of the difficulties is delivery-aggregators.
The market is heavily relying on the delivery-aggregator portals. Even before the current pandemic, many restaurants were complaining about the attitude of the delivery-aggregators and their high commissions.
They are charging the restaurants with a high percentage of the order value. The drivers are not representing the restaurant, so there is a missing chance to create a bond between the restaurant and the customer by using the drivers as representative of the restaurant and somehow creating an experience for the customer. The restaurants are not getting their customer data from the aggregator, so they are blind toward that portion of their customers, and this can affect their marketing efforts. And one of the main behaviors of the customers in the portal is to purchase heavily discounted foods, which again is a burden to restaurants.
Of course, there are benefits as well to use the aggregator. Less headache on dealing with the delivery operation requirements, like a call center, vehicle maintenance, drivers, reach to a broader customer base, running promotions, and marketing activities.
The Solution!
Still, these pros and cons cannot deduct the operation to only rely on the aggregators. Restaurants need to build their online presence to improve their cash flow and cut the costs on aggregator commissions. The good part is, we have aggregators who only handle the delivery, and the rest of the ordering process and interaction with customers are left to the restaurants. That’s an opportunity a restaurant can use to improve its delivery operation and overcome the cons of the delivery aggregators.
The first move for a restaurant to improve its delivery operation is to create its digital presence. I mean, they have to have an online ordering portal, website, and a social media page. Customers can go and put their information and their order directly in the restaurant portal instead of the aggregator. The online ordering software will operate like the POS, send the order to the kitchen, handle the payments, handle the customer information. And, many other functions that an on-premise POS does.
Then it comes to the delivery of the order. These days almost no one does the delivery without charge in the UAE. This charge can go to the delivery company, who just do the delivery and do not charge a high commission of the order.
The third part of the process is the marketing. As per the statistics on social media usage, the penetration of social media in the UAE is 99%, and using online ordering is increasing (download another study by Visa in 2019). So, the restaurateurs do not need to educate their customers to put an order online! The customers are already doing it. What the restaurants need to do is to be present online, and market their products online.
As an observer and solution provider to the hospitality business in the UAE, we see a massive disproportion between the number of restaurants and their online presence and digital marketing activities.
In the current situation and most probably for the foreseeable future, people will use online ordering more and more. So, if customers don’t see a restaurant online, they less-likely order from them.
The bottom line is, as the whole market behavior is adjusting with the new realities of the environment, restaurants need to change their operation accordingly to survive the situation and hopefully grow again when the pandemic wind down.
