How the world eats is changing dramatically.
Off-premise dining is now more important than ever for both restaurants and consumers. According to Statista, the Canadian food delivery market is set to reach US$9.95 billion by 2026, while the US market is expected to reach US$96.37 billion. This is huge! It’s obvious that delivery, whether through your own white label, first-party app, website or through a third-party delivery service, will remain a major source of revenue for years to come.
When it comes to your first party ordering platform, how do you determine whether or not you should invest in your own delivery service or use a white-label delivery service? We’ve reviewed the pros and cons of each option to help guide and assist you in making the best decision for your business.
White Label Delivery Services
White-label delivery services partner with restaurants to offer delivery alongside their first party ordering platforms, and allow customers access to order delivery in the comfort of their own home. The main players in the marketplace include Skip The Dishes (SkipGo) in Canada, and DoorDash (DoorDash Drive).
Here is a breakdown of the pros and cons that will help you make the best decision for your business:
White Label Delivery Service (DaaS) Pros
1. Allows you to Focus on your Core Business
The in-house dining experience, the connection you make with your customers, the ability to share your passion and love for food will always remain the heart and soul of any restaurant. While offering in-house delivery comes with many benefits, it may take away focus from managing your business and offering a memorable experience to the customers you actually have in your restaurant.
2. Streamline your Operations
It’s easy to use a white label delivery service and leverage a ready-made infrastructure. You don’t have to worry about start-up costs, sourcing vehicles and hiring drivers, tracking deliveries and managing online payments. Additionally you don’t have to worry about customer support and delivery issues. All of these things take time and money and not having to worry about them enables you to streamline your current business operations.
3. Low Fixed Commision Fees
White-label delivery services are much more affordable, and have a fixed price model. The fixed fee can be shared with the customer to reduce the cost to the restaurant and allows the restaurant to plan for a profitable delivery model. There are no sign up fees, hidden costs, and the fixed fee does not fluctuate like a commission. This allows restaurant operators to provide a convenient and relatively affordable way to offer delivery to their customers without going through the pain of setting up and managing their own delivery fleet.
White-Label Delivery Service (DaaS) Cons
1. Lack of Driver Control
White-label delivery services (DaaS) work in a way which does not provide the restaurant direct control over the drivers. This may potentially create a barrier in providing a seamless delivery experience to your customers. Any after order change requests might be more difficult to manage than an in-house operated fleet. .
2. Lack of Driver Accountability
Another potential pain point for white-label delivery services would be directly holding drivers accountable for any issues with the way food is being delivered or dropped off. If a customer is upset with a food delivery, it is more steps to manage the DaaS partner then it is to manage your own fleet.. If this were to happen, restaurant operators would have to get in touch with a helpdesk from the provider instead of directly contacting the driver.
In-House Delivery Service
Also known as Direct to Consumer Delivery (D2C), many restaurants have decided to build their own online delivery infrastructure. The important thing to remember when building your own delivery platform is understanding what customers are looking for when ordering online, along with how you can meet these needs and deliver an unparalleled digital dining experience.
In-House Delivery Service Pros
1. Control of Customer Experience
You can control the overall digital delivery experience and guarantee operational excellence. If there is an issue, you can resolve it in a way that aligns with your brand reputation. Customers have reported when they have a delivery issue while ordering through a 3rd party delivery service, they will still blame the restaurant so why not stay close to your customers and control how you communicate with them.
2. No Commission Fees
One of the most obvious pros is that you are not paying commission fees on every item of food that leaves your restaurant. With already slim margins, being able to control your delivery costs and building that into your labor costs could be critical to the overall success of your business.
In-House Delivery Service Cons
1. Initial Investment & Start-Up Costs
Building your own delivery infrastructure can be expensive. You will incur multiple costs – vehicles, driver salaries, and a customer support system to own the delivery experience. Your ability to scale is dependent on the amount of capital you have so you’ll need to be strategic about how you invest it.
2. Accountability and Customer Support
The opposite of not being able to manage any negative customer experiences is that you’ll need to manage all of them. This and the ongoing upkeep of an online platform may not be the best use of your time.
While both are viable solutions, white-label delivery services (DaaS) are designed for restaurants who want to keep a low overhead while helping them scale to a nationwide chain.
They are pre-configured and require minimal setup to launch and easily integrate into your digital ordering platform. Ready to roll on day one, at a fraction of the cost of building an in-house delivery service, you can create a fulsome digital brand storefront, while still allowing your team to focus on serving customers in your restaurant. We at Smooth, can help restaurants to not only provide a frictionless ordering system for your customers, but also a seamless delivery integration with SKipGo and DoorDash Drive.
About Smooth Commerce
Smooth Commerce is a digital ordering, customer marketing and loyalty platform for restaurants. We take ordering to the next level with personalized customer engagement, making your digital storefront the cornerstone of your brand. By solving more restaurant pain points in one digital platform than anyone else, we put you back in control of the customer’s experience with your brand to promote profitable sales growth.
If you would like to learn more or talk to a representative from Smooth Commerce about how our platform can help you meet your loyalty goals, contact us at learnmore@smooth.tech.
