My recent travels have led me to wonder where the restaurant and takeaway food industry is heading.
A simple Google search for certain types of food shows that many food outlets do not have their own website. Instead, they rely on food-ordering and delivery platforms such as the ones above to make sales.
These platforms allow customers to order food online from a range of restaurants using one app. This means food outlets have no interaction with these customers. They only need to focus on preparing the food, as the app organises the order and delivery.
On two occasions, when I walked down the street to collect the food I had ordered, I saw that my preferred types of food were available, but I had been unable to find them because the outlets providing them had no website. I can’t avoid the conclusion that many establishments must be missing out on sales.
One outlet told me that more than 50% of their revenue came from food-ordering and delivery apps, with one app taking 35% of each sale. Consequently, the outlet has had to raise its prices to avoid losing money.
Food outlets must pay premium rents for main street visibility, but half their business is virtually wholesale. This disruption to their business model means that, ultimately, they could go out of business. They take a big risk for the long-term by relying on food-ordering apps – that is, they don’t have their own customer base, and lack of contact with customers leaves them isolated. Their business success depends on the platform they use, continuing to be in business, continuing to enjoy a dominant position over the competition (which is generally flawed when it comes to platforms), and not changing their rules.
In any business, no matter how small, you need to be in control of your outcome as much as possible. Surrendering your sales and marketing to someone who also promotes your competition’s products or services reeks of Russian roulette. Will they start increasing the percentage they take from your sales to “prioritise” your listing?
As more platforms are established and FOMO (fear of missing out) afflicts small business owners, the quicker the race is to the bottom. Investing in your own website and online presence, no matter how simple, and a CRM (customer relationship manager) is one of the best ways to hedge your bets about where your sales will come from in the future. Some larger accommodation providers now advertise that they will sell to you directly at a cheaper price than anything you can find on an online booking agency.
If you need help taking control of your sales, email me at email@example.com.