How are Food Delivery Services Impacting the Local Dining Scene?

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Gone are the days of food delivery being synonymous with two types of cuisine: pizza and Chinese. Italian, burgers, sushi…it’s now possible to get food from hundreds of Columbus-area restaurants spanning fast-casual to formal delivered right to your doorstep.

In just a few short years, Columbus has gone from a few localized options for food delivery to at least six major services shuttling eats. Between June of 2015 and August of 2016, DoorDash, SkipTheDishes, OrderUp, Postmates, Grubhub and uberEATS have all staked their claim in Columbus.

Central Ohio is just a few years behind the industry, which is developing at a breakneck speed of its own. DoorDash started in a Stanford dorm room in 2013 and now feeds more than 250 cities and 28 major metropolitan markets across the U.S. and Canada. After two years, Canada-based SkipTheDishes crossed the border to make Columbus its first U.S. delivery market in 2015.

The question remains on if the Columbus market is saturated, but research indicates the industry as a whole is massively underrepresented. Morgan Stanley Research estimates the total addressable market for food delivery at $210 billion (the amount in dollars of food ordered for delivery or takeout on an annual basis in the U.S.). Insights from BI Intelligence found that the two services considered industry leaders – Grubhub/Seamless and Eat24 – generated just $2.6 billion in food sales and represent about two thirds of the market share.

Food delivery is touted as a mutually beneficial relationship – convenience for customers, more business for restaurants.

The increase in food delivery options has been great for Columbus,” says Nick Meisen, market owner at OrderUp Columbus. “First and foremost, it’s expanded the idea and definition of what food delivery can be for both restaurant owners and consumers.” 

Below each side of the equation weighs in on the market in the capital city. Services talk nuance and competitors, and restaurants outline experience and impact.

Food Delivery Services Weigh In

Aside from ticking off the basic demographic checkboxes, a strong and growing food scene serves as a primary motivator for food delivery services to enter the Columbus market. OrderUp and SkipTheDishes were two of the first in June of 2015, most recently followed by uberEATS in August of 2016.

Services are responding to the increased competition in different ways.

“The food delivery market is a massive market, and we expect the entire market to continue growing over the next several years,” says Andrew Chau of SkipTheDishes.

Others aren’t so concerned with increased options, but instead turning the focus inward. DoorDash aims to create the best experience possible for their customers, merchants and Dashers, while OrderUp sees an opportunity for differentiation.

“There are a lot of players in the food delivery space, but what sets us apart is our authentic relationships with our restaurant partners, hands-on approach to delivery operations and locally-owned commitment to our community,” says Miesen who is at the helm of technically the only locally-owned option on this list.

When all food delivery services essentially serve the same function, the devil is in the details and nuances set competitors apart.

While he’d prefer OrderUp be a diner’s preference based on service, Meisen says, “I also love hearing that people choose to use OrderUp because we’re locally owned.”

With several restaurants using multiple services, customers are left to make decisions based on factors like delivery area (most platforms hit the urban core, while others service Downtown and the suburbs), delivery fees and menu markups. To see how the six services mentioned compare, CLICK HERE.

Third-party food delivery services also have to set themselves apart to restaurants. What kind of technology do they provide to take orders? What margins or services fees do they impose? As a diner has to find a service that fits their tastes, so does a restaurant.

Columbus Restaurants Weigh In 

Third-party services give restaurants that otherwise wouldn’t have it or be able to offer it the option of delivery. That generally equates to more business, a marketing boost and the opportunity to reach a wider net of customers.

A platform’s reputation and their foresight to pursue restaurants is typically what builds partnerships. And it’s not just a matter of picking one for most eateries, several restaurants list themselves on multiple platforms.

DareDevil Dogs owner Tomos Mughan says they went with uberEATS because of their large market share and Grubhub for its established client base. Marketing was a main motivator for Red Brick Tap & Grill and Easy Street Cafe GM Joe Deafenbaugh to list his restaurants on uberEATS. Delivery services scored the business of Hai Poké and Trattoria Roma by reaching out.

Third-party services are having the intended effects for restaurants – more (and different) customers, and more delivery sales.

A 2015 study from Grubhub found that restaurants listed on the platform saw their takeout revenue increase by an average of 30 percent – on par with what some local restaurants are experiencing.

Deafenbaugh says takeout orders have picked up substantially with uberEATS, to the tune of about a 25 percent increase in delivery volume.

Even dine-in style eateries are reaping benefits from allowing orders to go out the door.

“Just based on delivery, our gross sales increased $5,000/month,” says Matt Prokopchak, chef and owner of Trattoria Roma. “We are already staffed for business, so there isn’t an increase in our labor cost, but an increase to our gross sales.”

In a more general sense, “Third party delivery services have had a net positive effect on our business,” Mughan says. “They have increased sales in down times as well as helped drive our weekday late night business.”

Prokopchak agrees that offering delivery can help fill in the gaps on slow nights due to weather, OSU football games, etc.

Third-party delivery services may not be a fit for every restaurant. Hai Poké Founder Nile Woodson said yes to of OrderUp, Grubhub and Eat 24, initially interested in the marketing and increased exposure the platforms offered. And with no cancellation fees or contracts, figured they didn’t have anything to lose.

While Woodson says Hai Poké’s experience was positive overall, the eatery decided to cancel all other services and just partner with uberEATS.

“We just weren’t getting that many orders,” he says. After weighing the pros and cons, “It didn’t seem to be totally worth it.”

For a restaurant that operates on a primarily pop-up basis, balancing several service-provided tablets (Woodson was worried about what would happen if they accidently damaged one) and constant phone calls was ineffective. Instead, Hai Poké plans to test out one service and measure impact, choosing uberEATS because of positive word of mouth.

Restaurants find one major downside to third-party delivery services.

“We are no longer in control of our product once it leaves our doors,” Prokopchak says. “Some courier services have better drivers than others.”

Not common but concerning, Prokopchak says they will receive the occasional complaint that food is shaken up. It’s generally not the restaurant’s fault, but often still reflects poorly on the eatery.

Wanting to control that customer experience is another reason Hai Poké pared down their delivery partnerships.

In a seemingly ever-expanding market of third-party services, “Finding the right fit for your business model is important,” Mughan says. 

DoorDash, OrderUp, Grubhub and SkipTheDishes have all seen and expect to see continued growth in the Columbus market. And the field might be widening yet as rumblings of Amazon Prime Now entering the Columbus market start to circulate.