Making food delivery profitable has always been a challenge for restaurant operators but with the current UK lockdown and ongoing restrictions globally, the need for restaurants to make food delivery profitable has never been greater.
The growth of marketplace brands such as Uber Eats and Delivery Hero has undoubtedly helped to drive revenue growth for restaurants as a short term solution, but the flip side is that many restaurants have become over reliant on marketplace brands for delivery, and the immediate concern for many restaurants is the inflated costs associated with this delivery solution and the impact it’s having on their bottom line.
Restaurants, on average, make 30% of the ticket price (transaction value) of a delivery order. However, the commission they pay on each order received from a typical marketplace brand is 15% of the ticket price but if they want the marketplace brand to also look after the physical delivery of that order, they typically pay an additional 15% (sometimes less for the big restaurant chains). This means that the profit from a delivery is effectively eroded to nothing.
Pre-Covid, when delivery, as a customer channel accounted for a small part of the overall business’ revenue, this was less of an issue – but now that delivery is currently a restaurant’s primary revenue stream, it’s critical that restaurants can make some food delivery profitable if they are to stay in business. Marketplace brands are reluctant to reduce their commission because the economics of their (mass gig economy delivery fleet) model don’t work at lower commission.
So what’s the solution?
The only way for restaurants to make delivery profitable is to avoid the 15% delivery charge by hiring their own drivers and to find an effective restaurant delivery software tool such as VROMO to manage their fleet in the most efficient way possible. As well as increasing profitability, restaurants can also maintain control of their customer experience.
And here’s how the VROMO Driver app helps with this:
It allows a seamless connection between the restaurant and driver. Drivers download the app to receive job offers, instructions and updates on the progress of jobs
You and your drivers will have the option to chat with each other in real time on each individual order. Drivers download the app to receive job offers, instructions and updated on the progress of jobs.
Track live progress from a bird’s eye view of your whole fleet and make real-time decisions. The VROMO driver app continuously sends location updates to the VROMO admin portal.
Your data, your control. View all your jobs in the job list and see all your data on the map. Drivers download the app to receive job offers, instructions and updated on the progress of jobs.
Send a live tracking link via SMS so customers can track the driver to their door. No more anxious phone calls and more happy repeat customers.
So why choose VROMO?
Efficiency – the delivery window is narrow (6-9pm) and trying to ensure a high number of orders are delivered on time, without hiring an army of drivers is impossible without software to manage the operation. VROMO software (the only dedicated restaurant delivery software) allows you to automate the entire dispatch process and do so with the smallest number of drivers. Restaurant staff spend less time organising delivery routes and less time dealing with angry customers on the phone; a smaller number of drivers are kept busy, which means they are happy because they are earning more. For the kitchen, knowing when the driver will arrive (Driver ETA feature) to collect means food is prepared at the last minute, so no wastage ($$), the driver isn’t being paid to wait in the restaurant ($$) and the food quality for the customer is at its optimum.
Customer Experience – knowing when your food will be delivered (order tracking feature) and more importantly getting your food delivered on time (automated dispatch from restaurant using closest available driver) all leads to a great delivery experience and one that will keep customers coming back. Furthermore, VROMO software allows the customer to send an anonymous message to the driver with any special instructions such as ‘baby asleep, don’t ring bell’
Receive more orders through marketplace apps such as Deliveroo – VROMO software integrates with brands such as Deliveroo etc. For restaurants that use their own in-house drivers to deliver all orders, both direct and marketplace orders, VROMO software will ensure a great customer experience; offering both speed and industry leading communication.
Delivery performance data can be fed back to the marketplace system meaning the marketplace is happy to promote that restaurant by moving them up the search rankings on the marketplace website. The higher up the rankings, the more orders you get and the difference is huge. Without VROMO, the marketplace cannot know how good the restaurant is at delivering the marketplace orders so the marketplace algorithm assumes a poor delivery experience and drops that restaurant way down the search rankings to avoid giving the marketplace customer a bad experience
Customer retention – VROMO branded order tracking allows the restaurant to brand the delivery experience. In addition to branding, the restaurant can embed any type of digital content in the tracking links sent to customers Eg. % Off Discounts, Friend referrals, loyalty programs, order next time from our website etc etc. 7/10 customers open these VROMO tracking links and spend on average 4 minutes looking at the page as they anticipate the arrival of their driver – that makes for a very high click through rate and dwell time. Restaurants can use this media opportunity to encourage customers to order more frequently, spend more, bring new friends or order from a more profitable channel
Payroll – the administration that goes with calculating weekly pay for drivers is painful and time consuming. This is because drivers are often paid according to a combination of variables ….hours worked, deliveries made, distance travelled etc. These calculations will take hours each week which takes time and money. VROMO automates your payroll calculation.