Food Aggregator Apps: Do They Make Sense for All Restaurants?

Small to midsize restaurants are doing everything they possibly can to acquire new customers and sales channels.  That includes signing up for food aggregator services like UberEats and Grubhub for the promise of increased exposure and orders.  But in reality, are food aggregator apps good for every restaurant?  

Food aggregator services may “sound” like an exciting opportunity for restaurants.  Restaurants get excited about the promise of new customers and a boost in sales, but oftentimes do not realize the heavy financial burden associated with these services.  With aggregator commissions as high as 30 percent on every order + delivery fee + service charge, restaurants are losing a significant portion of their already razor-thin profit margin.

Thinking of the bigger picture …

Does the restaurant know who is making the purchase when ordered through the aggregator app?

While restaurants aim to build a healthy bond with customers – converting new diners to regulars, enhancing the customer experience, and improving the bottom line – food aggregator apps make this nearly impossible.  There is no visibility to customer information and data, nor opportunity for personal engagement and relationship building.  

Restaurants are missing out on key data and insights around buying patterns, cross-sell opportunities and much more.  Customer engagement is absolutely essential for restaurant growth.

Why are restaurants willing to use aggregator apps when they significantly impact profits?

Restaurants have been compelled to sign up with food aggregator services with the promise of additional exposure, new customers, and sales, but they soon discover the commissions and fees associated with these services are significant.  Many restaurants are grappling with the tradeoffs between the benefits and impact on the bottom-line.     

Are the commissions and fees deducted for every order worth it?

For restaurants seeking out additional exposure and an additional sales channel – maybe. However, the significant costs may actually hurt what they have already worked so hard to achieve.  A 30 percent commission on every order + delivery fee + service fee does add up.

The good news is that there are other cost-effective and exciting technologies available for restaurants that customers love and have widely adopted – Mobile ordering apps, Self-ordering kiosks. 

Are aggregator apps helping restaurants stand out from the competition?

The answer is “no”.  Restaurants lack ways of differentiating from their competitors in these services.  This lack of differentiation and interaction with customers completely levels the playing field – which is good for some, and not so good for others.  What makes your restaurant special and unique is lost in the long list of restaurants provided for each search.  Your brand identity is absolutely marginalized in these services.  However, if your restaurant is new or struggling with low brand awareness these services may help elevate your awareness within your market.

There definitely are tradeoffs restaurants should weigh before participating in these aggregator services.   Again, the good news is that there are other cost-effective and exciting technologies available for restaurants that customers already love and will help build strong engagement & loyalty with your customer base.

A Custom Branded Mobile-Ordering App

Imagine a mobile-ordering app with your logo, graphics, menu items, and personal touch! Studies have shown the power of eye-catching graphics, and for restaurants this is a must-have feature.   Customers demand convenience and engagement.  Offering mobile ordering capabilities are imperative for restaurants to compete and grow their business, whether they have one location or a dozen. Mobile ordering apps help restaurants build personalized interaction with customers for targeted promotions and rewards. It’s the next step in a technology-driven world, making the process of eating out, or “eating out in”, more convenient for customers and more profitable for restaurants.

Affordable Self-Ordering Kiosk Systems

Order your meal with the ease of a touch screen kiosk. These self-ordering kiosks allow customers to choose food and beverage items on their own terms. Real-time recommendations can be made to compliment the order based on previous customer preferences, data insights, or restaurant input.   Kiosks can significantly reduce ordering wait times, allowing restaurants to process more orders with increased accuracy. From an operational perspective, kiosks help lower labor costs by reducing front-of-the-house employees and cash transactions.  

This exciting technology can help restaurants boost sales, delight their customers, and build brand loyalty. Investing in affordable kiosk technology is a smart choice for restaurants with ambitious business plans. 

So, do food aggregator apps make sense for all restaurants?  That answer is unique to each restaurant.  While exposure and access to new customers is critical for every establishment, the significant costs and impact to the bottom-line needs to be considered.  There are definitely trade-offs. While the costs are significant, does it hurt a restaurant to not participate in services such as UberEats and Grubhub?  

From a business growth perspective, restaurants should also be looking into new affordable technologies (mobile-ordering apps and kiosks) that delight customers and can go a long way into growing the customer base, increasing sales, and driving brand loyalty.