Online food delivery platforms have made our lives easy by allowing us to order from a wide array of restaurants with just a few clicks. It has revolutionised the entire perspective towards the food industry by offering consumers the privilege to order varied cuisines, anywhere, anytime. Apart from that, customers get advantages such as no minimum order value and several payment options – net banking, wallets and COD, etc. This makes ordering more convenient and hassle free, thereby accelerating the growth of online food delivery.
Online food delivery benefits not just consumers, but also helps restaurants achieve greater reach and grow their business. Moreover, online food delivery platforms make the entire process of ordering easier, enable efficient customer and order management, provide valuable customer data and help restaurants stay ahead of competition.
Additionally, online food aggregators have come up with the concept of Cloud Kitchens. This is a model that can help restaurants and food start-ups scale at relatively low costs. Cloud kitchens prepare and deliver food usually via tie-ups with online food platforms – they do not have any dine-in or takeaway facilities. Cloud kitchens offer several benefits, they help restaurants:
- scale and grow without investing in expensive real estate, paying high rent, marketing their offering via mainstream media, investing in interiors etc.
- improve operational efficiency by allowing them to focus on deliveries without being disrupted by dine-in guests
- reduce labour costs by cutting down on servers, cashiers and hosts
- offer reasonable prices as a cloud kitchen doesn’t need to generate revenue to cover real estate, promotional and maintenance expenses
Undoubtedly, being on an online food delivery platform can help a restaurant in many ways. However, it also comes with challenges.
- When customers are offered discounts, restaurants and online delivery platforms gain instant loyalty from their users. However, this leads to customers expecting discounts on every order which then cuts into the restaurant’s margins.
- The online food delivery system is an arena with huge competition, which makes it unavoidable for restaurants to run on lower margins. Further reducing price and/or offering discounts increases the risk of going out of business.
- A small restaurant has a lot of pressure to compete with the big ones, who are joining online delivery platforms. Since the bigger restaurants are already equipped with financial resources, they can meet market demand for more offerings and discounts.
- The pressure to maintain quality of food and packaging along with sticking to delivery timelines set and meeting soaring demand is borne by the restaurants.