- Pizzerias can still dominate the delivery space by tracking and adapting to key trends and capitalizing on consumer demands, according to Intouch Insight’s 2022 Restaurant Trends Report.
- Only 29% of consumers surveyed said they had engaged with a restaurant through a third-party delivery app while 31% said they ordered directly from the eatery.
By Lisa van Kesteren, Chief Experience Officer, Intouch Insight
Fast and convenient delivery has long been a staple of the pizza industry. However, the rise of third-party delivery services now gives other restaurants—which previously did not offer delivery—an easy way to do so. Could this undermine the pizzeria’s edge as the king of quick and easy delivery?
According to Intouch Insight’s 2022 Restaurant Trends Report and ongoing consumer surveys, all signs point to no. Pizzerias can continue to dominate the delivery space so long as operators track and adapt to key trends and capitalize on consumer demands. So, what do you need to know today to stay ahead?
The Appeal of Third-Party Services
The rise of mobile app usage for food purchases is undeniable. According to the latest Restaurant Trends Report, 71% of consumers reported having used a mobile app to purchase a meal. And as the popularity of applications rises, the appeal of using a third-party delivery service does too. Signing up with one of these services can increase brand exposure by presenting the restaurant as an option to their users while saving the up-front costs of developing an in-house app and removing the additional work required to hire, train and manage in-house drivers.
But these benefits aren’t free. Third-party delivery services generally charge high commission fees. This means the up-front savings from signing on with a third-party service is spent over time on individual orders. As a result, while sales might increase, profits won’t rise at the same rate. Additionally, if a restaurant’s point-of-sale system doesn’t integrate with the third-party application, staff will have to manually re-enter these orders, using valuable time that could be spent on other tasks.
However, the biggest downside of using a third-party delivery service is relinquishing control of your customer’s experience to another brand. While the consumer enjoys your food, their entire transaction—from reviewing the menu, selecting their meal, receiving their order, and leaving a review—happens between them and the third-party. Yet only you can deliver on your brand promises.
The Importance of a Personal Touch
Despite the popular usage of mobile apps, third-party delivery services are not the primary way customers are engaging with restaurants. While dine-in services suffered over the past couple of years due to COVID-19 closures and regulations, as stated in the 2022 Restaurant Trends Report, more than 85% of consumers said they had engaged with a restaurant using dine in, take-out or drive-thru in recent weeks. Conversely, only 29% said they had used a third-party delivery app to do so—coming in behind delivery directly from the restaurant at 31%.
When asked specifically about ordering pizza, the number of respondents who said they had used a third-party delivery app dropped to only 9%. In fact, third party delivery ranked well behind all options that allowed patrons to engage directly with the pizzeria.
Consumers crave connection and third-party services interfere between them and the brands they love. Fifty-one percent of consumers revealed their favorite pizza restaurants are local mom-and-pop shops, followed by Domino’s at 34% and Pizza Hut at 32%. So, whether you have one location or thousands, building that direct relationship with your patrons will do more than a third-party service ever could.
Direct Relationships Give You the Power
Continuing to engage consumers directly eliminates the “gatekeeper” of your customer data. Third-party services collect reviews and user data, but these metrics are controlled by those platforms. Fostering your own relationship with consumers and strategically collecting information on what they want from your business allows you to collect the data and use it to drive informed business decisions.
For example, knowing if a customer has never ordered dessert from your restaurant gives you the option to offer a one-time incentive to motivate them to try one of your famous sweet treats. Further, a great alternative to discounts is extra loyalty points. In a recent survey, 82% of consumers said they would purchase an item worth more loyalty points if equal in value—making loyalty programs an excellent method to influence purchasing habits when you have the necessary data.
Loyalty programs are incredibly popular, with 94% of consumers reporting they are part of at least one. They offer an easy way to trace transactions back to individual customers. While phone numbers or email addresses can identify customers from one order to the next, consumers are more motivated to use the same rewards card each time as it is the only way to collect points and redeem rewards.
However, loyalty programs are not a primary driver for customer loyalty. When asked the top three reasons they remain loyal to a restaurant, consumers ranked customer experience as No. 1, followed by the quality of food and price. This again begs the question: With customer experience being the primary reason customers stay loyal, why would you hand over the control of this experience to a third-party service?
Keep Consumers Coming to You
As pandemic-related concerns have subsided, cost and quality have returned as primary drivers for consumers choosing where to find their next meal. When asked the primary factors around choosing where to order pizza, quality of ingredients came in first with 81% of consumers listing it as important, price came in second with 71%, and variety of menu items in a distant third with 35%. Additionally, the No. 1 improvement consumers have wanted to see from restaurants since the fall of 2021 has been cheaper delivery fees.
Managing your own delivery service gives you more control over this ever-prevalent factor of cost. As we saw earlier, the savings for restaurants using third-party delivery services are all in the up-front investment. This means pizzerias who already have that infrastructure in place are in an excellent position to compete with brands who are beholden to fees dictated by the third-party services they have chosen to use.
While consumer data does not indicate third-party delivery services are overtaking in-house services offered by pizzerias, operates must keep a close eye on ever-changing consumer habits to continue to increase brand loyalty and market share.
Lisa van Kesteren is chief experience officer for Intouch Insight. She is a trusted advisor to QSR brands across North America. Building on her extensive background measuring customer experiences, Lisa helps clients see their business from all relevant perspectives with the ultimate goal of informing strategic decisions so they can deliver on brand promises. She is well-known in the industry for the SeeLevel HX Annual Drive-Thru Study and is a sought-after speaker, having presented at a number of conferences and events, including Food on Demand Conference, Restaurant Finance Conference, MUFSO, Firehouse Subs Family Reunion, CX Talks, MSPA Conference, and a number of industry radio shows and podcast episodes.