By Meredith Sandland, CEO, Empower Delivery

If your pizza restaurant is seeing orders decline even as revenues are at record levels, you are not alone. While pizza sales surged in 2023, transactions are dropping, a worrying trend for long-term success. According to PMQ’s Pizza Power Report that year, revenue per location was down and total revenue gains have been price-driven. This signifies a decline in transactions, a crucial requirement for success in any restaurant. The major publicly held chains have all reported that transactions are lagging, including Domino’s and Pizza Hut, who have similarly reported flat and even declining transactions.

The customer is sending a clear message through reduced order volume: The pizza value proposition is misaligned. The quality of the product and timeliness of delivery is no longer commensurate with the price paid. The result of cumulative price increases is a disconnect between what the customer demands and what the restaurant operator requires for profitability.

National chains have called out food-cost inflation and a persistent driver shortage that requires them to pay higher wages as reasons they need to increase prices. Independent pizza restaurants have experienced the same or worse. Restaurants have been forced to either increase prices or accept a lower margin.

Related: Study finds personal touch beats third-party delivery every time

To Deliver or Not to Deliver?
PMQ’s 2023 Pizza Power Report posed the question: “To deliver your own pizza or not to deliver your own pizza? That is the question.“ They go on: “Outsourcing delivery can be expensive—and risky. But reliable workers aren’t exactly lining up outside your door these days. Aye, there’s the rub.”

If you own a pizza restaurant, you already know why this is happening: Third-party marketplaces are making gig work more commonplace. Drivers no longer want to work in a W2 model. Gig work has proven to be the superior way to employ delivery drivers by providing the flexible schedules and competitive wages that delivery drivers want. Third-party marketplaces provide those two benefits.

For independent pizza restaurants, the driver shortage and commensurate costs create a considerable dilemma: Can you recruit and profitably keep first-party delivery? Or are you forced to rely on costly third parties and sacrifice quality and control of the customer experience?

Perhaps you’ve gone all the way to using one of the marketplaces’ white label services to deliver for you. This option is expensive, but you’ve chosen to just pass the costs on to your guests. They seem to pay it, or at least the ones who remain with your brand seem to pay it.

But how many guests have you lost? Will they ever come back?

Worse, are you diluting your brand? Using a third party for delivery puts control of the food quality and the overall customer experience into the hands of someone you don’t know, whose loyalties are unlikely to be aligned with yours. For many operators, your restaurant is not only your passion, it’s your livelihood. If you wouldn’t trust someone else’s employee to run your restaurant day-to-day, why would you entrust them to own the most critical interaction with your customer?

Or perhaps your solution has been to make a big push into carryout, hoping that your guests will do the delivery for you. Carryout is a big business, and many restaurant guests like picking up their own food. Unfortunately, studies have shown that delivery and carryout customers are distinctly different, each with a unique set of expectations and desires. So instead of finding a way to meet delivery customer expectations, you’re relying on the customer to change their behavior to meet your needs. That’s not a successful long-term strategy for any business.

The best operators differentiate themselves with how effectively they manage expenses, like delivery costs. While lowering driver costs may seem impossible against the backdrop of a national driver shortage, the solution is to leverage technology to use the existing driver pool more efficiently.

Related: How giving away free pizza fueled Domino’s big comeback in 2023

Dedicated Delivery Drivers Are Best
To meet the needs of delivery customers, a dedicated delivery workforce remains the very best way to deliver pizza. Unlike third-party services, in-house delivery guarantees end-to-end control of the customer experience, the fastest service and even the lowest cost. Pizza restaurants should stick to what they do best: first-party delivery.

So, if “self-delivery,” as the third-party marketplaces call it, is the lowest-cost and highest-quality way to get pizza to guests, how does a pizza restaurant compete for drivers in the midst of a driver shortage?

An automated, on-demand driver management system can give a pizza restaurant all the benefits of first-party delivery and give drivers all the benefits of gig work. As drivers indicate a clear preference for gig work, restaurants must shift their delivery models to match. A driver management system calls in gig workers when needed. The best driver management systems set up pools of on-demand drivers tied directly to the restaurant, avoiding cost-prohibitive, error-prone third parties.

Even better, delivery management software can manage dedicated on-demand drivers for you. You don’t have to schedule drivers, deal with call-outs, or find something for drivers to do during slow times. You also don’t have to be a tech guru to do it or commit significant time and expense to software development and integration.

Brands like Indiana-based Pizza Campion are already reaping the benefits of an on-demand delivery fleet, providing timely, accurate and low-cost delivery. Leveraging technology can optimize order management, reduce wait times and enhance accuracy, ultimately boosting efficiency and cutting costs. The future of pizza delivery lies in embracing technology. Software can solve this dilemma, giving pizza restaurants the best of all worlds.

Pizza’s legacy as the go-to delivery option doesn’t have to fade in the face of new options. By committing to in-house delivery and leveraging tech advancements to make the process more efficient and effective, independent pizza places can reclaim their status as the ultimate delivery choice. More importantly, it can allow operators to focus on what they do best: delivering fresh, hot, delicious pizzas and delighting their hungry customers.

Meredith Sandland is the CEO of Empower Delivery, a software company dedicated to making delivery the best it can be for restaurants, drivers and consumers alike. Their driver management software makes it possible for any restaurant to have their own dedicated on-demand drivers.