Since its initial surge during the pandemic, online ordering remains a significant revenue driver for restaurants and, more recently, convenience stores. The typical restaurant now generates between 25–30% of all orders digitally, according to the Paytronix 2024 Online Ordering Report. Given the scale of digital orders, it’s worth determining whether you should use a third-party marketplace for digital ordering management, a first-party online ordering platform, or the two combined.
While third-party marketplaces offered operators a straightforward way to get online in the past few years, that ease comes at a high price. External online ordering services can take up to nearly a third of the profits from your digital ordering channel. Most restaurants mark up their third-party menus to compensate, but inflation and lack of data ownership make this strategy difficult to maintain in the long run.
That’s not to say third-party delivery aggregators don’t have their place in today's market. These three services provide important benefits on their own, or in addition to a first-party online ordering solution:
While third-party marketplaces can remain part of your online ordering solution, recognize it takes a first-party solution to achieve first-party goals, including a loyal, valuable, digital customer base and building lifetime value by leveraging customer data.
Third parties want to retain your guests as much as you do. That's why third-party guests receive loyalty offers from their chosen marketplace with every order. Without a first-party option to convert them over to ordering direct, you’re not only forfeiting valuable customer data, but you’re also losing future orders.
Restaurants and c-stores that want to maximize profits—and guest relationships—are strategically shifting to first-party ordering. Our 2023 Online Ordering Report shows that guests who order directly from their chosen restaurants add real value for operators.
Compared to guests who come through the door via third-party marketplaces, first-party guests:
In addition to being more frequent visitors and bigger spenders, guests who order directly from your website or mobile app give you valuable, actionable data, such as identity, dining behavior, and demographics. With these valuable insights at hand—and greater control over the guest experience—you have a clear runway to build a comprehensive guest engagement strategy that generates customer lifetime value and revenue for your brand.
Restaurants and c-stores should be implementing first-party ordering platforms for one simple reason: guests prefer to order their food that way. This trend has been stable for the past three years and is strongly expected to continue.
In 2021, DoorDash admitted that 43% of its customers preferred to order delivery through a restaurant’s website or app, while only 27% preferred to order through a third-party platform. In the same year, we heard two interesting things from guests: Approximately two-thirds of people who select third-party marketplaces do so for convenience. And more than one-third believe they can’t order delivery from their desired restaurant or convenience store, which may or may not be the case.
While making changes to reach the most valuable and loyal customers requires a bit of a commitment, it can be worth it for most restaurants and c-stores:
Now that online ordering is table stakes for most operators, first-party online ordering systems have become powerful platforms that integrate fully with other critical guest engagement functions and systems, such as marketing automation, loyalty, point of sale (POS), and delivery services. The combination of first-party ordering and loyalty programs, for example, delivers more personalized digital guest engagement that leads to longer-lasting, more profitable relationships.
When you have your first-party online ordering platform up and running, you can start moving guests away from third-party marketplaces. Here are some tips for driving traffic to your first-party channels:
Online food ordering is often in flux, especially as inflation and economic uncertainty cause consumers to tip less, give worse ratings and reviews, and eat out less often.
Third-party marketplaces are working hard to increase their hold on the online ordering market. To stay competitive and prepare to navigate continued change, increasing digital guest engagement and improving retention through first-party online ordering platforms is a must.
To learn how Paytronix can help you unlock the potential of first-party online ordering, book a demo now.