Delivery customers are different: Getting to know your most valuable customer segment who will never enter your restaurant.

Although customer tastes are trending toward takeout, delivery customers remain a critical segment to embrace. That’s because one key learning from the last two years is that delivery customers are different, and in a good way. Paytronix has published The Order & Delivery Report 2022, which details this trend and the data surrounding it. This blog and the ones that follow will highlight findings from that report, as well as sheds new light on recently acquired data.

Delivery guests order more, tip more, and are more loyal.

While both takeout and delivery subtotals increased roughly 15% in the wake of the pandemic, delivery subtotals have consistently remained about 12.5% higher, contributing substantially to restaurants and c-stores’ bottom lines.

Moreover, delivery customers tip better and more frequently. The data below shows that for much of 2021, the average delivery tip was 12.5% of the subtotal, more than double takeout order tips. And 2021 takeout orders included a tip just 37% of the time compared to nearly 73% of delivery orders. These trends held steady throughout 2021, indicating an existential and fundamental difference between the two groups.

Delivery guests are also more loyal and order repeatedly from the brands they love. Approximately a third of orders from delivery customers are from guests who order multiple times a month, while takeout customers tend to be more sporadic, with only about a quarter of orders coming from customers who order multiple times a month. Since pickup customers order less frequently, brands should strive to be memorable. A special experience for pickup customers can do a lot to make a customer feel appreciated.

Delivery guests are more likely to love or hate their order…but not as much in between

Delivery guests are more likely leave either very high or very low ratings. This is likely because, while the population of guests who order delivery is more loyal, there is a higher likelihood for order mistakes to occur when delivery is added to the mix. Delivery gets pretty much the same score as takeout, except for the categories of Service and Food, which tend to be the feedback questions most impacted when there is a slow delivery or missing item. This error is compounded by the difficulty of correcting mistakes off-premises. Delivery customers also understand they are valuable, and they demand great food and service to stay.

While there’s no question delivery is operationally difficult, when it goes right, it goes really right. These customers are generous and loyal, and it’s worth making changes to your order and delivery process to accommodate them.

Order and delivery is changing! Here’s how guest ordering shifted from 2020-2022.

The COVID-19 pandemic was extremely disruptive to the restaurant and c-store industries. Consumer behaviors toward dining and restaurants shifted quickly at the pandemic’s onset in early 2020, and even as pandemic restrictions begin to ease, consumers don’t appear keen to revert to their old ways. .The Order & Delivery Report 2022, which details this trend and the data surrounding it. This blog and the ones that follow will highlight findings from the Paytronix Order & Delivery Report 2022, as well as shed new light on recently acquired data.

Certain habits appear to have changed permanently. Customers clearly want to place orders digitally, a technology trend that picked up steam just as the pandemic took hold. Third-party ordering services have become a restaurant and c-store fixture, and savvy brands have both embraced these technologies as well as tools that allow them to simplify operations.

A Shift in Ordering Behavior

While on-premises ordering is resuming, it is still far below pre-pandemic levels. In the meantime, digital ordering continues to prove a rewarding investment for restaurants and c-stores, thanks in part to how easy it is to complete a digital order today. Paytronix data shows that digital ordering will continue to exist alongside in-store options, perhaps for good.

The graph below tells the story of 25 brands who operated continuously during the pandemic. The first graph represents their in-store sales while the green shows digital orders. In-store sales remained down 42% from their peak in January 2020; digital orders were up 113% during that same time period.

Digital vs in-store orders, 2020-2022

The nature of digital orders has changed as well. While delivery was king before and during the height of the pandemic, more recent data indicates that takeout orders now dominate online orders, with numbers even higher than they were pre-pandemic. Takeout jumped from approximately 35% of orders in January 2020 to a majority in March of 2022, a trend that appears to be increasing. Meanwhile, curbside pickup, which received a lot of attention during the early days of the pandemic, has all but disappeared.

The rise of takeout and the decrease of delivery and curbside orders

Adapting to third party delivery

Now that it’s clear these third-party services have staying power, vendors are taking back control with tools such as Paytronix HandoffSM, a system that takes orders from third-party marketplaces and automatically inserts them into a point-of-sale system, eliminating the need for “tablet farms”. It also allows restaurants and c-stores to make changes to their online menu and propagate those changes to all third-party delivery services. This gives brands the flexibility to customize offerings and pricing, as well as ensure that the services have the most current menu.

While there are clear advantages to partnering with third-party delivery services, there have been some growing pains as well. During the height of the pandemic, it was normal for a restaurant
or c-store to have multiple tablets cluttering their order counter to accommodate the various services they were utilizing, a system that could quickly become confusing and overwhelming, contributing to the stress of burned out and overwhelmed staff.

Third-party delivery will continue to be a viable channel in the future. Even if restaurants and c-stores are successful at converting third-party delivery customers to first-party delivery customers, third-party services will continue to play an important role in a customer acquisition strategy. Success in today’s “new normal,” means embracing new sales channels, and new technology.

Paytronix Viral Challenge Shares Love of Technology with Local High School Students

By | April 11, 2022 | Uncategorized

Last week, Paytronix capped off the #TikTokToTechPX Challenge, run in conjunction with Boston Public Schools, specifically the English High School. We had asked the students to create a TikTok video that tells their story about what attracted them to technology. These students (and their parents) celebrated their exceptional work highlighting the potential of a career in tech.  

This is part of a greater Paytronix effort to bring diversity and inclusion to technology roles not only at Paytronix, but also within the industry at large. In working with Boston Public Schools, Paytronix reaches high school students who have an interest in tech to help show them a path to a role at a company like Paytronix.  

Congratulations to the winners, and we look forward to welcoming them as part of the next generation of tech innovators. 

What Can Restaurants Learn from Netflix?

By | March 22, 2022 | Uncategorized

Subscription programs have emerged as a key component in the restaurant marketing toolkit. Like the loyalty programs on which they’re based, well-designed subscription programs keep guests returning and help drive incremental value. They also reach important demographic groups to produce long-term benefits.

The latest collaborative study between Paytronix and PYMNTS, The Digital Divide: Restaurant Subscribers and Loyalty Programs, finds that subscription programs help restaurants lock in their most valuable and loyal customers.

Survey results show that 75% of non-subscribed consumers are at least “slightly interested” in joining a restaurant subscription program. And there’s a significant chance that new subscribers will become highly valuable to a brand.

Today’s restaurant subscribers are among the industry’s most engaged, and loyal customers. They visit more often, spend more, and stick around for longer.

It’s therefore no surprise that a strong correlation exists, as 80% of subscribers also use loyalty programs.

Subscription programs tap into a particularly valuable consumer demographic: the bridge millennial. College-educated, tech-savvy, and wealthy, this group takes full advantage of a brand’s loyalty offerings and spends more than the average consumer.

Subscribers have indicated that their primary needs are convenience, simplicity, and value. For most brands, implementing a subscription program is a logical step because it involves many of the elements that are already at the core of the guest experience.