Article

Prioritizing Digital Demand: Restaurants, It’s Now or Never

Rakuten Ready

Posted by: Rakuten Ready / November 3, 2020

Lessons from 2020

The pandemic has taught the restaurant industry a lot of hard lessons – many of which are still being felt nationwide. Arguably the most important lesson learned has been: If you don’t have online ordering and aren’t driving demand to your online ordering platform…you will struggle to survive. While that harsh reality is not one exclusive to the restaurant industry…it IS one that needs to be prioritized and thoughtfully planned out by restaurants, in order to survive beyond 2020.

Currently, 40% of consumers are ordering at least one meal online each week. And while 16% of them just started doing so, 53% have increased online food ordering as a result of COVID-19. And our research at Rakuten Ready shows that 85% of consumers plan to continue their reliance upon online ordering.

This is great news for brands who already prioritized digital infrastructure and are driving demand to their online restaurants. Unfortunately, most restaurants do not fall in this category.

The Food Delivery Explosion

It’s no surprise to anyone that Food Delivery had already hit critical mass before COVID, and shelter-in-place orders expanded it exponentially. Ecommerce Growth recently reported on the top five eCommerce industries who experienced growth as a result of COVID and expect to see continued growth – Food Delivery is, of course, one of the top five.

As such, many restaurants began to equate going digital with partnering with 3rd party food delivery apps. While that is certainly one viable route, there are well known downfalls there, including:

  • Cost: 3rd party aggregators notoriously charge steep fees, cutting into restaurant margins by 25 – 40%, requiring restaurants to increase menu rates to make any profit (which in turn often detracts customers, especially loyal ones who know the usual costs).
  • Awareness/Competition: Like Amazon, aggregators have a pay to play model that enables those with money to buy premium promotional placement. This not only leaves those without deep pockets in the black hole of restaurants found well below the fold, but it also turns competition into a money game vs one of food quality and service.
  • Customer Disintermediation:  One of the most egregious results of leaning too heavily on aggregators is that the customer relationship is no longer yours – this third party is gaining customer loyalty, while restaurants are losing that connection.

“While many traditional options for online meal ordering, such as Chinese takeout and pizza have long been mainstream, third party ordering and delivery services have recently expanded the market. With more consumers cooking and dining at home, foodservice operators have quickly adopted this strategy or even started implementing their own infrastructure for online ordering and meal delivery to remain competitive.” – Restaurant Dive ‘Delivering Dinner: Online meal ordering trends’

The Answer

As the quote above suggests, many restaurants have recently implemented their own online ordering infrastructure to maintain control of their brand, product, and customer relationship. But standing up such infrastructure is Step 1.  Our goal here is to highlight how driving more traffic and orders comes with prioritization of driving digital demand

Many restaurants painfully learned that if service updates weren’t on Google, they basically ceased to exist. As such, Google launched a number of tools to support local businesses when COVID hit. But digital demand requires much more than Google.  This great resource from Brandify outlines many vital digital platforms (Google, Yelp, Facebook, Apple) and how to maintain those channels. 

And while Google, Facebook and Yelp are all important digital tools, real growth (customer acquisition and increasing customer orders) requires valuable incentives, especially in tough times like this. What you need is a primed platform that has your captive audience. Enter Rakuten.

Drive more online orders

Rakuten, known for providing cash back to millions of online retail customers, is now offering cash back for restaurant orders made on their platform.  From its expansive customer base, Rakuten can promote your restaurant, resulting in incremental customers and online and in-store orders. Here’s how it works:

Browse

Users browse restaurant offers on Rakuten (i.e. 5% cash back).

Link 

Users link an offer for immediate online purchase (i.e. via your website or app) or they add a credit card for in-store purchases (dine-in or takeout).

Earn

Customers order food with you and instantly earn cash back. You pay only on sales made. 

Restaurants such as these, Denny’s, Applebee’s, Rubio’s, GoPuff, AAA, Cracker Barrel, Native Grill, and Famous Dave’s are driving awareness and online or in-store traffic and sales with cash-back incentive programs.

By investing in a partnership with Rakuten, you:

  Attract new audiences

  Connect with loyal or lapsed customers

  Drive online & in-store spending

 Yield serious ROI – which every restaurant today needs!

Learn more about how to drive demand with Rakuten HERE