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How eCommerce can help restaurants

2020-08-10

The restaurant industry is and always has been a very competitive industry. Approximately 6 in 10 restaurants fail within the first year and nearly 8 in 10 restaurants are out of business within the first 5 years, and the year 2020 did not make things better. In Canada alone, 96% of restaurants reported lower sales volume in March 2020, compared to the same month in 2019. 

The unfortunate reality is that the restaurant businesses may not be able to go back to “normal” for the foreseeable future. How to recoup the lost revenue, expand your restaurant business or simply staying in business becomes a top priority. Turning your business online is definitely one of the easiest ways to do so.

There are many different ways to put your restaurant online, here are a few common solutions and the pros and cons of each solution.

Partnering up with a food delivery service company

Companies such as Uber Eats and Door Dash have their own website and a delivery network. By partnering with these companies, your menu will be listed on their website, and customers can order delivery or take-out from your restaurant.

Pros:

  • Delivery network established.
  • Low implementation cost.
  • Quick implementation.

Cons:

  • Hefty services charges (15% - 30%).
  • Not flexible.
  • The quality of delivery service varies.

Partnering with these popular delivery service providers is a quick and easy way to be online. Your menu is now on multiple websites that have an existing customer base and can generate income instantly. However, these providers charge service fees that would eat-in to the already small profit margin of food. Many restaurants get around this by increasing the price of the menu on these websites, but consumers are not happy with this practice.

Both the restaurants and the consumers have reported that these third-party apps have a negative impact on the direct relationship between the restaurant and its customers.

White label Services

If you want more customization of your online ordering system but not entirely committed to building something from the grounds up, these services provide a cookie-cutter template approach to your website.

Pros:

  • Maintain control of branding, marketing.
  • Have direct relationships with consumers.
  • Quick turnaround time for website development.

Cons:

  • Monthly fees or commission-based.
  • Not fully customizable.
  • Limited theming option.

If you never had a website for your restaurant, this is a good way to get things going. It is a great way to have your own online presence and online ordering platform without the hassle of building it from scratch. The downside is that monthly fees are usually involved and due to the nature of how it is built, customization is less flexible.

Turn your existing website into an eCommerce platform

If your restaurant already has a website, it is a great investment to transform your website into an eCommerce platform. Think of it as opening a second location. Just as you have the ability to customize the decoration, the layout, and the kitchen production line, transforming your website into an eCommerce platform is like opening a new location but online.

Pros:

  • Highly customizable.
  • Unique to your branding.
  • Analytic information available

Cons:

  • Higher implementation investment.

Having your own website for your restaurant is the most ideal way of putting your business online. Not only do you get to pick and choose all the details of your website, but you also have the flexibility to do all kinds of marketing and promotions as you wish.

Add a new menu item, doing a promotion for this weekend, having a reward points system, and event manage your inventory. All these can be done on your own website. The flexibility of having your own website is significantly higher than the other options. The only downside is that it requires more investment upfront. However, by having your own website, you are no longer limited by the food items on your menu. Many restaurants, in order to increase revenue and sales, are also moving into meal prep, frozen food and many other options. These new items or a subdivision of your menu can be easily implemented if you have your own eCommerce website.

How to increase your sales with your eCommerce platform

Having an online presence is the first step. There are plenty of different marketing strategies you can apply to your restaurant to increase your sales. There are two major categories of how to utilize eCommerce platforms to boost your revenue.

Retain existing customers

We know that the restaurant industry is competitive. For average consumers, there are so many different options to choose from on a daily basis. How to increase returning customers is very important. Besides the product being attractive enough, here are some ways you can increase the chances of customers returning through your eCommerce platform.

  • Online Loyalty program - collect reward points when spending money online.
  • Limited time coupon - buy 3 items and get the 4th one free right now!
  • Email campaign - custom promo code for existing customers.

Whether it is giving free desserts to members on their birthdays, or let customers collect points to redeem for food, all these provide incentives for customers to come back. With the current situation, physical stamp cards or membership cards are not the best options. All these can be done on your own website.

Exploring new customers

If your restaurant is fairly new, or if you already have great programs to make sure your customers come back enough, you should look at options to gain new customers. Here are some ways your eCommerce platform can drive in new customers.

  • SEO - make sure your search ranking is high.
  • Social Media Integration - double down your platform with connecting with social media.
  • Get your existing customers to pull in new customers.

SEO is increasing your search rankings when people search for food online. For example, if you own a burger bar, and when a user searches for “Good burger in my neighbourhood”, the higher your website is ranked, the more likely someone will click into your website and give it a try. This is more important than many businesses take it to be. Just think about when was the last time you went to page 2 on Google.

Social media is also a great way to connect with people, have a social media presence, give incentives for your customers to tag your page or check-in at your establishment. Post good photos on social media. All these little things can make a huge difference.

If you have an eCommerce platform, you can generate custom promo codes for your existing customer base that incentivizes them to share it with their friends and family. For example, if you share the code with a friend and they used this code to order something more than $30, you get $5 off the next purchase. This is much harder to achieve with traditional stamp card options.

There are some traditional marketing strategies such as having live music, organizing events, organizing company events and working with other businesses. All these strategies would have an effect on your business, however, with the current situation of government regulations and the on-going pandemic, these strategies might not apply anymore. Online marketing and eCommerce platforms are one of the few options for restaurants to expand on their businesses.

The habit of eating has changed drastically over the last few months, this new trend of take-out and delivery will continue to grow in the foreseeable future. How to transform your business to accommodate the changes in the market is critical. If you would like to discuss more details about how a good website can help with your business , feel free to contact us. We are always looking to help businesses, big and small to reach their goal.