How are restaurants riding the #orderdirect wave?

The restaurant industry has already seen a seismic shift due to the proliferation of food delivery startups. They were then hit with another shock - the pandemic. How did they deal with the challenges during these tough times?

What is the difference between last mile and hyperlocal delivery

Dunzo

The restaurant industry in India is undergoing a revolution – from the corner samosa shop to 5-star kitchens, all are moving online. While the offline walk-in experience is something that many establishments & customers hold close, one can’t help but notice the shift in the industry towards convenience & options ( via delivery services ) from the walk-in experience alone.

While many continue to crave the waft of delicious brownie kitchens & street Chinese, many now prefer a meal delivered right to their door. This has been further exacerbated in the last 2 years owing to the pandemic. Going out to restaurants has become a risky activity, given that you will be in an enclosed area without masks. Owing to this, restaurants have increasingly started depending on deliveries to stay afloat, just like customers, who are relying on the same whenever they want to eat out.

The Era of Digital-Enabled Kitchens

So what does a digital-enabled kitchen mean? Buying food porn NFTs, or serving hot dishes in the metaverse? Maybe a sight we’ll soon see, but for the average food connoisseur, it translates to accessibility. Can I have this burger in my hands right here in a few minutes? Can I choose not to drive down through the hustle-bustle of traffic, avoiding a drag on my time? Can I simply tap away on my phone and arrange for the food to arrive effortlessly? The answer, and the norm, is yes. Food delivery services of today have made all this possible.  

With the proliferation of digitization of restaurants and kitchens and the increased focus on deliveries, naturally firms like Zomato and Swiggy, which helped restaurants reach out to customers, and fulfil their orders, also became increasingly powerful. Currently, in the food delivery market, >70% of the business is through platforms like Zomato and Swiggy. 

No free Lunch

But rarely is the lunch free, or the table set to benefit the many. Restaurateurs have had to face the music while relying on these firms for business:

  • High commissions, running margins aground – Often platforms take a big chunk of the sales that arise through their platforms, leaving peanuts, if any, for the folks that offer the crafts. These commissions can be as high as 30% in some scenarios, and only seem to be getting higher by the day!
  • Unsolicited Discounts – Platforms run promotions and discounts for the customers, often at the expense of the restaurants. This further eats away into margins.
  • Inaccessible Customer Data – Just as experience holds utmost importance to any restaurateur, or the control of, the same holds true for their customer base. Knowing & understanding their customers is key to unlocking growth. If one doesn’t know who they’re selling to, how does one optimize?

While the online food ordering business as a whole is growing steadily (9% YoY growth estimated till 2025), due to these issues, similar growth isn’t translating to the restaurants. The wafer-thin margins they see at the end of the day leaves them anxious and insecure about their future. 

To address this, NRAI (National Restaurant Association of India), representing the interests of over 500,000 restaurants across India, stepped in with some measures. Following suit for the #logout campaign in 2019 (to protest against the deep discounting by platforms), a new #orderdirect campaign was launched in May 20201, with the aim to reduce dependence upon monopolistic platforms, and to enable merchants to develop their own demand/ordering channels. They decided to manage their deliveries through delivery services ( 3PL partners like Dunzo ). Ranging from orders on calls & WhatsApp to sophisticated online ordering websites & apps, many restaurants fortified their self-sustenance capabilities.

How does this benefit restaurants?

  • Gross Margins – There is no need to share 30% of their margins with platforms anymore, with aggregators charging much less
  • Discounts – Ownership of discounts now completely lies at the restaurant’s end. They can choose the when, how much and for whom as they wished
  • Customer Data – Aggregators have a data sharing policy with restaurants, and hence restaurants know exactly who their customers are and can run marketing campaigns using this data directly

While demand and supply both seemed to be coming into place, a bridge to them over the chasm of logistics was much needed. An enabler, to eliminate the hassle of hiring trustworthy delivery personnel, procuring & maintaining vehicles, ensuring on-time delivery to customers, with reliability. In came Dunzo for Business, providing on-demand hyperlocal delivery to fill in this gap. Merchants no longer need to worry about delivering their goods to customers, maintaining a bike, or hiring a delivery person – all of this became accessible with a few clicks!

Dunzo for Business enables cost-effective hyperlocal deliveries for 30000+ businesses across the country – both big and small. We deliver food, groceries, medicines, fruits, vegetables and much more at lightning-fast speeds, at the best prices while ensuring a world-class customer experience. We are handling 20000+ deliveries daily across Bangalore, Mumbai, Delhi, Hyderabad, Chennai, Pune, Gurgaon and are expanding rapidly! Visit our website, or email us at dunzoforbusiness@dunzo.in for all your hyperlocal delivery needs.

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