Second-party delivery: What it is and why you should embrace it
Published May 5, 2021
By Sean Kirby, Restaurant Strategy & Digital Transformation Services
As a restaurauteur, you’re very familiar with DoorDash, Grubhub and UberEats. But this article isn’t about third-party delivery, although it serves a critical need in the industry. Instead, we’ll focus on the often overlooked “middle child” of food delivery: the second party.
Here’s a definition:
Second-party delivery
The delivery of food and sundries by the customer (or someone designated by the customer) from the restaurant to the place of consumption.
Examples: take-out, pick-up, drive-thru, curbside
In a delivery world that currently revolves around third-party providers (and in a few cases first party, e.g., pizza delivery) these second-party party delivery modes need some love. That’s because, with the industry recovering from the pandemic, we’re still facing a continually evolving consumer who’s still cautious about eating in a restaurant or, after adapting to off-premise ordering, just no longer desires an in-restaurant experience. Enabling a delightful pick-up experience is a major differentiator right now and will be table stakes in the near future. Let’s consider a few of the opportunities here.
Online ordering
If you already have a restaurant online ordering system, great! If you don’t—you’re already behind. In either case, you should be offering pick-up options for online orders. And your online ordering solution doesn’t have to be a sophisticated native mobile application, either. It can be a simple website, as long as it sports responsive design so that it displays correctly on either desktop or mobile to provide the best experience for your users.
Related: It may be a new year, but digital ordering will continue to be crucial for restaurants.
As you implement or mature your online ordering experience, consider these factors:
- Generational differences – Have both an app and a website for ordering; millennials still prefer apps but Gen Zs avoid them. If your target consumer is multigenerational, then your online order channels should be, too. And if you really want to stand out, offer text-based or chatbot ordering, or even create an Alexa skill to place quick reorders.
- Third parties – Talk to any third-party marketplaces you do business with or want to do business with about having a pick-up mode. You’ll still pay a fee, but you won’t miss out on guests who use third-parties for a pick-up experience.
- Accurate quote times – Getting this right isn’t easy but can be a major factor in gaining both first-time and repeat business. Quote too long and you lose the potential conversion of the sale all together or risk giving a customer cold food (that shouldn’t be cold). Quote too short and you’ll be dealing with upset customers at pick-up and potentially jam up your pick-up location and frustrate customers in the presence of others.
And if quote times change significantly, update your customer and offer a discount on the current order and if possible, their next visit. It may not be the desired experience, but it may give you an opportunity. Technology can automate this process and even apply the proper remediation tactics based on a customer’s order history, loyalty status, etc.
Group ordering
Not necessarily a new concept, group ordering is something many brands have rolled out in their digital ordering experience; it allows multiple customers to be grouped into a single order. Group ordering is great for offices where anyone interested in a particular restaurant can organize a large order for many people to be picked up by one person. Market this feature for offices and neighborhoods alike, creating a foodpool of sorts where groups can rotate pick-up duty.
If you want to implement Group ordering capabilities, consider the following features:
- Multiple payments per group order
- Organizer funded option with per person limits
- Pick-up and delivery should be supported
- Offer driver discounts (for larger pick-up orders)
- Email and text-based group communications and order management
Pick-up experience
You’ll want to get this part right. Creating a poor pick-up experience for the customer not only could cost you repeat business, but the current sale and any meals already prepared.
These factors may seem obvious, but too many concepts fall short. Here’s how to optimize your pickup experience:
1. Start by clearly articulating the pick-up process at the end of the online order process (or be sure to share it with them if it happens to be a phone-in order). Ensure any third-party marketplaces also have this process and agree to share it as well.
2. Offer as many pick-up options as you can reasonably support. Traditional take-out is table stakes. Drive-thru (if you have one) and curbside (food delivered to car) are additional options that add an extra layer of convenience; it helps relieve congestion, too, which would otherwise risk customer satisfaction.
3. Create a “check in” process. Ideally, this would be supported on the original ordering channel and communicate with your staff in real-time. So, if they ordered on an app, the app should have the ability for them to check-in. If you have a system that supports this natively, perfect! If not, there are a variety of non-integrated solutions you can explore that use texting or tablets. Try to avoid making the customer call a phone number—but if that’s your only affordable option, roll with it.
4. For traditional take-out & third-party delivery, consider the flow of customers and drivers entering your restaurants. Having a dedicated path and pick-up location is becoming an industry norm these days. Some concepts are even going as far as separating the delivery orders from the pick-up orders to further avoid congestion. Consider a partial remodel to account for these spaces.
5. For group orders, ensure bags/boxes are labeled clearly with names and “# of #” numbering to ensure the customer doesn’t walk away without everything they ordered. There’s nothing more frustrating than getting home or to the office only to find out you’re missing your fries or drink.
Marketing
Order size and distance matters. When it comes to pickup, a person with a large order that would take longer to drive to than walk or use public transit to pick up isn’t your target consumer. Instead, to increase your pickup business, consider a concentrated campaign you can target to, say, singles (or married with no children) within 10 minutes of your location. Smaller orders make it harder to justify a delivery fee and people without kids are more likely to jump in the car to pick something up if it’s close to home.
Also, capitalize on the opportunity to demonstrate your values and serve your community. Create specials that cater to the residents near you. If your concept values active lifestyles and healthy eating, get creative with that. Mobile apps can be enhanced to tie into a smartwatch or mobile phone’s health monitoring system (steps). Incentivize pick-up orders that are done on foot over a certain distance (validated through the app). Or reward your local community if the local high school sports team wins a game.
If you have a loyalty platform, put your customer data to work to re-engage your pre-pandemic regulars and entice them back with a safe, pick-up (and dine-in) experience. Or get creative with your marketing efforts and launch a “Free Pick-up” campaign. We could all use a little humor these days and funny marketing is memorable marketing.
Bottom line: consumers are venturing out in varying degrees and, while delivery is here to stay and dine-in is ramping back up, the second-party, or pick-up, marketplace is the middle ground that you should double down on. And just as you did when the pandemic first hit, innovate, improvise, implement and iterate so you can create a stand-out experience that keeps ‘em coming back.
