77 – Online Ordering Frenemies – How online orders is disrupting the Restaurant industry

This podcast started with an article in the Sydney Morning Herald that described Menulog as “the business partner he never wanted.”

We look at Restaurant Brandjacking and websites set up by online aggregators which look like the web.

Adwords Arbitrage. We discuss how restaurants can advertise on Google Adwords and get clicks to their platforms, not your website.  We talked about this with Kyle Welter who used to work at Google and understands how big companies use this practice.

We discuss how the margins that restaurants are charged by online aggregators and how some restaurants are dealing with the large fees that they are charged.

How does the restaurant circle of life work and how can you avoid being of the restaurants that fails?

Domain squatting – We have issues with big companies like Menulog registering domains ‘on behalf’ of restaurants. This becomes their property and they will build one of their websites, which don’t have your phone number and don’t have direct contact details for your Restaurant. Each order coming from that website is charged the commission that they normally charge.

Variable commission campaigns – Restaurants are now getting a better placement in the online aggregator platforms by paying higher commission. We have seen this with Grub Hub in the United States.

Vertical integration risk – Are the delivery companies like Uber Eats and Deliveroo looking to cook their own food? Deliveroo Editions is just one step away from Deliveroo cutting the Restaurant out of the entire picture for their business.  As they look to increase profit margins, I think that it is a really big risk for restaurants. The restaurants are low cost with very low property costs.  If they learn to cook, they could be very difficult to compete against.

Franchise restaurants are starting to look at delivery options and online ordering aggregators. This may squeeze out the small restaurants that were the traditional customers of the aggregators.

Is your brand at risk from other companies?  Brand risk is increasing as big companies work to build their brands, not yours.

Risks to the restaurants when using delivery companies include the loss of control over the time and delivery service that is provide. We discuss some of the interesting stories about delivery riders from the big delivery companies.

The risks for Uber Eats and Deliveroo include whether the deliver rider is an independent contractor or an employee.  There will be more scrutiny on this, especially around the minimum wages.  What is Uber Eats long term plan – we discuss their race against time.

Are battery-powered delivery scooters a viable option for Restaurants to build out their own delivery service?

Have you thought out about pick-up only services for your restaurant? It is the perfect accompaniment for a restaurant with spare kitchen capacity.

Are you using a Restaurant loyalty campaign for your online orders?  Our Free Restaurant OnLine Ordering system (FROLO) provides a built in loyalty campaign that works really well to increase the frequency of customer purchases.  FROLO supports a receipt printer, SMS notifications and even a mobile orders management system.

Drive your customers to Order Direct and Save!

It’s good for customers and great for you! 🙂





Right click here and save-as to download this episode to your computer.

You don't want to be the best restaurant that no one has ever heard of.

There are 2 types of Restaurant Website visitor – those who know your Restaurant and those who don’t. If your website isn’t set up properly, your regular customers will find your site, but new customers will be going to your competitors down the road.

Our free 7 point audit is designed to help you understand if your website is is bringing in the new customers that your Restaurant deserves.