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Survey Answers Some Key Third-party Delivery Questions


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How the various third-party delivery providers stack up is a big question in the restaurant space. According to a new cache of data from mystery shopping and survey firm SeeLevel HX, things are fairly even in an ever-changing segment of the industry.

Sponsored by Franchise Times’ sister publication Food On Demand, this is the first study of this kind to take a close look at the leaders in third-party delivery, with an army of 1,400 mystery shoppers across the country. SeeLevel also conducted a large consumer survey to see how users of third-party delivery engaged with those delivery providers.

Mystery shoppers in Atlanta, Los Angeles, Chicago, Boston and Dallas were tasked to record delivery times, order accuracy and more than 20 other metrics around third-party delivery.

One big talking point is the speed of delivery. UberEATS was the fastest at 35:31 minutes on average, followed by Postmates at 40:12 minutes, DoorDash at 41:01 minutes and Grubhub at 50:22 minutes.

“I hadn’t seen the data before this morning, but it’s kind of fun to come in first on the speed metric,” said Bowie Cheung, head of regional operations at UberEverything for U.S. and Canada, during a session at the 2017 Restaurant Finance & Development Conference.

SeeLevel asked consumers how long they were willing to wait, and more than half said they would wait up to 45 minutes, putting everyone but Grubhub solidly within consumer expectations on average.

While UberEATS was the fastest, it also missed delivery time estimates more than anyone else.

“It appears that there is some different strategies going on, there’s some that estimate high and deliver in a much shorter time, and there’s some that try to estimate exactly when it will come,” said Lisa van Kesteren, CEO of SeeLevel HX, during the RFDC session.

Cheung said for UberEATS, that metric showed how they were continuing to experiment.

“In a mature version of this world, because we’re all learning this, the green segment should be very large and should be the vast majority of the bar,” said Cheung.

He said one factor was the ability for restaurants to delay order times in peak times. If an order is delayed by the restaurant, it's done after the estimated delivery time has gone to the end diner. 

“That means the courier will pick up on time, but it’s not going to be perfect for the user experience because we told them it would be 30 minutes,” said Cheung. “I think we have to constantly work on the technology and the operational process to zero in on delivery times and deliver the right experience.”

Order times and ticket prices varied significantly from market to market. Atlanta had the longest average delivery times, as across the board orders took 45:41 to get to consumers. The fastest market, despite all the talk of traffic, was Los Angeles, where orders there got to consumers just seconds shy of 40 minutes. The highest tickets were seen in Dallas, where diners spent $24.23 on average.

Los Angeles also saw the lowest ticket prices at $19.38 on average. How exactly those numbers shook out is a bit of a mystery but may speak to the different restaurant landscapes across the markets in the mystery-shopping project. It seems that LA consumers order things from restaurants that are closer, and given the stiff competition, prices there are naturally cheaper. Dallas has seen a wave of growth, especially among high earners at major corporate headquarters, which may push that ticket price higher. And it’s pretty clear that Atlanta traffic is just awful.

“Regional strengths is not unusual in any company, particularly in a B2C environment because where you have to take into account regionalism, cityisms or townisms, all that makes a difference,” said van Kesteren.

Cheung said each market is a completely different challenge.

“The demographics are surely a part of it, too. Florida, for example, for us is a state that we see a lot of multi-entrée orders, we see a lot of chains,” said Cheung. “But other differences that really matter: traffic patterns, the density of a city, which impacts how fast your deliveries are, whether it’s a city with a lot of condos or apartments because that means some very different things for the courier.”

While Grubhub was slightly slower, with times driven up on average in tough traffic markets like Atlanta, it was one of the most cost-effective delivery providers. On average, Grubhub orders cost the least at $3.11, followed by DoorDash at $3.17, Postmates at $4.95 and UberEATS at $5.01.

In an exclusive data set for Food On Demand in the SeeLevel consumer survey, all of those prices were easy to pay. Consumers said that the $8 mark would be too expensive, $6 would be getting expensive but still doable and $3.60 is a “great deal.” No firm dipped below the $2 mark, where consumers surveyed said it would get questionable as far as quality.

And the chief question from restaurant operators is often, “How does this affect my restaurant?”

Other research from investment bank Cowen shows that delivery is largely incremental, and again, another Food On Demand exclusive data point from the SeeLevel survey shows that few at-home diners are replacing restaurant visits. Overall, 47.11 percent of diners said orders replaced cooking at home, 33.18 percent said it replaced take-out from a restaurant and just shy of 20 percent said it replaced a restaurant visit, meaning it’s 80 percent incremental.

“We consistently hear 70 to 80 percent range from folks that we partner with,” said Cheung.

For further insights and a deeper look at some of those exclusive questions, stay tuned to Food On Demand and get to the Food On Demand Conference March 19-20, 2018.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 
Nancy WeingartnerNancy Weingartner is editor-at-large of Franchise Times magazine and the editor of the Food On Demand media project. You can reach her at 612-767-3200 or at nancyw@franchisetimes.com.
Follow her on Twitter at http://twitter.com/nanweingartner.
 

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