As Halloween approaches, we ask when 3rd party apps are a caterer’s treat, and when a cruel trick?
In a recent article on eater.com restaurant owners discussed the pros and cons of using third-party apps for catering.
While some people found services like UberEats and GrubHub to be a quick and easy way to increase order numbers, others complained that operational headaches made processing the orders difficult, while high costs meant profits didn’t match the rise in order numbers.
As Halloween approaches, we thought it would be a good moment to look at the case for third-party apps in more detail. When are they a caterer’s treat, and when a cruel trick?
Treat - Fast access to the market and delivery network. Get started quickly with a reliable, professional system.
Trick - Adding multiple apps means adding workload, as each one requires software and hardware. The extra workload processing orders from different channels can mean more staff are needed.
Treat - A professional app for customers without expensive development costs associated and ongoing security concerns
Trick - While apps involve a degree of commitment from customers, they are also increasingly seen as inconvenient - limited phone space and improved web design capabilities make mobile-optimised online experiences a more convenient option. In a recent article for Foodserviceandhospitality.com, Erik Thoresen, principal with Technomic in Chicago said:
“We expect to see more operators moving away from apps, to websites that mimic the app experience on phones. With the approach, the interface is more accessible, less costly, more lightweight and easier to manage because consumers don’t have to download updates."
Treat - Access to stable and well designed system that would be impossibly expensive to develop for many small caterers. Instant access to a delivery team that might otherwise require purchase of a van and hiring staff.
Trick - Commision on UberEats and GrubHub orders can be as much as 30% of the order value, counteracting the cost benefits of access to an extensive delivery network.
A recent blog from Alex Turnbull at Groove offered sage advice on this topic for any business. He wrote that most articles with click-batey lists about ‘10 reasons your company MUST do x’ are not helpful at all. There are only two things that every business needs to do to survive:
Deliver something that’s valuable to some people or organizations
Make a profit from it
Third-party apps can be helpful achieving the first of these, but fall short of the crucial second step.
Treat - Quick route to market that opens businesses up to a wide range of customers.
Trick - You may increase your sales and customer base with a third-party app, but you don’t own the customer. More than in the B2C market, caterers selling to companies need to really nurture customer relationships. In outsourcing certain functions to a third party app, the customer relationship is also outsourced.
Our blog on choosing the right system looks at this in more detail, showing that some caterers getting started may find marketplaces to be a quick route to market and an easy way to get their name out there. Some of our clients have used them in their early days of corporate catering, knowing that the solution wouldn’t be long term.
Treat - A system that is scalable and will handle increased order numbers without a problem
Trick - Most marketplace systems offer a slick ordering experience that will increase customer orders, but they don’t then provide the back office control to handle that expansion. There is no point in increasing order numbers if the system in place does not help to meet the growth in demand.
Are third-party apps worth it?
This blog has looked at the pros and cons of using third-party apps to reach customers. We have known caterers to be very happy with them, but normally as a short-term solution and this is the key to deciding whether or not they are appropriate - knowing your needs.
As we wrote in our recent blog, spending time choosing a system that will work for your catering company is an investment: when you’re swamped with work, looking for software can feel like wasted time, but get it right and it’ll pay off in revenues down the line.