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Dec 20, 2018

Are 3rd Party Restaurant Apps Too Restrictive?

Darren Seifer, Executive Director, Industry Analyst ;

Foodservice

@NPDSeifer

I just ordered lunch using the Seamless app on my phone and it got me thinking – is this helping the restaurant or could they benefit from having their own app? I checked out some insights from our report, Delivering Digital Convenience, and the answer seems yes and no.

It’s a good thing this restaurant is going digital in the first place. In a low- to no-growth restaurant world, digital ordering has been a bright spot – it’s up more than 20 percent between 2013 and 2017 with forecasts expecting a similar growth rate through 2020.

What separates restaurant-branded apps versus third-party apps is how they’re used. Most common uses for apps like Grubhub/Seamless, UberEATS, and DoorDash, for example, are looking up items, paying for meals, and checking prices. Branded restaurant apps, however, see special offers and loyalty rewards as their top uses.

The restaurant I ordered from isn’t able to offer me any deals or provide me with loyalty points so are they missing out? In one sense you can say yes because I frequently order from them and I’d like to feel rewarded for my loyalty. Here in New York City there are thousands of places for me to select and there’s no mechanism to generate a repeat trip. However, this a small independent operator and they likely don’t have the means to hire developers to create and maintain their own app.

For the smaller and independent operators, 3rd party apps level the playing field and give them a piece of the growing digital ordering sector without having to make expensive investments in their IT infrastructure. These restaurants might not have the flexibility with the apps that they want but at least they still have a foot in the game like the larger operators do.

And if I’m being totally honest, as long as this restaurant keeps the menu items consistently delicious and keeps delivering them on time, they have my loyalty!


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