Food FactsPosted on 16.06.2015

Why Restaurants Shouldn’t Fear Online Delivery

Almost a year ago we looked at why fast food chains are starting to shift towards online delivery in Australia.

Now we want to see whether joining an online takeaway aggregator has brought further success to these brands (McDonald’s and Red Rooster), but also whether a Menulog listing has aided the smaller, local players.

Yet what began as a case study of online delivery platforms and their effect on restaurant chains morphed into something different altogether.

As it turns out, the data we found has mirrored the changing tastes of Australians.

Pizza’s Growing Slice Of The Online Takeaway Market 

Let’s talk about one of our national pastimes—ordering a pizza for dinner.

Australia’s devotion to takeaway pizza is unfailing, but online consumers are the Holy Grail for pizza chains in a highly competitive and constantly evolving takeaway industry.

While the pizza royalty of the 1990s (Domino’s and Pizza Hut) remain engaged in price wars to offer the cheapest pizzas to consumers, Australian-owned pizza chains Eagle Boys and Pizza Capers have been particularly successful in adapting to changing consumer demands.

Pizza Capers entered the market in 1996, focusing heavily on quality ingredients and a varied menu—a far cry from the classic junk food options of the 90s.

via Pizza Capers

Pizza Capers is riding the combined waves of sophisticated consumer taste and the desire for time-saving technologies.

In fact, Pizza Capers stores experienced a 107% upswing in orders* from their first months on Menulog to the last month of 2014.

While Australians have always had a love affair with takeaway pizza, the affection has been transferred to the gourmet, artisan-style offerings from chains like Pizza Capers.

This transition was noted by Eagle Boys. Eagle Boys has managed to adapt to this growing demand for varied and health-conscious takeaway choices, introducing gluten-free, vegetarian and low-fat options, as well as the more gourmet selection known as “EB’s Finest”.

These are, of course, alongside their classic flavours in the hopes of maintaining their enduring fans as well as creating new ones, although much of their public campaigning stresses the fact that their menus are new and improved.

But why would Eagle Boys turn to a platform like Menulog when home delivery has always been the very crux of their business?

Because online ordering is the new frontier!

Cast your minds back to a time when you had no choice but to call the pizza place to order! It’s infinitely easier to click a button or two instead of dealing with bad reception, misheard orders, and being put on hold every Friday night in takeaway rush hour.

As explained by Menuloggers:

Basically, unless you’re in the online delivery game, you’re not going to keep up.

The best way to attract a constant flow of customers is to be present on that list of local restaurants.

Google search results work in a similar way, with competing brands and companies vying for that elusive top spot on the first page. For good reason – 2014 statistics showed that 90% of users clicked on the first 3 results of their Google search results.

Although Eagle Boys has maintained a presence in Australia for well over two decades, the pizza sector is more competitive than ever.  This chain’s ability to adapt to the takeaway industry’s technological advances has rewarded them with a massive order increase of 348% when comparing each store’s last month of 2014 to initial months on Menulog.

Local Success For Global Cuisines  

Enough about pizza, though. The statistics started to get really interesting when we looked at which local restaurant chains were benefiting the most from turning to online delivery.

Menulog data shows that the chains that have been most successful in increasing orders through Menulog cater to Australia’s love of foreign fare.

Despite the current woes of Misschu’s wildly popular Vietnamese tuckshops, orders for the Sydney locations increased by 93% in December 2014, after strong first months for each store respectively.

Adelaide’s Red Rock Noodle Bar chain enjoyed a 76% increase.

And Sydney’s Doytao Thai restaurants saw a huge 376% increase in orders.

As a 2014 Ibis World report showed, Australia’s fast food industry was once dominated by hamburgers and fries, but it has clearly shifted to serve the current Australian public that is not only more health-conscious, but also increasingly interested in what the report calls “ethnic fast foods” like Mexican and Thai.

Let’s recall Australia’s 5 most popular meals of 2014…

More importantly, the Ibis World report reflected our own data by stating that this shift away from traditional fast food has seen these smaller players in the industry becoming strong competition for the bigger brands.

Fast Food Chains Take A Piece Of The Online Pie

After seeing how much an online ordering platform can benefit a local restaurant chain, it’s time to turn to the bigger players in the market.

It seems as though Red Rooster and McDonald’s have noticed the quiet success of these local takeaway restaurants listed on the Menulog website and wanted their own piece of the (home delivered) pie.

Recognising that “online is the future”, Red Rooster embraced online delivery with Menulog in 2014.

The drive-through restaurant concept is no longer ideal, especially for congested city areas. Regardless of how fast your food is cooked, the time wasted in a queue of bumper to bumper cars could be better spent at home with the help of online ordering.

With this in mind, the first Red Rooster store (in Baulkham Hills) launched on Menulog in July 2014. This single online channel allowed Red Rooster to experience growth with an untapped target base.

The impressive number of online orders demonstrated that partnering with Menulog was a commercially viable endeavour. A further 6 Red Rooster stores turned to Menulog in late November and December.

Similarly, the introduction of McDelivery in Australia was an exciting experiment that McDonald’s and Menulog embarked upon together in 2013.

McDonald’s home delivery might already have a long history in other countries around the world, but for Australian cravers of late night Big Macs, it has certainly been a breakthrough.

In the 20+ years since the first McDelivery (pioneered by the USA of course), the popularity of home delivered McDonald’s has really boomed in areas of Asia and the Middle East (usually in highly populated areas where traffic is a nightmare).

30% of Egypt’s total McDonald’s sales come from deliveries, for example, and 24 hour McDelivery services have been operating in Hong Kong, South Korea, Singapore and China for several years now.

Japanese McDelivery via Kozo Tada

We are now 1 of 26 McDelivery countries, and the novelty is seemingly yet to wear off.

In part, the success of these big chains has occurred because they strive to give the people what they want.

And right now, the people want all the restaurants in their area listed in one place for their convenience.

Give The People What They Want

As previously mentioned, the success of restaurant chains turning to online delivery channels goes hand in hand with the evolving needs and palate of the Australian public.

For example, young Australians might still be fixated on pizzas and burgers as takeaway of choice, but the older demographics desire food with more substance.

So how do the established fast food brands (McDonald’s, Red Rooster and Eagle Boys) deal with this?

They constantly change their menus to keep up with this desire for healthier fast food.

Red Rooster introduced healthier options to their menu, as did Eagle Boys, and McDonald’s now offers a range of salads and grilled chicken choices.

via McDonald’s Australia

How do they possibly combat Australia’s obvious infatuation with international cuisine (and simultaneously become a competitor in this popular category)?

They have all introduced a variety of global flavours to their menus. Red Rooster offers a Mediterranean-style meal, Eagle Boys has a smattering of pizzas inspired by the foods of other lands, and McDonald’s introduced their World Cup range of burgers inspired by the competing countries last year.

Even ubiquitous trends in popular culture are addressed.

The Corner is the most recent McDonald’s response to Australia’s pervasive hipster culture and growing appreciation for quirky one-off cafes, and the chain has even introduced a build your own gourmet burger service, called Create Your Taste, available at select stores around the country.

via The Guardian

Red Rooster is also upgrading their restaurant interiors, undoubtedly to reflect their changing menus and to turn their branding away from the fast food counter days of yore.

Most importantly, much of the success of these restaurant chains can be attributed to their foresight in turning to online takeaway.

So What’s Next?

Given that pizza places and Asian restaurants fill the online takeaway market as the traditional fast food brands squeeze their way in, it is interesting to note that a home-delivered Pad Thai or Indian curry is now considered a pretty standard takeaway meal (no French fries in sight!).

Where ‘takeaway’ and ‘fast food’ were once inseparable, these concepts have slowly morphed to represent food that is simply ordered online, home delivered or food that you haven’t cooked yourself.

But regardless of what constitutes ‘takeaway’ (now and in the future), there is no denying that it is increasingly a part of our busy everyday lives.

The future success of restaurant chains in Australia’s highly competitive takeaway industry will depend on their willingness to embrace the technology that is indispensable to efficiency-driven consumers of 2015, and indeed the technology that will emerge in future.

Right now, the move to an online takeaway platform is simply keeping up with the herd.

Online delivery has revolutionized the way we work, shop, communicate, and the food industry is no exception. If anything, our dependence on the Internet will grow, and the need for physical shopfronts will wane (e.g. look at the way online grocery shopping is beginning to take off).

Have the restaurant chains, in this case, study been successful in using Menulog?

Yes.

However, as Australian tastes and trends (culinary or otherwise) continue to change, the sustained ability to adapt will be a restaurant chain’s key to success.

What do you think lies in store for the online takeaway industry?

*Please note that we calculated these results by taking the average total orders of each restaurant’s first 30 days on Menulog and comparing them with the average number of orders from the last 30 days of 2014.