Win market share back from third-party ordering apps
Joe Rosemyer took over ownership of Slice Pizzeria in 2019, the same year a novel app for food delivery automatically added his and other restaurants to its third-party ordering platform. After three months of hosting the Utica, New York-based pizzeria’s menu online, the delivery business reached out with a proposal: If Slice Pizzeria wanted its products to continue being visible to potential customers, the food-delivery app was going to take 30% of sales.
Rosemyer says he was one of the area’s first pizzerias to be featured on the app as the COVID-19 pandemic took hold. The placement “exponentially helped business” as patrons who previously dined at restaurants turned to takeout and delivery. But in addition to taking a hefty percentage of sales, these delivery apps retained customer data that Rosemyer wanted to access himself.
“They’re learning when the customer orders, how they order, how much they order – all those things that you should understand about your customer,” Rosemyer says. “They retain that data, and at any point they could decide, ‘OK, this is what we’re charging now,’ and then they’ve got you.”
Eventually, Rosemyer was able to negotiate a flat monthly fee with a delivery service, which he has added as an administrator to his website’s online-ordering platform. “I’m a pretty high-volume pizzeria, so once they saw my numbers, I was able to renegotiate with them,” he tells Pizza Today. “I told everyone: ‘All right, this is where we’re ordering from now.’ It’s less fees, and I’m able to stay on top of things better.”
Since more than half of Slice Pizzeria’s business comes from online ordering, Rosemyer says the switch was equivalent to “tens of thousands of dollars a year that went directly back into the business.”
Cut the Cord
The pandemic was equally transformative for off-premise sales at Woody’s Wood Fired Pizza in Golden, Colorado. Though as luck would have it, Woody’s was in an improved position when restaurants were forced to switch to 100% takeout and delivery. Operating out of a historic building, pizzeria owner Jon Bortles’ hands were tied when it came to physical expansion. So, in 2019, he had a shipping container converted into a dedicated takeout and delivery kitchen featuring a walk-up window, rooftop garden and solar panels behind the restaurant.
“I won’t say that we were unscathed by COVID by any stretch of the imagination, but we were fortunate enough to have already implemented online ordering and some of these third-party partnerships for delivery,” Bortles tells Pizza Today. The shine dulled, however, when third-party delivery drivers would show up without a hot bag, or the pizzeria would receive a call complaining that the pizza they’d ordered through a delivery app arrived an hour late.
Bortles would take his concerns to the delivery companies and occasionally get refunds, but that did not solve the problem of unhappy customers, despite the staff at Woody’s fulfilling their end of the bargain.
“It became a full-time job, and quite honestly a distraction for the management team to constantly be dealing with issues. … It just became a logistical nightmare,” Bortles says, adding that after experimenting with exclusively using different apps, Woody’s ultimately decided to abandon that sales channel altogether. “At the end of the day, it just wasn’t worth it to us to jeopardize our product and our reputation. … We just completely got rid of all the third parties and do local delivery with our drivers here in town.”
Once restaurants re-opened to in-person dining, Bortles says he decided to focus on staff Woody’s can hire, train and discipline as needed (see “Launching a Fleet” below). He admits that delivery sales have gone down as a result of the decision, but he feels food quality is better because the restaurant limits delivery distance as well as the number of orders drivers handle at a time.
Launching a Fleet
When Jon Bortles decided to remove Woody’s Wood Fired Pizza from third-party delivery platforms, he faced another challenge: how to deliver pizza. It turns out that Woody’s existing insurance policy did not exclude delivery, and the company’s insurance broker confirmed that it was safe to proceed.
The first step: finding delivery drivers. In the early days, Bortles says servers and bussers were cross-trained as delivery drivers. Today, he hires drivers specifically for that role. “Like anything in the pizza business, it comes down to hiring the right people and training the right people,” he says.
Woody’s runs background checks and conducts motor vehicle inspections before hiring drivers, who are tipped employees that earn an hourly wage and maintain their own auto insurance. “It’s beneficial to have folks who are covered under their own personal policies for their vehicles. It’s another layer of accountability, protection for our insurance company,” Bortles says.
After initially employing drivers from 11 a.m. until 11 p.m., Woody’s management team decided to restrict delivery to the busiest time of day: 4-8 p.m. “They come in, and they’ll help with general takeout, answer a phone or do some prep or fill boxes. And then as soon as they get an order, they’ll be dispatched from our kitchen,” Bortles says.
Since the drivers are employees of Woody’s, Bortles has a vested interest in their safety – especially during the Colorado winter. On nights when the roads are icy and hazardous, he has been known to shut down delivery operations altogether. When inclement weather is in the forecast, he encourages customers to order take-and-bake pizzas, adding, “That way, nobody has to go out when the weather is bad. … It’s just not worth it.”
Promoting Direct Orders
During the transition, Woody’s utilized e-mails, marketing and social media to let customers know to order directly from the restaurant. The company temporarily offered a promotional period of free delivery, though today delivery consumers pay a $4.99 delivery fee to reimburse drivers for gas.
Additionally, Woody’s offers a loyalty program where patrons earn 25 points for joining and one point for every dollar spent. When customers spend $100 with Woody’s, they get $10 to use on their next order.
“When they order online, it lets them know how many points they have and when they are due for a reward,” Bortles says, adding that loyalty club members get birthday discounts and are eligible for other special promotions.
New York-based Slice Pizzeria still does good business through third-party delivery apps, but owner Joe Rosemyer makes a point to send customers to his website, encouraging them to order from him directly. “It’s branded on my boxes, and it’s on every social media post,” he says. “I’m constantly telling people about the website and the advantages. Any advertising I’m doing is all about the website.”
Rosemyer also promotes a feature for consumers to track their orders from start to finish, adding that customers who order from him directly benefit from one driver per order. Slice Pizzeria also offers a loyalty program, which his online delivery partner manages along with targeted marketing emails.
An unexpected benefit of receiving direct orders online as opposed to old-school phone calls? “People don’t want to talk on the phone,” Rosemyer says. “You might be embarrassed to order anchovies. People clown you for ordering pineapple.”
KATE LAVIN is Senior Editor at Pizza Today.
