First-Party Ordering is Surging: Why Restaurants are Taking Control Back from Delivery Apps

For years, restaurants faced an uphill battle to encourage customers to order directly through their own websites and mobile apps. Third-party platforms like DoorDash, Uber Eats, and Grubhub offered unparalleled convenience, expansive selections, and powerful marketing reach. But recently, the tide appears to be shifting dramatically toward first-party restaurant ordering, signaling a profound shift in the restaurant industry's digital landscape.

Why First-Party Ordering Matters for Restaurants

Restaurants have long preferred first-party ordering channels—meaning when customers order directly through the restaurant’s website or app—for several important reasons:

• Higher profitability: Direct orders typically cost restaurants less, eliminating hefty third-party commissions that often eat significantly into profits.

• Data ownership: Restaurants retain valuable customer data, enabling personalized marketing strategies, targeted promotions, and vastly improved customer experiences tailored to individual preferences.

• Enhanced customer loyalty: Direct ordering channels often integrate sophisticated loyalty programs, incentivizing repeat business, fostering deeper customer engagement, and promoting long-term customer relationships.

• Control over branding: Restaurants can fully control the digital experience, branding, and customer interaction, ensuring that their brand identity remains intact and strong.

In fact, according to a recent report by tech provider Qu, 40% of limited-service restaurant brands believe first-party digital ordering will drive the most revenue growth this year, significantly outpacing other methods such as catering, on-premise dining, drive-thrus, or even third-party platforms.

A Turning Point Post-Pandemic

During the height of the COVID-19 pandemic, third-party delivery platforms surged as they became lifelines for restaurants needing online customers. However, as the industry adapts to a post-pandemic environment, restaurants have seen significant returns on their investments in direct ordering capabilities. Brands are enhancing their first-party experiences through innovations such as integrated loyalty programs, user-friendly mobile apps, customized ordering options, and enticing pricing structures.

Thanx, a popular restaurant loyalty provider, recently reported that nearly two-thirds of its restaurant customers are experiencing faster growth in first-party ordering compared to third-party platforms. Aaron Newton, Thanx's Chief Data Officer, highlighted that "loyalty programs and exceptional first-party experiences" are pivotal in driving this change, indicating a clear trend towards businesses prioritizing and reaping the benefits of direct consumer engagement.

Consumers Increasingly Favor First-Party Ordering

Recent data from TouchBistro underscores a clear consumer preference for first-party channels: 31% of consumers say they prefer ordering through a restaurant’s app or website versus just 13% through third-party services. But why is this shift happening now?

1. Better Pricing and Lower Fees: Inflation has sensitized consumers to the hidden costs of third-party delivery—high service fees, marked-up menu items, and mandatory tips. First-party channels offer lower menu prices, significantly reduced fees, and often additional rewards through loyalty programs, providing superior overall value.

2. Improved Ordering Experiences: Restaurants have significantly enhanced their digital ordering platforms, making first-party ordering more intuitive, rewarding, and convenient. Consumers now enjoy seamless transactions, personalized promotions tailored to their ordering habits, and simplified repeat orders, making direct ordering increasingly attractive.

3. Value of Loyalty Programs: Loyalty incentives resonate deeply, providing tangible benefits that third-party platforms struggle to match. Free meals, exclusive discounts, and special offers encourage consumers to consistently order directly from the restaurant, reinforcing brand loyalty.

4. Transparency and Trust: Ordering directly from restaurants fosters transparency around pricing and menu accuracy, increasing consumer trust. Customers know exactly where their money is going, often preferring to support restaurants directly rather than through intermediaries.

As one consumer succinctly put it: “By the time you’ve paid the service fee, delivery fee, and driver tip, it's far less costly to order directly from the restaurant and pick it up yourself.”

Third-Party Platforms Aren’t Disappearing, but the Balance is Shifting

Third-party delivery apps are still significant players. Their expansive offerings, including combining restaurant orders with grocery deliveries and offering diverse cuisines under one platform, remain attractive to consumers. However, even these platforms acknowledge the growing importance of first-party ordering. DoorDash and Uber Eats often compete intensely for first-party delivery contracts, recognizing the strategic importance of these arrangements for sustained growth. Uber’s CEO Dara Khosrowshahi openly describes first-party ordering as "one of the fastest-growing parts of our business," indicating this is not merely a passing trend but a fundamental industry shift.

How Sauce Helps Restaurants Win with First-Party Ordering

At Sauce, we understand the pivotal shift happening in restaurant ordering. Our platform empowers restaurants to harness the full potential of first-party ordering with seamless integrations, premium user experience, and powerful data analytics capabilities. By partnering with Sauce, restaurants can:

• Enhance Customer Relationships: Build and deepen customer loyalty through targeted promotions, personalized offers, and rewards programs.

• Reduce Dependency on Third Parties: Take back control of the ordering experience, significantly reducing commission costs and increasing profitability.

• Gain Powerful Data Insights: Leverage comprehensive analytics to better understand consumer behavior, improve operational efficiency, and optimize menu offerings based on real customer feedback and data.

With restaurants increasingly recognizing the advantages of direct ordering, now is the optimal moment to optimize your digital presence and capitalize on this growing trend.

Discover how Sauce can help your restaurant thrive by making first-party ordering simple, profitable, and powerful.

Visit www.getsauce.com to learn more about how we can help your restaurant capture the full potential of first-party digital ordering today.