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A majority of restaurant consumers are regularly placing online orders during the COVID-19 crisis, <a href="https://www.restaurantdive.com/news/25-of-diners-place-online-orders-multiple-times-a-week-study-shows/582834/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">according to a report from Toast, which surveyed over 700 customers</a>. Twenty-nine percent reported that they place an online order a few times a month, while 25% report they do so a few times a week, 22% do so once a week and 4% ordered online multiple times in a day. In fact, only 14% of guests did not place an online restaurant order in the past month.&nbsp;<a href="https://upserve.com/restaurant-insider/how-restaurants-have-been-affected-by-covid-19/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">Another recent consumer report from Upserve</a> shows a nearly 783% increase in online order sales volume growth during the crisis as of July. This number is expected to grow as the weather starts to cool and outdoor dining options become more limited.&nbsp;<a href="https://www.newsbreak.com/news/1610398151690/shake-shacks-digital-sales-doubled-in-q2-but-same-store-sales-declined-sharply?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">Shake Shack</a> reported that its digital sales represented 75% of overall sales during Q2, while <a href="https://www.restaurantdive.com/news/wingstop-reports-best-quarter-since-ipo-in-2015/582496/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">Wingstop</a> garnered 64% of its sales through digital. <a href="https://www.qsrmagazine.com/fast-food/yums-digital-business-has-gained-over-1-billion?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">According to QSR Magazine</a>, Yum! Brands saw $3.5 billion in digital sales in Q2, “a 40% year-over-year boom that equated to a $1 billion step-up from 2019 levels.” Those gains can be attributed to an aggressive pivot toward off-site sales. “Yum! now has 34,000 restaurants offering delivery globally, up from 30,000 this time last year, and witnessed its digital sales mix cross 30% of system sales — a 15-point improvement.”These trends aren't likely to change anytime soon: Toast found that 27% of guests said they would order takeout more or significantly more while 23% of guests said they would order delivery more or significantly more compared to before the pandemic.&nbsp;In response to this growing demand, <a href="https://1851franchise.com/how-have-franchise-brands-pivoted-during-the-covid-19-crisis-2712683#most-recent">franchisors are doing everything they can to keep up with the times</a> and optimize their model for off-premise services. Survival tactics include <a href="https://1851franchise.com/why-limited-menus-may-be-the-future-franchisees-want-in-a-post-covid-world-2713385#home">paring down their menus</a>, stepping up their social media presence, turning to third-party delivery, adding in-house delivery and selling grocery items from their restaurants.According to the Toast report, 34% ordered takeout and 29% ordered delivery through a restaurant's native app at least a few times a month. Comparatively, 21% and 22% said they used third-party apps for pickup and delivery, respectively, during that same time frame.The fact that Toast's report shows more consumers making those orders through brands' native channels versus third-party channels is good news for brands. <a href="https://tcbmag.com/restaurants-struggle-with-delivery-fees-during-pandemic/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">In addition to avoiding notoriously high commission fees</a>, first-party delivery allows brands to keep and control those customers' data and better target them with more personalized offers while driving loyalty. As consumers gravitate more toward digital ordering opportunities, whether it be for delivery or takeout, in-house delivery is a way for franchisors to maintain that direct-to-consumer connection.&nbsp;For example, out of all Yum! Brands, <a href="https://1851franchise.com/yum-brands-records-40-year-over-year-increase-in-digital-sales-2713639#franbuzz">KFC has seen the most substantial gains</a>, recording its highest average sales per store in the brand’s history in May and finishing Q2 with 7% same-store sales growth. This is largely due to KFC’s pre-pandemic launch of a direct pickup and delivery model, which the brand has leaned on heavily in recent months. Recently, Taco Bell announced that it would be expanding its digital properties and rolling out a new loyalty program, <a href="https://www.tacobell.com/register?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">Taco Bell Rewards</a>. McDonald’s also has <a href="https://seekingalpha.com/article/4354158-mcdonalds-corporation-mcd-chris-kempczinski-presents-evercore-isi-virtual-consumer-retail%5C?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-foodservice-franchisors-are-keeping-up-with-the-growing-demand-for-online-ordering-2713818" target="_blank" rel="nofollow">plans for expansion when it comes to its loyalty program</a>.&nbsp;Still, third-party delivery shows no signs of going away. According to the Toast report, guests use DoorDash more than other third-party platforms, with 42% reporting usage of the app in the past month. This is followed by Uber Eats, at 34% and Grubhub at 33%. In June, <a href="https://1851franchise.com/what-grubhubs-73-billion-sale-means-for-the-third-party-delivery-market-2713285#home">GrubHub announced it would merge with Just Eat Takeaway</a>, a third-party delivery platform based in Europe. A month later, <a href="https://1851franchise.com/uber-buys-postmates-for-265-billion-2713437#franbuzz">Uber announced it would acquire Postmates</a> for $2.65 billion. This may be bad news for foodservice franchises, who already contend with a narrow marketplace of delivery providers offering less-than-competitive fee structures for merchants.If digital ordering continues to grow, or at least maintain these pandemic levels, franchisors will need to find a balance between in-house delivery channels and third-party platforms. The former may have a higher ROI, but the latter could provide more visibility.&nbsp;Still, not all restaurant operators are confident yet in their ability to keep up with the demand. According to Upserve, 47% percent of restaurants said their transition to online ordering has been their biggest challenge during the COVID-19 crisis.

How Foodservice Franchisors Are Keeping up With the Growing Demand for Online Ordering

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