Online restaurant ordering nearly triples in 2020

The cover of the Paytronix online orderiing and delivery report

Written by James Shea

According to a recent report from Paytronix, customers who place online orders at restaurants spend 10% more when asking for delivery versus pickup.

Called “Order & Delivery Report: 2021,” the report looks at 2020 and how the COVID 19 pandemic influenced online ordering. The report found that 65% of customers who ordered online in 2020 were first-time customers.

“When states placed restrictions on bars and restaurants in the spring, online ordering sales predictably spiked to a new level,” according to the report. “Though this channel peaked in early May, sales remained more than triple what they had been prior to the pandemic throughout the rest of the year.”

When the lockdown hit in mid-March,  54% of restaurants in the United States were forced to close down dining rooms. At the same time, online ordering predictably increased drastically. Restaurants saw a 363% increase in online ordering when compared to pre-pandemic averages. 

Those numbers peaked around the second week of May. 

After the peak, the overall size of each order was smaller but order volumes continued at high levels. That resulted in more customer loyalty and more customers utilizing loyalty programs. According to the report, 4% of online customers used loyalty programs in the early part of 2020, but 17% of all sales were tied to loyalty programs in the second half of 2020.

Online ordering saw a second surge around the holiday season last year. Online sales were 452% above pre-pandemic levels during the holiday season, and 24% higher than during the height of the lockdown. People understood the convenience of delivery and online ordering and took advantage during the busy holiday season.

Growing new customers

Now, 28% of all orders are online. That compares to 10% before the pandemic. A majority of these changes took place in quick-service, fast-casual and casual dining and done by brand new customers. A huge number had never ordered from a brand — either in-person or online — before the pandemic.

“The uptick in online sales in 2020 largely came from guests who were new to the brands they visited,” the report said. “People who had previously ordered both online and in-store continued visiting the same brands at a fairly consistent rate, but former in-store-only guests and those who were completely new drove the increase in online orders. … These guests accounted for about three times as many online orders.”

Delivery a key part of online sales growth

According to Paytronix data, about 25% of online orders were for delivery, but the numbers varied greatly. Restaurants with an in-house delivery system saw 44% of orders were for delivery. Those that utilized third-party delivery only saw 12% of orders for delivery.

“At restaurant brands with in-house couriers, delivery customers spent about 21% more than takeout customers on average,” according to the report.

An interesting part of the study shows that curbside pickup was the service added by the most number of restaurants. It makes sense. People wanted to pick up but were worried about potential exposure inside the restaurant. Most restaurants did not offer the service prior to the pandemic.

According to the study, 67% of restaurants added curbside pickup. That compares to 17% adding in-house delivery and 27% adding third-party delivery.

The data also showed that delivery customers were more loyal. Customers who reported a positive experience were over 10% more likely to purchase again in the future if they ordered delivery.

The report concludes that many of these changes in ordering habits are permanent. While many will visit dining rooms and eat, a huge number of people have embraced online order and off-premise dining.

“While the light is visible at the end of the pandemic tunnel, it’s clear that guest behavior has fundamentally and permanently shifted toward off-premises channels,” the report stated. “Even as in-store sales began to recover in 2020, it was not at the expense of digital sales, which were nearly four times higher after the pandemic’s onset than they had been in the first nine weeks of the year.”

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