The Third Option: Why Restaurants Need to Break Free from the Digital Ordering Binary

The restaurant industry’s reliance on two archaic options for digital ordering – third-party marketplaces and first-party apps – is a significant issue. These choices come with drawbacks such as high commission fees and costly guest acquisition.

According to recent statistics, 82% of brands mark up menu prices on these platforms to offset fees, with over half of those markups ranging from 20-30%. This hurts both consumers and restaurants, who end up renting guests rather than owning them. The lack of data ownership prevents restaurants from building meaningful relationships with their customers.

Other industries have moved beyond this binary choice. E-commerce brands like Shopify have successfully implemented second-party solutions, where multiple businesses share infrastructure to serve customers better. Restaurants can learn from these examples and explore a third option.

A second-party network would allow guests to order from a centralized location, choosing the brands they want to follow and receiving personalized offers without markups or ads. This shift in how restaurants engage with their customers is not just technical but fundamental.

Collaboration among brands is necessary for this new direction, but it’s also about recognizing that digital ordering is no longer a novelty – it’s an essential part of the customer experience. Restaurants need to adapt quickly as consumers increasingly expect seamless and personalized interactions with brands.

The shift could have significant implications in data ownership and guest relationships. Currently, restaurants rely on third-party marketplaces for reach, which means they don’t own their customers’ data. A second-party network would allow restaurants to build equity in their guests, rather than simply renting them from a middleman.

The author’s vision of a second-party network is ambitious but necessary. It requires a fundamental shift in how restaurants think about digital ordering – no longer as a transactional experience but as an opportunity to build meaningful relationships with customers. If they don’t seize this moment, they risk being left behind by consumers who demand more from their favorite brands.

As the restaurant industry navigates this new era of ordering, those willing to innovate and adapt will thrive in the long run. The third option is not just a technological solution but a cultural shift – one that recognizes the importance of data ownership, guest relationships, and personalized experiences. It’s time for restaurants to break free from the binary choice and explore this new frontier together.

The consequences of inaction are clear: continued reliance on high-commission marketplaces and costly guest acquisition will only lead to more frustration for consumers and financial strain for restaurants. By embracing a second-party network, they can finally start building meaningful relationships with their customers and creating a more equitable digital ordering experience.

Twenty years have passed since the first text order was invented – it’s time for the restaurant industry to catch up. Will they seize this moment and create a new era of ordering, or will they continue to be stuck in the past? Only time will tell, but one thing is certain: those who innovate and adapt will be the ones still standing in the years to come.