Third-Party Vs. First-party Apps

Online ordering has become integral to the success of any business, but especially restaurants. However, mobile apps are becoming the preferred option as opposed to website orders. Websites are still a viable option for online ordering, but mobile apps are on the rise in regards to popularity. When deciding on how to approach getting a mobile app, there are two options for restaurants to consider. One is a third-party app such as Grubhub, UberEats, Postmates, etc that act as marketplaces for a multitude of restaurants that the customer can choose from. The other is a first-party app which is made especially for you. 

Both choices have their pros and cons, but choosing between them depends on what you want out of the experience. Let’s look into the differences these apps have and see which one overall makes the most sense for the average restaurant. 

Third-Party Apps

Third-party apps are a popular choice. A big part of this is how they are initially cheaper to set up than a first-party app. Through a third-party app, it’s also easier to access to new customers because you’re listed in a category along with other restaurants similar to yours. If you decide to give the option of delivery, these apps have drivers to do that for you, so you don’t have to hire or train an employee to make those trips. All you have to worry about is the food itself. 

The problem is, although third-party apps can seem like the much cheaper option, in the long run, they aren’t. Commission fees can drain the life out of you financially. You could be charged anywhere from 15%-45% in fees per order. Losing almost half of the revenue on each order made is like taking one step forward and two steps back while trying to pick the cheaper option. Also, while you can be seen by new customers, your competitors are as well. Third-party apps promote other restaurants similar to yours while customers are searching for you. You also risk brand integrity by promoting the business that created the third-party app, rather than promoting yourself. You also lose all too valuable customer data to that company when you use their app.

First-Party Apps

So what about first-party apps? At first, they are more expensive than third-party apps. It takes time and resources to build an app rather than signing up for one. It also makes broadcasting your restaurant to new customers more difficult. You’re not on a list in a category like with a third-party app. Not only that, but you have to be the one to promote the app and encourage customers to download it. Something that only works if customers are consistently made aware of the app’s existence.  

There are more benefits to first-party apps than downsides though. Having a first-party app means that everything that the customer sees on the app can be customized to fit the brand of your restaurant as well. You wouldn’t be promoting UberEats for instance and slapping stickers or signs with their logo and their branding all over your establishment. This will give the customers a more authentic experience of your restaurant and a sense that even if they’re not with you physically, they are in spirit. With a first-party app, you won’t be charged commission fees on orders. That revenue is 100% yours. This means you can make back the cost of the app and see some real growth through its usage. 

So Which Should You Choose?

A first-party app is overall the better option. If you feel that your restaurant can use the exposure that comes from a third-party app, then perhaps use one for a short period of time. Since it does get expensive in the long run, it’s simply not a permanent option for restaurants. Especially with all of the recent criticisms of the gig economy, their long term use should be questioned. 

Putting down money for an app, especially when you already have a website with online ordering may sound like a waste of money, but it could be what sets you apart from the other restaurants you’re competing against. People expect most businesses to have a website nowadays. You can’t attract more attention than another business with the bare minimum of effort. Having your own first-party app could be that extra push that allows your restaurant to meet its full potential.

At ScannedMedia, food ordering apps are our specialty. If you’re looking into having a mobile built for your restaurant then feel free to click on our contact page and let us know how we can help you expand your revenue stream.

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