Dive Insight:
This launch could entice independents running on thin margins away from third-party delivery platforms, which charge commission fees of 30% on average. ChowNow provides a commission-free model to its 20,000-plus restaurant partners. Last April, ChowNow partnered with Instagram to add “Order Food” buttons to stories and profiles.
According to a company blog post, the Order Better Network “casts a wide net that effectively lets your restaurant be everywhere at once,” reaching diners who are ready to order. ChowNow said it will continue to add new partners to the network, but the current roster already offers broad audience reach. Before the pandemic, OpenTable sat more than 31 million diners every month, for example, while Yelp has 31 million unique devices using its app.
“ChowNow’s mission for over ten years has been helping independent restaurants thrive,” Chownow Co-founder and CEO Chris Webb said in a statement. “The Order Better Network offers a huge opportunity for growth. Now for the first time, restaurants can easily and efficiently expand their online presence across a variety of popular brand channels and across millions of new customers.”
But third-party platforms offer competitive access to diners, too. Half of U.S. consumers have ordered from a major third-party delivery provider at least once, according to data from August 2021. DoorDash, which has the biggest slice of market share among delivery platforms, has more than 20 million active consumers worldwide in a given month.
DoorDash, Grubhub and Uber Eats have all also added new features to appeal to smaller restaurants and compete with rival online ordering platforms. These tools include tiered pricing structures and marketing and technology support. Grubhub introduced a new toolkit last year that allows restaurant partners to add online ordering to their native channels, without charging a marketing fee for the service.
Still, ChowNow and similar companies like CaterCow, Ordermark and Lunchbox are growing while charging restaurants low or no delivery fees. ChowNow’s partnership with major websites could hasten that growth, particularly as delivery demand remains high and third-party commission fees eat into erestaurant margins.
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