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Bareburger wants to take their delivery power back.

How Bareburger took back a majority share of their digital orders from third-party companies

The 38-unit better-burger chain just passed 51% ownership of digital orders, giving them more control over data and customer experience

Like many brands, the New York City-based casual-dining chain Bareburger sees third-party delivery as a necessary evil. But the 38-unit company has been slowly trying to decrease their dependence on Grubhub, DoorDash and Uber Eats.

Since 2018, Bareburger has shifted from handling only 14% of digital orders in-house to 51% in-house orders in May 2020.

Bareburger Group creative director Zach McCurdy said the key is to devote resources to re-educating customers and improving the in-house digital ordering experience.

In 2019, Bareburger launched their reimagined omnichannel app and web ordering, in partnership with Lunchbox for no initial development cost and a recurring monthly fee. Previously, their mobile and website ordering interfaces did not “talk to each other,” and the consumer interface was confusing, to say the least.

“Before we switched to this new omnichannel user experience, we had a different vendor for web ordering and for our app,” McCurdy said. “Our guest segmentation on our website was different than on our app. Promos we had on the web didn’t work on mobile and vice versa. It got to a point where it became impossible to market them.”

For this reason, McCurdy said, frustrated customers would usually find it a lot easier just to order food through their preferred third-party delivery service than have to navigate the in-house platforms. But even though third-party delivery can be convenient for operators, Bareburger found that they lost a lot when they sacrificed their delivery autonomy — in addition to the standard 20-30% commission fees.

“There’s brand exposure value to [using third-party] but the experience is just not customizable to the brand,” McCurdy said. “With a company like Bareburger that’s so passionate on a brand level, we sacrifice so much because we don’t get the customer data from them. […] Then Grubhub goes off and supplies data to Shake Shack. They pick their priority partners and don’t expect backlash from that.”

However, with their own omnichannel system, Bareburger has easier access to consumer information with which they can learn more about consumer spending habits and gather data for menu innovation and customer experience ideas, like the new menu makeover Bareburger was planning to roll out before COVID-19 hit.

With the new app they can also focus on re-educating consumers, which has been surprisingly easy to accomplish as the country begins to recover from the COVID-19 pandemic, according to McCurdy. Guests have become more aware of the fees their favorite local restaurant has to pay to third-party delivery services and they’re listening to alternatives, he said.

For example, with Bareburger’s new app, customers will be able to get personalized deals and take advantage of marketing initiatives that they would not be able to find if they just opened up their Uber Eats app. Since launching in 2019, they now see approximately 35% of total sales from their own website/mobile orders.

“We put so much value and customer education into why it’s better to order directly from us, that that’s been a turning point in why we started to see significant growth in delivery ownership,” McCurdy said. “Utilizing the control we have, and knowing how our guests really order with us, we'll be able to create marketing initiatives that are more effective and relatable for our guests.”

But Bareburger’s issue with third-party delivery is not just about the fees they charge or the customer data they don’t release. The company has also been grappling with what has become known as “last mile” logistics.

Although the restaurant is the party receiving, preparing and sending an order out for delivery, the “last mile” of the journey is handed off to a contractor and Bareburger can’t control how late or cold the food is when it arrives.

This issue — which is a common complaint from most restaurants that work with third-party delivery services — has been persistent for Bareburger because even as they begin to “take their power back,” many of their locations still rely on Grubhub, DoorDash and Uber Eats for orders, including those placed on their own app or website, for which they pay a $6.99 delivery fee per order (offset by their own $4.99 delivery fee placed on customers).

“We put a lot of faith in third party for them to deliver correctly but we see a lot of issues with them not holding the same standards that we do,” McCurdy said. “And that comes down on Bareburger […] even though it’s out of our control as soon as the order leaves the restaurant.”

Bareburger’s goal moving forward, he said, is not to completely replace third-party delivery vendors with their own in-house services, but rather they hope to have a more open relationship with Grubhub, et. al.

“I do think they still hold value they give you brand awareness and exposure to new customers because customers love going to places like marketplaces to see a broad range of options,” McCurdy said. “But I hope we hold onto the majority so we can control the relationship.”

Grubhub did not respond at press time to request for comment. Uber Eats declined to comment and DoorDash declined to comment on the record.  

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Contact Joanna Fantozzi at [email protected]

Follow her on Twitter: @JoannaFantozzi

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