Dive Brief:

• Online ordering platform ChowNow has launched a free feature enabling restaurants to add “Order Food” buttons to their Instagram profiles and "Order Food" stickers in their Stories, according to a press release emailed to Restaurant Dive. 
• Restaurants that partner with ChowNow can now encourage people to order food via Instagram, which links directly to ChowNow to complete the order flow. Diners will also be able to re-share the stickers in their own Stories, helping drive awareness. There are more than 13,000 independent restaurants on the ChowNow platform. 
• “This Instagram feature is yet another valuable tool we’re offering our restaurant partners — at no cost to the restaurants — to help them drive more revenue and boost order volume without suffering the outrageous commissions and fees imposed by other delivery apps,” Chris Webb, ChowNow CEO, said in a statement. 

Dive Insight:

This feature could drive more revenue and boost order volume for restaurants, since operators have been forced to abruptly shift to takeout/delivery-only operations during the pandemic. As the most engaging social media platform, Instagram is a good channel to provide restaurants with additional exposure. Further, according to TechCrunch, food content is among the most widely shared on Instagram.

By making restaurants’ food pics shoppable, ChowNow is providing a seamless ordering opportunity most independents could use during this crisis. Independents have been hit particularly hard, with some forecasts estimating that as many as 75% American restaurants could close. 

But the benefits here extend beyond facilitating a critical digital-ordering channel on a wildly popular social media site. The no-commission model a big deal, especially in an often-contentious third-party environment. ChowNow charges a monthly fee of $99 to $149 a month per location, versus a per-order commission fee that delivery companies charge. Those commission fees have come under significant scrutiny of late, with some as high as 30%, which compromises already-thin restaurant profits. 

Restaurants’ struggles with high delivery commission fees long preceded the coronavirus pandemic, however. With average profit margins in the low-single digits, delivery commission fees ranging between 10% and 30% don’t leave much for restaurants at the end of an order. Because of the added challenges during the pandemic, San Francisco enacted a commission cap of 15% on all food deliveries until restaurants are able to open for dine-in business again. 

Other restaurant-adjacent companies have taken note of this major pain-point to launch their own commission-free services. Foodetective recently launched commission-free delivery and takeout to support U.S. restaurants. White-label online ordering platform MenuDrive announced free online ordering and CRM software at the end of March. Waitbusters is providing its online ordering service for a flat monthly fee of $29.95 versus commission.

For the ChowNow feature, however, the game-changer comes not only from the commission-fee model, which could force other providers to find similar solutions, but also from the popularity of Instagram in general. Eighty percent of consumers follow at least one business on Instagram, and the new feature could very well help a lot of independent restaurants stay connected to their customer and advertise new meals available for delivery.