The effect of restaurant cues on restaurants’ delivery services

The rapid growth of smartphone users and mobile internet technology accelerate the prevalence of online food delivery services (OFDS). The emergence of OFDS not only changed the content of existing restaurant attributes, but also introduced new attributes (related to delivery services in the restaurant selecting process. Food delivery service apps (FDSAs) is a third-party platform that provides food order services, payment, and delivery service from restaurants to customers. It capitalizes on customers’ extensive use of smartphones, mobile internet, and navigational service. Using FDSAs, customers can choose meals from various restaurants, based on their preferences. Online reviews for FDSAs can help customers choose high-quality restaurants from operations they unfamiliar to them. Additionally, delivery services for FDSAs eliminate location barriers between restaurants and customers. The delivery service provided by FDSAs allows customers to order food from anywhere without worrying about traffic and distance. These features significantly improve convenience, time, and effort savings for restaurant searches and mealtime; thereby, stimulating purchase intention via FDSAs. Furthermore, changes in the dine-in environment show delivery customers no longer rely on attributes of restaurant ambience to evaluate restaurants. Instead, They use existing restaurant attributes (related to food and service quality) and newly added delivery attributes (delivery time, delivery fee, and minimum ordering amount) as quality cues for their restaurant selections using FDSAs. In addition, restaurant externalities (e.g., competition level) affect customer choice in terms of delivery services. The restaurant industry is known as an intensively competitive market. It is difficult for restaurants to increase brand awareness and reputation to stimulate purchase intention. However, with substantial restaurants offering similar menu items, the competition is more intense in delivery services. Moreover, retaining customers is another challenge for delivery restaurants. Delivery restaurants are always surrounded by rival restaurants offering lower-priced menu items on FDSAs. Hence, it is hard for delivery restaurants to build solid relationships with customers, even satisfied customers. Therefore, it is necessary to examine the impact of external factors on restaurant selection in delivery service context. To comprehensively understand the effects of restaurant attributes of online delivery service on customer restaurant selection, in terms of the relationship between restaurant attributes on FDSAs and restaurant delivery performance, this study cannot ignore the impact of COVID-19 on customer purchase behaviors on FDSAs. The outbreak of the coronavirus rapidly spread worldwide. The restaurant industry experienced a great recession during this pandemic. Existing literature has demonstrated the significant impact of delivery service on the sustainability of the restaurant industry. However, the effects of the socio-economic environment, such as the impact of COVID-19, on the use of restaurant attributes in restaurant consumption in the delivery service has not been investigated. Thus, this study aims to investigate how and what restaurant attributes affected restaurant financial performance in the delivery service context and what changes occur in these relationships with the presence of the COVID-19 pandemic. To achieve these research purposes, this study first examined the correlation between restaurant attributes and externalities, and restaurant delivery performance concerning two factors related to online visibility (competition and operating shifts) and delivery attributes (delivery fee, minimum order amount, and delivery time). The results of this study found significant effect of existing restaurant attributes and externalities on restaurant delivery performance. Specifically, competition and operating shifts have opposite effects on generating sales growth for delivery restaurants. Extending operating shifts can significantly promote restaurant delivery sales, while restaurant delivery performance declined as the number of rival restaurants increased. This study found that competition moderated the effects of online reviews (review ratings and volume) on restaurant consumption via FDSAs. Delivery attributes are significantly related to restaurant delivery performance. Second, cost and delivery attributes are significantly related to restaurant delivery sales. Cost attributes were negative on restaurant delivery performance, while delivery time showed a positive effect. However, when the waiting time exceeded a certain point, a negative effect resulted. The influence of restaurant attributes on restaurant selection on FDSAs changed during the pandemic. The findings demonstrated sales effect of restaurant attributes changed after the outbreak of the pandemic. Customers considered restaurant attributes as quality cues in using FDSAs during the pandemic period, which revealed the focus of restaurant consumption shifted from perceived value to perceived quality as the fear of infection increased. Moreover, the role of review ratings as a quality cue diminished during a public health crisis; whereas, delivery customers tend persuaded to choose a restaurant by quality information from restaurant type. The moderating effects of two quality cues (review ratings and restaurant type) on the correlation between price promotion and restaurant delivery sales also changed during COVID-19 period. This study contributes to the restaurant industry and its scholarship in several ways. Theoretically, this study extends the delivery service literature by providing empirical analyses of the relationships between online visibility (competition and operating shifts) and restaurant performance. It also examines the sales effect of price promotion on customer restaurant choice from a risk and crisis management perspective. Practically, this study can help delivery restaurants increase online visibility and develop proper strategies to attract customers via FDSAs. Moreover, the findings related to the changed effect of price promotion on restaurant delivery performance during the study periods provide empirical evidence for restaurants to adjust their marketing plans associated with the social-economic changes.