Delivering meals with benefits: platform partnerships in the restaurant industry

Purpose This study quantifies the impact of technology-enabled delivery platform partnerships on the direct channel sales of restaurant chains. Design/methodology/approach We leverage a proprietary dataset that tracks expenditures from over 9 million individuals across the USA. The analysis assesses the influence of delivery platform partnerships on direct-channel sales. To identify the causal impact, we use difference-in-difference models with propensity score matching. Findings On average, each delivery platform partnership results in a 1.36% increase in physical channel sales and a 42.6% increase in direct, online sales for the restaurant chains' websites and mobile applications. Moreover, our moderation analysis reveals the following: (1) restaurant chains with sparse physical store networks in a market derive greater increases in store sales from delivery platform partnerships than do chains with dense physical networks and (2) deeper channel integration, where restaurants offer delivery options from their own websites (with fulfillment services contracted to delivery platforms), leads to higher online sales from delivery platform partnerships. Practical implications The results suggest that delivery platform partnerships are especially attractive in generating direct-channel revenues for restaurant chains in markets with sparse physical store presence and when customers can access delivery services directly through restaurant chains' websites or applications. This revenue information, combined with a restaurant chain's costs of partnering with delivery platforms, can indicate which markets may be the most profitable for delivery platform partnerships. Originality/value We add to segmentation research in logistics by examining how platform partnerships differentially affect two key segments: physical and online direct-sales customers. We extend the channel-capabilities literature by analyzing how a delivery-platform channel, with its distinct search and fulfillment capabilities, reshapes outcomes in the direct sales channels of restaurants. We further contribute to the delivery-platform literature by testing the moderating roles of two operational strategies, physical store presence and direct-fulfillment service, on physical and online sales. Finally, we provide practical guidance: Collaborating with platforms expands, rather than substitutes for, higher-margin direct-channel sales.