With analysts predicting 25% of restaurant sales coming through digital ordering in the next five years, there’s no doubt restaurants are facing some decisions. For even the biggest restaurant groups the big questions are,"Should we consider third party food delivery, and if so, what impact will have it on our brand?"
To Roll or Not to Roll
Getting your food into people’s home can be almost as important and sometimes even more profitable than having them sitting down in your restaurant. Higher check averages and reduced overhead costs can be an enticing proposition. But there are a few things to consider when protecting the most important thing your restaurant has going for it: your brand.
Brand is more than a logo mark for a restaurant: it’s the all-important combination of the food you serve, the atmosphere you offer, and the way you treat and message to your customers and the public. It’s the feeling hat people get and thoughts they have when they see the name of your company or walk inside. Your brand is, in fact, the truism of who your restaurant is in the minds of the public. It’s fueled by operations first and messaging and advertising second. It has real importance and great value. In the UK and other countries a company’s brand is listed as a tangible asset on their GAAP analysis. Brands typically take years to establish but they can be destroyed in moments. And for first-time diners, one bad experience can hurt your brand in their eyes before it’s even really established in their minds. Here are some things to consider while making this decision...
Will delivery be profitable for my business?
Thanks to the rise of third-party delivery, for most restaurants the answer is yes. For successful locations that keep dining rooms full, delivery is a great way to expand the restaurant’s “footprint” and keep revenue climbing, without having to set unrealistic goals for turning tables, or otherwise damaging the “in-store” experience.
Of course, every business is different and whether you use delivery employees or third parties, you need to consider all aspects at play: kitchen demand (especially during peak restaurant times), the labor/staff demand that’s required for processing the order as well as packing it up, the logistics of it all (staging meals for delivery pick up, actual transporting and/or accommodating third party drivers for pick ups), delivery meal packing costs, and of course—third party delivery fees, which sometimes rise north of 25%.
With that haircut off the top, is the profit still worth it? If so, there are still a few more questions to ask.
Can the food we serve stand up to the strain of delivery?
This should be the first and foremost question for a chef.“Will my food still be at our highest quality standard when it arrives at the door of my customers?” Even though we are an ad/brand agency, we still consider the most important factor to preserving your brand. If your food isn’t great, your band has no chance to be great.
Ask yourself: are there certain food items that will travel ell, but others won’t? Can I offer an abbreviated menu for delivery if some items can’t travel well? Are there packaging options or in-car arrangements that can be made to preserve the quality of the food even after it goes all the way from my restaurant to the customer…and how much more will that cost me?
What are the ways you can control the brand experience after you’ve handed off for delivery? If food does not travel well, could your chef or staff deconstruct some of your dishes partially so that any finishing sauces, liquids, components could be combined or added at home for a fresher food experience? Besides getting the customers physically involved and engaged, you might also have a better chance for maintaining flavor integrities with a smaller item/liquid packaged out in deconstruction, in such a scenario.
One of the most obvious but also biggest threats to your brand is the negative effect transportation can have on your food. And while there aren’t many ways to rectify the situation without significant capital expense, there is one simple area that can be addressed. By its very nature, food that is delivered is bound to arrive at less than optimal temperature. So how can you remind customers to reheat your food?
Here’s a Saturday creative solution/idea to solve third party delivery issues: consider including a branded thermometer to measure the temperature of the food when it’s unpacked. If it indicates the food has fallen below a certain range, prompt customers to reheat the food according to your instructions. That way you improve the odds of customers enjoying your food the way it should be enjoyed, and thereby having an optimal delivery experience. Or at least as close to the in-store experience as you can hope to get. And you could do it through an unusual design or brand theme specific product that helps further your brand pillars, whether your fans use them or not.
What can we do to improve the brand experience for third party delivery customers?
Most delivery customers are looking to the restaurants to provide everything they need to eat when they opt for delivery. Are your cutlery, your dish ware, or even your bags the most ideal for the food you’re serving? Can you make adjustments to improve the experience, or mimic the in-store environment?
Are there aspects of your brand that can be exported? Or at least exalted? For example, if your restaurant is always known for having great music, do you include a link to a playlist so customers can soak in your famous tunes even though they’re eating at home? Are there elements of the table you can send along, like custom napkin prints, or condiments? If you’re known for having a certain squeeze bottle at the table, do you give a branded one to loyal customers so they can use it for the times when they opt for delivery?
To drive home the idea of customer service, could you assign a “server” to each diner, perhaps even the person who packed their meal? A simple, “How was your food?” and showing you care can go a long way with the customer and get useful input for your delivery program, all while adding a level of quality control.
Are there ways you can use delivery to drive in-store visits or vice versa, depending on your needs? (Hint:yes, there are.)
Is “delivery-loyalty”different that “in-store loyalty”?
Like anything in your business, this should be evaluated based off your mission and your business goals. We see endless opportunities to influence behavior and reward your loyal customers’ behaviors. Loyalty in our opinion should always be rewarded one way or another, and not always at great expense.
Setting loyalty parameters based off the things most profitable for your business suggest that maybe multiple loyalty structures are appropriate. Perhaps combining in-store visits with delivery incentives can find the right balance to make sure your restaurant keeps it’s best customers happiest along with your CFO.
Currently, most of the third party groups are controlling the loyalty program by owning the ordering experience through their app. They aren’t rewarding loyalty to your restaurant; they’re rewarding loyalty to their delivery service. This is very disadvantageous to restaurants. Can you negotiate to change that? Can you make adjustments on your end to reward delivery loyalty to your restaurant, even when 3rd party apps are used? Are there ways to integrate third party delivery systems with your mobile app or loyalty program? (For example, Postmates has an API which means you might be able to integrate…)
How is the third party delivery fitting in as part of my restaurants’ operations?
While the facility needs and processes required are important starting points, restaurants would be wise to acknowledge that once you engage a third party delivery company, you are christening them as ambassadors to your brand. While the deliver drivers aren’t loyal to your company (and at times work for your competitors), and they aren’t technically on your payroll, customers don’t see it that way. You need to consider their performance and the challenges that rise as your concern as well.
There’s a great story from one of the recent restaurant conferences about complaints a certain restaurant was getting from their delivery customers: the french fries were only half full when delivered. It turns out the delivery drivers were snacking on the fries as they drove. The solution was simple: an inexpensive sticker used to seal the fry bag and keep hungry fingers from pilfering. These are the tangential things to watch out for because they impact the overall experience and you don’t want your customers’ experience (and therefore your brand) to take a big hit like that.
A constant feedback loop is required, just as much as (if not more than) your in-store feedback. Use any and all tools that can measure the time of delivery. Is the time from when your food leaves to the time it gets to customers’ doors acceptable? Are the drivers/the third-party service handling or not handling your items the right way? Are the drivers impacting your in-store customers with how they’re doing their pick-ups? Are they affecting parking outside? Do you have plans for dealing with these kinds of challenges?
It’s also not just the drivers to consider. How is the ordering process for your customers if it’s through a third party platform? What are the 3rd party's promotional vehicles and would it make sense to use them, or your own platforms independently? It’s worth taking the time to make sure the company you use is working for you and not against you.
How will I measure third party delivery as a success or failure?
It’s always important to set goals and measurement indicators in any major endeavor, but how you do so depends on your company’s situation. Most restaurants are likely to set revenue and profit margins goals. But there are additional ways you might want to measure success or failure.
Reaching new customers for your restaurant: how can you identify/measure new customers trying you via delivery against your database of existing customers?
Is there a way to tap into the third party subscriber base and bring your food to customers who otherwise might not have visited your restaurant?
Are there delivery-specific goals you can set for your in-store diners? (e.g., See how many average weekly visits your most loyal diners have, then set a goal to have them add one delivery order in addition to maintaining their current rate of in-store visits.)
Positive reviews: can you generate positive reviews for your food through delivery? Can you set benchmarks for receiving positive reviews specific to delivery orders on the third party platform, your own site, or one of the review sites?
What is my plan for both third party delivery success and failure?
Before you begin on your third party delivery test, it would be wise to consider broad stroke plans for extreme success or failure. What steps and timelines would you need to expand the program? Is it simply a matter of adding additional staff and supplies?
What adjustments or lead times would need on packaging? Would you need to consider a satellite kitchen/location and staff?
How quickly/easily could you unwind the program and at what point would you pull the plug? Know all this going in, so you can execute accordingly.
Ask yourself, “Besides losing money, what would constitute shutting down your delivery program?”
Overwhelmingly negative reviews and feedbacks that are showing an unfixable pattern of deteriorating food quality is reason alone to halt a delivery program.
Is delivery cannibalizing too much from your in-store traffic?
Is the delivery process harming your loyal diners’ in-store experience in ways that you can’t fix?
Set these kinds of parameters that would motivate you to shut the program down before the process begins, so you can evaluate the situation methodically at set milestones.
Restaurant mobile phone apps that drive delivery sales can also do so much more.
In most situations, when it’s technologically, fiscally and operationally possible, we recommend having your own restaurant mobile app that incorporates your loyalty program, online ordering, delivery ordering and other communications. Owning space on your customers’ mobile device is a great advantage. You have the ability to communicate with them directly, push them messages that don’t get lost in email, offer them proximity messages and learn more about them through this added means of communication. You also have more data and information about their ordering, any service hiccups and better control of the process from order to delivery. Just make sure you keep the app and the loyalty programs easy and worthwhile. There are some third party delivery services that allow for integration into your own apps.
Perhaps the #1 reason your restaurants should offer delivery
Besides the fact your competition is probably doing it (overall food delivery sales grew 51% from August to March alone in2018), Millennials and Gen Z aren’t buying cars or driving as much as previous generations. The glut of scooters, rent-a-bikes, Uber and Lyft in most cities can tell you that. It’s why Ford and GM are developing bike share and ride share programs.
And if your customers can’t or won’t come to you, you better have away to come to them.
Uber Eats is the fastest-growing meal delivery service in the U.S. (https://www.recode.net/2018/4/18/17242262/uber-eats-grubhub-food-delivery-startup)
Whats the biggest food elivery service in your city? (https://www.recode.net/2017/10/3/16384050/food-delivery-service-ubereats-grubhub-doordash-city-takeout)
As competition in the food delivery world heats up, restaurants turn to third parties to keep up(https://www.cnbc.com/2018/03/16/food-delivery-competition-heats-up-third-parties-help-restaurants-keep-up.html)
NPR Generation Z may not want to drive… (https://www.npr.org/2017/12/08/568362029/generation-z-may-not-want-to-own-cars-can-automakers-woo-them-in-other-ways)