First, the most amazing thing about Day One of the Restaurant Leadership Conference: There wasn’t an utterance from the stage about Donald Trump, Capitol mayhem or alleged meetings with Russians. Clearly, a gathering of more than 1,000 top restaurant chain executives and franchisees had its own matters to dissect and discuss.
And discuss they did, raising points profound, trivial, but almost universally arresting. A news tidbit was shared here, a major lament there, a telling observation elsewhere. It was a meeting of the minds, and the minds covered a lot of ground.
Here are some of the takeaways non-attendees missed.
1. Wait—there are still such things as restaurant tables?
The topic that preoccupied attendees was clearly the boon in off-premise and how best to exploit it. Sooner or later, conversations between two operators would veer to, “So, what are you doing in delivery or catering? And how’s that working for you?”
The answer to the latter was invariably, “pretty darned well.” A Firehouse Subs franchisee shared that his recent venture into delivery via third-party services has bumped sales upward by 14.2%—90% of it incremental, and virtually all of it paying the dividend of follow-up visits to his stores. A California Pizza Kitchen franchise pegged its delivery mix at 20%.
But, clearly, the experience hasn’t been a cakewalk. Attendees avidly compared notes on how much of a fee they were paying third-party deliverers (the range extended from 3.5% to 30%), and how they monitored feedback from customers about the experience (most didn’t have a mechanism of their own, and relied instead on the deliverers’ rating system.)
And that led to some nuggets of insight like the ones that immediately follow.
2. Who gets the blame for a messed-up delivery order?
One of the events on Day One was a tour of local restaurants, including a Firehouse Subs unit. Chain CEO Don Fox was on hand to answer visitors’ questions about what the chain has learned from its recent foray into delivery via third-party services. Attendees wanted to hear, in particular, about who was getting the blame from customers for botched orders.
Patrons have become so familiar with the delivery process that they can now read who might be at fault, said Fox. If an order wasn’t accurate or something was left out, the restaurant gets the blame. But if a utensil wasn’t included, customers are now smart enough to realize it was the delivery service.
An executive of a California Pizza Kitchen franchisee noted that store managers are also getting savvier. If a particular driver has a history of disappointing customers, the restaurant just won’t deal with him, the exec explained.
3. Why not channel back some sales info?
Fox expressed amazement that third-party services haven’t yet realized they have the potential to deliver a powerful payback to the restaurants whose food they haul, to the benefit of both parties. As he explained, those services collect a ton of data about who is using the ordering component of their systems—how many are first-time users of a chain, what they typically order, how much they order, etc.
Mining that data, he explained, would yield tremendous insights, not the least of them being whether a 20% or 30% delivery fee is worth the cost. Fox noted that one of Firehouse’s franchisees regards that charge as a marketing fee, since the patrons often try a delivered Firehouse sandwich first, then subsequently pop into a store. The franchisee makes a point of talking to guests, so he’s able to make a connection with those new customers, a benefit that’s worth kicking back a third of the sale.
4. How do you fight congestion?
A problem mentioned repeatedly by executives of limited-service chains was how to hand to-go customers their remotely placed orders without disrupting normal service during the lunch or dinner rush. The conversations clearly indicated that restaurants built tomorrow are likely to have dedicated pickup areas.
Firehouse, for instance, is testing a setup were a pickup station is situated at the front end of the normal ordering line. Walk-in customers walk past it to place their order in the usual fashion, while pickup patrons just grab and go.
A major twist: The pickup stations will be cashless to encourage patrons to pay ahead of time via an app, said Fox.
5. What’s next in mobile ordering?
A strong possibility is embracing e-commerce strategies like nudging users to complete a purchase, says Jerry Shen, director of digital marketing for Blaze Pizza. “Think about what happens on online retail sites,” he said. When an Amazon customer drops an item into their cart, ads and messages pop up about that specific cart item. If people build a pizza in Blaze’s app, the chain could gently prod a purchase if the customers don’t opt for their usual favorites, he suggested.
6. Five Guys’ big food-safety initiative
Another stop on the day’s restaurant tour was a local Five Guys Burgers and Fries restaurant. The franchisee proudly showcased what had been installed in his kitchen a few days before: a produce wash station.
Using the system to give the chain’s lettuce a rinse has removed more than 99% of common food pathogens, he explained.
7. Firehouse’s new sandwich size
The Firehouse restaurant featured on the tour sported a new menu board for the brand. Among the new features, said CEO Fox, is a third sandwich size. Customers can now choose a small, medium or large size of each of the chain’s hot subs, with meat portions matched accordingly.