Operations

5 delivery lessons for restaurants

Issues relating to the off-premise boom were clearly top of mind to Restaurant Leadership Conference attendees. Here are five insights they were given on the conference's opening day.

The minute doors opened Monday at the Restaurant Leadership Conference in Phoenix, the topic on the minds of the 1,200 restaurateurs in attendance was as evident as their name badges. If a session dealt with delivery, it was certain to start with a standing room-only crowd.

The interest was less in the potential of delivery, though new stats underscored the long-term perspective, than on how the service is evolving as operators, customers and third-party services get accustomed to the service. As it becomes ingrained into the industry, how’s it going to change?

Here were some of the possibilities aired during Day One of the conference:

1. Will chains share delivery drivers?

Speakers were asked a number of times if they expect more chains to try self-delivery if the double-digit fees for third-party services hold steady.

The consensus: Third parties such as Grubhub and DoorDash are not fading into the sunset. Indeed, several speakers predicted the delivery specialists will become more formidable and efficient by absorbing one another.

But there were repeated mentions of self-delivery experiments, such as the five-unit test currently being run by Red Robin. At two of those units, self-delivery is the better business play, but partnerships with outside deliverers is more profitable at the other three, according to COO Carin Stutz.

Another, more novel option was raised by a speaker in response to a question: If the cost of drivers is a deterrent to self-delivery, are any chains looking to amortize the expense by sharing a delivery fleet with noncompeting brands?

“There’s talk about it,” responded Ben Flammang, VP of business development for the software company Bringg. “It’s feasible. It makes sense. But I’ve not heard of anyone doing it yet.

2. What third parties could do better

Service partners could help their cause by meeting some key needs, said Jim Thompson, VP of operations for Chicken Salad Chick. Among the top three things he’d like to see from the delivery specialists is a way to team up on loyalty programs.

His other two requests from suppliers: integration of third parties’ ordering platforms with a chain’s POS, and better takeout packaging.

3. To app or not

A hurdle for self-delivery is the need to have customers order through a brand’s app. And that’s no small challenge, speakers agreed.

“If you’re not the size of Panera, don’t develop your own app,” said Howard Hardy, director of marketing for Olga’s Kitchen.

Regardless of size, be careful about what department is responsible for an app’s development, suggested one panel. “Letting the marketing team choose my tech vendors was my biggest mistake,” said Kasey Eunice, a veteran consultant who helped develop Taco Bell’s app.

4. Don’t bet on drones and robots

“Any technology that is really going to move the needle is behind the scenes,” said Grubhub CEO Matt Maloney, who shared the stage with Yelp CEO and co-founder Jeremy Stoppelman. “We won’t see all the stupid garbage about drones or automated robots.”

He said that too many deliveries are done in major urban areas. “Where do you land a drone in a city, on the roof? The whole thing is ridiculous,” he said.

5. But expect off-premise to continue growing

Four out of five millennials will be parents by 2026, said Melissa Wilson, principal with Technomic, Restaurant Business’ research sister. And parents use various off-premise channels more frequently. They are 67% more likely to use delivery-only restaurants, 63% more likely to use third-party delivery, 56% more likely to use grocery delivery and 44% more likely to use meal kits.

One of the drivers, Wilson said, is a turning away from dining out. Almost half of consumers (49%) prefer to eat at home versus in a restaurant, she said, and off-premise services provide the opportunity to do that without the stress of cooking.

The Restaurant Leadership Conference is presented by Restaurant Business and its parent company, Winsight Media.

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