The winter weather will mean customers will be more apt to lean on restaurant delivery – and third-party delivery apps – to get the food they crave. But as a recent New York Times article reported, “restaurants have quickly found that the apps, with their high fees and strong-arm tactics, may be a temporary lifeline, but not a savior.” That’s especially true when an app can charge fees surpassing 30 percent per order and take customer data along with them. In 2021, how can you set yourself up to encourage your customers to come to you directly when they want to order from your restaurant? If you can’t divert waitstaff to delivery duty, use a third-party provider as a courier service only (which typically involves paying a payment processing fee and delivery fee but not losing any customer data), or make it more appealing for guests to collect their orders. In every bag to be collected by a third-party vendor, include a coupon good for a pickup discount – along with an explanation about how third-party fees are impacting restaurants right now. Offer rotating specials that are only available through orders placed via your website. Finally, use your social media and website to directly urge customers to come to you. Reinforce how much they will save on fees by simply collecting an order from you or (if possible) having you deliver it to them directly. Explain the difference side by side and tell them how much money your business makes or loses depending on how an order is placed – sometimes a consumer’s decision to use an app is not a conscious one and the person just needs to be reminded of how you’re feeling the difference. Your customers have surely seen some of their favorite restaurants close in recent months – and they want to see you survive and thrive. Tell them how to place orders that can best support you right now.
This year, consumers and restaurants alike could really use the morale boost that holiday gatherings and celebrations can offer – but those events will look a lot different this year (if they happen at all). But not so fast. Could you find a festive way to help people enjoy great company, food and drink in a new way? Could you still help them toast to a long-awaited 2021? Think about how you can bring the party to your guests individually or virtually. Are there businesses in your neighborhood who have always held their holiday lunches and happy hours with you but will miss them this year because their employees are working remotely right now? More than ever, they want to make their employees feel appreciated and connected to their work from afar, so promote some holiday bundles that can be delivered to individual employees as a special treat. Do your customers still feel the need for a party – even if it’s not a traditional one? If you don’t have access to a large outdoor space where you are allowed to plan a socially distanced gathering, don’t underestimate the appeal of a virtual party, cooking class, quiz night or wine tasting held via Zoom. It can come together with a menu of festive food, cocktails and party bags for delivery, a few festive or funny Zoom backgrounds and some music.
By now, you likely know the approved COVID-recovery playbook for restaurants: Fine-tune your off-premise menu, offer digital ordering, make your pick-ups low-touch, etc. But restaurants aren’t all alike – thankfully – so a cookie-cutter approach to COVID survival and success isn’t going to work for everyone. If this sounds like you, what could work for you? What might inject your business with enough lifeblood to keep it going until spring, when the environment may look a whole lot better for restaurants? A recent New York Times report profiled the Brooklyn restaurant Gertie, which serves updated Jewish-American deli food and has embraced reinvention mode. When the pandemic hit, the restaurant had no takeout or delivery operation – the one thing believed to be a must for operating in these times. So the owners created one. Far from being a saving grace, it was a “dead end.” So instead, the restaurant has focused on nonprofit work – partnering with a range of meal programs around the city that distribute meals to the hungry. Prior to the election, they planned a weekly event designed to boost business while encouraging support for candidates running for office. So far, it’s keeping them going, and they continue to look for ways to reinvent themselves. The environment for restaurants is severe – but money is still flowing in this economy. What organizations in your community could be critical partners for you right now? What causes might inspire your best customers to support you? This isn’t what you’ll be doing forever but it may help carry you through these next few months to a point next year when life feels a bit safer, people want to get out and support restaurants, and yours will be among the ones there to serve them.
Recently the long-anticipated “second wave” of COVID-19 cases was spurring an indoor dining ban in Chicago, leading to talk of heightened restrictions in the U.S., and bringing back lockdowns in Europe. At a time when COVID fatigue has set in and we’re all eager to congregate again, restaurant operators are in the difficult and pretty impossible position of being arbiters of public safety. Unfortunately, the colder air will make virus transmission even easier than it has been to date: As reported in the Oregonian, Dr. Emily Landon of the University of Chicago medical school said colder air is drier and the droplets that transmit the virus become smaller – so removing masks to eat and drink poses extra safety risks. Instead of pouring your creativity and resources into building a safer outdoor dining area to sustain you in the months ahead, you will likely be better served by going all-in on perfecting your off-premise offerings right now. Think back to how you operated in the early weeks of the pandemic and focus on doing those things again and better. People may be less comfortable eating out for the next several months but they will still need to eat – and the public has become more educated about the low risk of COVID transmission on packaging. Your off-premise menu can help bring some festivity and normalcy to life in these strange times.
If your restaurant has pivoted to mostly takeout service in recent months, you may long for the days when you were serving attractively plated meals. But since takeout is here to stay, can you find a better way to present your off-premise meals? Offering durable reusable containers may help you – and may also help ease your customers’ guilt about the mountain of takeout containers and utensils they have likely accumulated from their favorite restaurants this year. (The Washington Post recently reported the troubling statistic from National Geographic that the U.S. uses more than 36 billion disposable utensils annually – an amount which, if laid end to end, would circle the world 139 times.) Not only is serving food in reusable containers more eco-friendly and budget-friendly if used in the long term – it’s more appealing to customers than eating out of cardboard or from an unrecyclable plastic container that has to then be tossed in the garbage. It also provides an additional means for restaurants to demonstrate (and market) to customers that they are taking steps to minimize their impact on the environment. This Fast Company report mentions Dispatch Goods as one company that is offering a reusable container service that, for a small additional fee, allows customers to set their takeout containers outside in a reusable bag for pickup, cleaning and later reuse by the restaurant. Companies like this are becoming more common and cost-effective for restaurants. Could the model work for you?
At a time when operators have been struggling to make delivery profitable, curb-side pickup has solved some problems. Consumers like it too: Recent Technomic research found that about 40 percent of Americans who have purchased takeout from a restaurant during the pandemic have chosen curb-side pickup and two-thirds of those respondents say they will continue to use curb-side pickup service even after indoor dining restrictions are lifted. The challenge is that many restaurants offering curb-side pickup created the structure on the fly as the pandemic created the need for it. As a result, the service may not be as seamless as it could be. A recent Restaurant Dive report describes operator challenges such as difficulty managing the high volume of calls from customers placing orders and arriving to pick them up. Busy periods have also made it difficult for operators to notice when a particular make and model of car arrives to pick up food. A mixture of new technology and more conventional reconfigurations can help streamline the process. For example, some online ordering platforms – Olo is one – offer alerts that let restaurant staff know when a curb-side customer has arrived. QR codes or textable numbers can also be posted on signs in designated parking spots outside the restaurant to alert staff inside to the arrival of a customer. Other operators are making new use of interior space once needed for guests dining inside – by redesigning waiting areas as places where curb-side orders can be held at the right temperature and ready to be handed off quickly to an arriving customer.
Delivery has become a must for many restaurants, particularly in the past several months, but offering the service is just the beginning. According to a new survey of 2,000 consumers from First Orion, there are a wide range of delivery problems that still need to be worked out. Operators who can find a way to address even some of those problems effectively stand to benefit. The survey found that the vast majority of people have had problems when ordering restaurant delivery: More than 70 percent of people had experienced a problem that required customer service and 50 percent had a problem with late delivery. Incorrect orders, improper food temperature, driver directions and behavior, and the non-delivery of food altogether also posed problems for large percentages of respondents. Fine-tuning your performance in any or all of these areas can help. First, perfect your menu. It should be clear, simple, easy to understand and provide a space for a customer to customize or modify an order. Make your menu easy to find (an Order Here button helps) and read with minimal clicks and scrolling. Use technology to accept orders, confirm customer address and contact information, inform customer of wait time, track an order’s preparation and delivery, and direct a driver to the customer’s location. Take care with not only the quality of your packaging but also with the storage of those packages – your delivery driver shouldn’t be storing cold and hot foods side by side in the same container. Finally, set guidelines about how to best respond to customer complaints online – but if you have a solid handle on the other aspects of delivery, those (hopefully) shouldn’t happen too often.
Even before the pandemic, ghost kitchens were on the rise for their ability to ensure faster, less expensive food preparation and more efficient delivery to customers looking for off-premise dining options. Now, many restaurant operators are looking at ghost kitchens as a critical way forward at a time of great uncertainty for the industry. They may be on to something: Recent research from Euromonitor found that the global market for ghost kitchens could reach $1 trillion by 2030 – and in the process, capture big slices of industry segments including drive-thru sales, take-out foodservice, ready-to-eat meals, pre-packaged cooking ingredients, dine-in foodservice and packaged snacks. But when you’ve been running a traditional brick-and-mortar restaurant, what actions (and investment) are required to pivot to the ghost-kitchen model? Food distributor US Foods is aiming to give operators a hand with that transition through its newly launched US Foods Ghost Kitchens program. The company promises that for an average start-up investment below $5,000, they can help operators open a ghost kitchen concept in about three weeks and achieve an average profit margin exceeding 35 percent. The program includes market research, marketing support, a digital technology framework, menu optimization and management guidance.
As restaurants have struggled to accommodate the need for meal delivery during the pandemic, a number of cities have stepped up to limit the steep fees third-party delivery providers can charge. Restaurant Business reported in late July that Philadelphia – which had just joined the effort alongside cities including New York, Los Angeles, San Francisco, Oakland, Portland, Ore., and Washington, D.C. – would immediately cap total fees on delivery orders at 15 percent. The report said delivery commissions could not exceed 10 percent of the order total, and separate nondelivery fees could not surpass 5 percent – until 90 days after the end of the current public health emergency. As for what happens in other cities, and, for that matter, across the country after the threat of this pandemic passes, restaurants need to dissect their data and understand their customer base so they can negotiate the best terms of third-party contracts. Even with the major providers, there is room for small restaurant brands to bargain – particularly as provider consolidation remains likely. This Fast Casual report (https://bit.ly/33vocmi) provides some tips about the best ways to secure a fair deal with third-party companies – including what you should know about your profits, customer habits and existing ordering channels to get the best leverage when negotiating an agreement. If you think in-house delivery might work for your restaurant with a little guidance, you can also check out the Native Delivery Best Practices Work Group, an effort launched by the Restaurant Technology Network.
At a time when food delivery providers can charge commissions on the order of 30 percent, restaurant delivery is facing pressure to evolve – and fast. The good news is that new models are appearing all the time – and they are building on the community spirit that has been on the rise since the start of the pandemic. Fare is a new commission-free food delivery service that CaterCow just launched in New York City. Instead of delivering small, individual orders, it offers a select menu of foods that must be ordered in advance and are then delivered in bulk to a person’s door within a specific building or neighborhood. While it requires some planning and coordination across households, the only charge is to the recipient, who pays a delivery fee (which starts at $3 and climbs based on the size of the order, according to Restaurant Dive). The restaurant keeps the rest. As restaurants have had to close in recent months, or even in the best cases, adapt their models to the current environment, consumers have become increasingly aware that restaurants need patrons to meet them halfway. That may translate into a willingness to forgo some convenience for the sake of ensuring a restaurant’s profits. Can you entice your customers to adapt to picking up meals themselves if you offer a discount or a free item in exchange? Could you mine your tech to identify pockets of customers, then offer a deal to cost-effectively deliver meals in bulk to apartment buildings yourself? Could you partner with nearby restaurants to share a delivery team? Now is the time to think creatively about how to get food to customers – and to tell them how they can best support you.