STORE TO DOOR Delivery growth is phenomenal. Build it into your operations and facilities now before your competitors pass you by. Ever feel like the pace of change is growing so fast that you can’t keep up? Better get ready to experience some serious g-force in the next few years when it comes to food delivery. Delivery orders last year accounted for about 3% of total restaurant sales, according to The NPD Group. Hardly seems like much until you take into ac- count that’s 3% of $541 billion. Senior Contributing Editor Restaurant patrons only sat down to eat 37% of the time last year. Carryout visits surpassed that at 39%, and 21% of transactions came from the drive-thru, demonstrating how little time consumers have for Pizza chains used to rule food restaurant dining. Demand for delivery is exploding By Michael Sherer, By Michael Sherer, delivery but with the Internet and as more services are making it easier than ever for now smartphone apps, operators, consumers—and operators—to have food delivered. chains and independents, large Delivery has been around for about 70 years. Even so, at and small, are getting into the the turn of the century, (doesn’t that sound quaint?), if you game. Looking to get started? wanted to be a couch potato and eat restaurant food at You basically have three options: home, your choices were limited to pizza, Chinese food, in-house delivery, third-party and a few local mom-and-pop restaurants. You either had aggregators (like DoorDash) or to pick it up yourself or fi nd eateries willing to hire driv- a combination of the two. ers to deliver the goods. Most people perused phone directories for restaurants and ordered by phone. As online review sites like Yelp cropped up around 2005, fi nding a restaurant that delivered got easier, and people ordered by both phone and fax. The expansion of the Internet convinced a lot of operators to establish their own online presence, and with that online ordering grew more common after ’10. 48 FEBRUARY 2018 fermag.com fermag.com FEBRUARY 2018 49 The ubiquity of smartphones is what’s now driving both you aren’t offering delivery yet, bet- Consider how you’ll every single touch-point, from the driver’s uniform to the These services assume all the logistics and responsibili- online ordering and the demand for delivery. With a vari- ter gear up now before all the other maintain food qual- giveaways they distribute.” ties of getting food from your store to the consumer as well ety of apps, customers can fi nd a list of food and restaurant kids on the block pass you by. So, ity that last mile of The drawbacks are the high cost of labor as well as insur- as providing a mobile ordering and payment platform for choices at their fi ngertips, select one, choose menu items, what are your options? delivery. Domino’s ance, maintenance and operating costs of vehicles if you customers. All you do is sign up for the service and the pay, and get a meal placed in their hands in 15 to 30 min- In-house. The classic model of has a Chevy with a own the fl eet. aggregator incorporates your logo and menu into its app. utes with just a few taps on a smartphone screen. delivery is the enterprising restau- warming oven to keep Third-party aggregators. The demand for delivery has Even noncommercial outlets like a hospital cafeteria trying rant that hires hourly employees, pizzas hot. The Halal fostered an explosion in the number of services—and to expand its business can sign up and benefi t. Three Models preferably with their own cars, to Guys has changed its smartphone apps—springing up around the world. Those “The biggest benefi t to using a partner,” says Toby Of course, it isn’t just smartphone apps that have driven run orders from the store to the con- food packaging—from that got in early and found fi nancing and/ Espinosa, Head of Business Development at DoorDash, the growth in delivery trend. It’s the general consumer sumer’s door. Perhaps no segment an aluminum tray with or investors to help them San Francisco, “is that we focus on driving incremental trend of shopping online and having everything delivered. has adopted this model as well or as a clear lid for dine-in grow quickly—Seam- volume and superior logistics technology at a much lower Services like Amazon Prime have conditioned consumers completely as pizza chains. Some patrons, to a paper lid less/GrubHub, Caviar, price than it would cost to do in-house. Restaurants are to both expect the convenience of delivery and expect it have even purchased fl eets of their for delivery because it EatStreet, Foodora, then empowered to focus on what they know best, making quickly. And ride services such as Uber have put legions of own vehicles for their drivers to holds heat better. EHungry, Foodler—have delicious food.” The major downsides are being lumped in with a large percentage of the restaurants in your area, the inabil- ity to control the delivery experience itself, and the cost, usually a commission that can range from about 12% to 35%. The high end is often more than a small store’s gross profi t margin. Hybrids. “Operators who want to design and control their own online presence use e-commerce providers like us,” says Marty Hahnfeld, COO of Olo, New York City, “and are adding delivery to the brand’s e-commerce site.” Software logistics platform providers such as Olo, Bringg, Orders2Me and Ordering Inc., develop operator-specifi c online/mobile ordering and delivery logistics software that drives e-com- merce on both the operator’s online and mobile e-commerce sites, and then help the operator contract with expanded into national, one or two delivery services such as UberEats, Postmates, DOMINO’S Courtesy of Midland Reporter-Telegram; photo by Tim Fischer HALAL GUYS even international Caviar, DoorDash or GrubHub depending on the market. (Deliveroo, Just Eat), And new concepts are cropping up all the time. Olo, potential delivery drivers on the street. use. Pizza Hut is well known for its branded hot boxes on entities. Others such as UberEats, Amazon Restaurants, for example, was originally designed as an “order ahead” Millennials, especially, see food delivery as a natural the back of motor scooters as well as its emblazoned Smart DoorDash, Postmates, and Eat24 (Yelp) simply added food system. Its trademarked “Skip The Line” slogan was ad- outgrowth of both the technology and societal trends Cars. Domino’s unveiled its DXP—a converted Chevy or delivery on to other services they already offered. opted by operators like Starbucks, whose typical order is they’ve grown up with. The big boys are sitting up and tak- Sparks with a warming oven that holds up to 80 pizzas— But the restaurant scene, especially independents, is too small for delivery. Instead, Starbucks customers place ing notice. McDonald’s is running a TV campaign advertis- two years ago. local, and many markets are too small or too remote for orders on the chain’s e-commerce site for the store nearest ing its delivery service. Burger King, which jumped the “Owning the supply chain all the way to the customer coverage by the big names. Which means that a plethora of them, and the order is waiting for them when they go to gun by testing delivery fi ve or six years ago, announced it’s enables businesses to control the entire customer expe- other services like Waitr, WaiterOnTheWay, Dine-InDeliv- pick it up. back in the game. Even fi ne-dining restaurants like Momo- rience,” says Raanan Cohen, CEO of software logistics ery, BringMeThat, MyTown2Go, SkipTheDishes, Zomato Ritual, a new social media app, allows employees in fuku Má Pêche in New York City now offer food delivery. If platform Bringg, Tel Aviv, Israel, “leveraging their brand at and Swiggy cover territory others haven’t yet reached. the same company to fi nd out what others in their “circle” 50 FEBRUARY 2018 fermag.com fermag.com FEBRUARY 2018 51 want for lunch, for example, ees to assemble orders for delivery drivers as same time. At peak times now, we may have two or three handle digital orders as well as catering. And Starbucks is pick a restaurant and gang they arrive, or beef up staffi ng in the kitchen employees dedicated to delivery orders.” looking into something similar to better manage its queue the orders for the res- to keep up with production at busy times. of in-house and “Skip The Line” digital orders. taurant. It also alerts Space, too, may come at a premium Reconfi guring Your Space “We are fortunate to have two kitchen lines in every one people in a group when you add delivery orders to your The San Francisco store already had a warming cabinet for of our restaurants since we have inside business and drive- when one of them normal mix. Panera Bread Founder delivery and take-out orders, but moving it closer to the thru business at every location,” says Nick Scarpino, V.P. is placing an order; and former CEO Ron Shaich once pick-up area saved employees valuable time and reduced of Marketing and Public Relations, Portillo’s Restaurant people can then referred to the mass of people in congestion behind the counter. In newer stores the com- Group, Oak Brook, Ill. “The second line has the capacity to ask that person to the order pick-up area near the pany is adding more counter space with a separate area for handle delivery orders even during our busiest times.” pick up an order cash register as “the mosh pit.” delivery drivers.