How Food Delivery is Changing the Restaurant Landscape

The delivery craze is getting your food into the hands of more people. But are the compromised brand experience and revenue worth it?

We’ve all been there, you’re stuck at the office and it’s past 7PM and you’re hungry – there’s no time to run out so you cue up the UberEats app and get to work. In a world that used to be limited to pizza delivery to satisfy our late night cravings without heading out into the world, we now have choices at our fingertips and it doesn’t show any sign of stopping.

We know that the restaurant industry is always evolving, whether it is a new style of restaurant, a new way to manage POS or a disruption like food delivery. With millennials working more than ever and spending less time cooking at home, services like UberEats, Postmates and Doordash are making waves in the way consumers make purchase decisions.

In today’s on-demand economy, we want things when we want them and the expectation of quick delivery grows day by day. The food delivery industry is no different. In fact, the disruption being made by food delivery services is paving the way for other on-demand services to throw their hat in the ring.

When you think of a service like UberEats, it seems simple: You click on what you want, pay in the app and get it delivered to you ASAP. This is exactly why the service has become so appealing to restaurants. When a restaurant has a delivery driver on staff, they have to send them out and then wait for them to return, losing time and money in the process. With services like UberEats, the driver picks up the delivery and takes it where it needs to go – no need to return to the restaurant or wait around.

In today’s on-demand economy, we want things when we want them and the expectation of quick delivery grows day by day.

With the growing millennial population and their need to have everything right now, the on-demand trend shows no signs of stopping. Just recently, Amazon introduced their own brand of food delivery with Amazon Restaurants and Amazon Fresh – answering not only the restaurant delivery question, but bringing groceries along for the ride. By eliminating the need to leave home and freeing up more time for millennials to do the things they enjoy without having to worry about a grocery trip, Amazon has set themselves up for years of future success.

Downsides?

Of course, everything that glitters is not gold. There are downsides to these types of services that restaurants must address. The main concern is handing the hospitality that you have cultivated in your restaurant over to a third party. Once food is prepared, packaged and handed to the delivery driver, the restaurant loses control of the product and customer service.

Additionally, delivery apps are taking 20-30% off the top of each order which can spell trouble for a restaurant that is not booming with delivery orders. Restaurants who use these services are realizing that although the additional orders are coming in because of these delivery apps, the commission that is being taken off the top is counterproductive to the additional sales.

With the pros and cons of these delivery services, it is easy to see why deciding to utilize one as a restaurant brand is such a tough decision. The on-demand culture that we are building lends itself to wanting more and more of these services by the day. Without an end in sight, restaurants need to take a look at the value added versus the revenue lost and determine if this is a trend worth taking a risk on.

As a society, we continue to side with convenience and ease when it comes to dining decisions and restaurants have an opportunity here to make things easier than ever for customers – but at what cost?

Three Steps for an Applebee’s Turnaround

Applebee’s recorded a 7.2% drop in Same-Store Sales (Fortune) in the 4th quarter of 2016. With the end of Q1 of 2017 looming, my assumption is that it’ll be their 7th consecutive sales decline. With the recent resignation of DineEquity’s CEO and the hiring of iconic ad agency Grey, Applebee’s is no doubt gearing up for its attempt at a turnaround. Yet without three essential steps, Applebee’s will continue their downward trajectory.

Develop a tighter, more defined brand.

I’m not talking about a tagline like Neighborhood Grill and Bar. I mean actually define why you exist and your largest point of difference from your competition. When thinking about some of the brands in the casual dining category some have done a fairly decent job at differentiating to the consumer. Think Buffalo Wild Wings, Red Robin, Outback Steakhouse. Each brand has a theme.

What does Applebee’s specialize in? It’s not clear.

I’m not here to say that these brands are thriving and setting the pace for the restaurant industry, but remember that casual dining as a whole has had a rough two to three years and you have to give me a better reason than value alone for me to choose to dine at your restaurant. The brands above do that. This leads me to my next point.

Focus on your differentiator.

The brands mentioned above will always be on my shortlist if I’m thinking about or craving wings, burgers, or steaks. They deliver on what I’m craving and are established as specialized and innovators in what they specialize in. I can’t think of one thing Applebee’s specializes in. Nothing stands out for me. Even competitor TGI Friday’s while not specializing in a specific dish, is differentiating with its endless apps, which the company announced will be a permanent part of the menu.

Applebee’s is “famously” known as a grill and bar. So I was surprised when looking at their menu and there were stir-frys, pasta, tacos, and something called a fajita rollup. Hey, at least there wasn’t any Kale on the menu!. The menu read more like a Cheesecake Factory menu than Applebee’s. You’re a bar and grill. Give me fun, straight forward bar food. In today’s restaurant landscape, this would differentiate. I don’t want a caprese mozzarella burger from you, ever. Or a burger with an egg on it for that matter. Master the basic things that people love about bar food. You don’t even have onion rings as an appetizer!

Put the website to work.

Applebee’s website looks like it’s from 2006. There’s very little food imagery so there’s no craveability being created. The homepage isn’t responsive so it’s difficult to navigate to other pages on the website and the menu is filled with images of dishes shot at a distance, so it’s hard to see what a dish actually looks like. A website isn’t the most important channel for a restaurant brand but they need to improve the basics to get on the same level as their competition.

If Applebee’s takes these simple steps and give their audience a reason to come back and try them again, they have a chance to turn their slump around. It’s time for their people to listen to customers and vendors.

 

 

Exactly what is authentic cuisine today?

The word ‘authentic’ comes up nearly constantly. Brands have a pressure to be presented and understood as authentic. There’s a very good chance you will be disappointed by this article if you clicked for the answer to the title question. Because defining authentic cuisine is no simple task. There is no easy way for consumers to answer the question of what they believe is authentic. In fact, it’s easier to define what isn’t right that what is.

Authentic cuisine varies by region, nationality, experience and brand. If you grew up eating cooking from your family kitchen, a meal with the same name from anywhere else will seem wrong. It’s not cooked the way you’re used to, so something is off. This is why people endure ridiculous travel conditions to get home for Thanksgiving. Any other way isn’t home cooking; it isn’t the holiday.

Megan McCardle pulls the lens much wider in her piece from Bloomberg View. Tracing the true available ingredients and cooking methods of most common cuisines redefines most food as unrecognizable from the version we accept today. Not just inauthentic but totally different food.

If a consumer only ever had White Castle hamburgers, they would certainly not feel that Backyard Burgers was an authentic hamburger. Or any other kind except Krystal which is essentially the same thing. So, every consumer has a different sense of what an authentic burger experience is. But how does a burger brand define that when they’re trying to appeal to that same consumer? Because like brands, any cuisine is defined by so many factors and memories that it’s impossible for a brand to know what is right.

Natives of, or people that have spent time in a cuisine’s country of origin for example will be looking for certain cues about authenticity of the meal. There are ways around these. Pizza has found an interesting end around in the Fast Casual space which allows it to abstract authenticity with customization and wood fired ovens. The consumer is satisfied by controlling the experience and less focused on an authentic slice of New York pizza.

Is Olive Garden authentic? To an Italian citizen who travels to America, no. It will differ dramatically in most cases. It can’t be authentic Italian cuisine. But is it authentic in what the brand offers and to its core customers? As long as it delivers on the brand experience and expectation, it is. To thine own self be true. Every brand is struggling to be authentic; and in the logic of the Olive Garden example every brand can be.

More importantly, do consumers even care? There’s probably a reason most mass brands aren’t what we think of as authentic. Most people don’t care most of the time. A lot of consultants report that Millennials crave authenticity. Actually they want the right meal for the right occasion. Consumers are selective about when they want the experience they consider authentic. Day to day, people want what they know will meet their needs. Fast. Cheap. Flavor. Nearby. All things they can nail down. But authentic, not sure they can put their finger on that one.