People won’t care how you deliver the food.

There has been a lot of hype about food delivery over the past quarter. Longer, but it seems to be concentrated hype right now. Leading delivery brand, Postmates got a big investment, celebrity chef David Chang’s delivery service is growing. Brands are creating services and partnerships to optimize the way they deliver. UberEats is rolling out across the country. Jonathan Maze is pondering whether to-go and delivery is the savior of casual dining. The hue and cry for drone delivery is growing louder every day.

There is a battle raging to deliver consumers their food. And according to new research by Mintel, everybody is winning. 9 of 10 say delivery services make life more convenient. What does that tell you? People weren’t clamoring for a new way to get their pizza delivered. The high school kid dropping it off for a small tip worked just fine. The ask from consumers is for more restaurants and cuisines to be available by delivery. Unless you live in a handful of metros, that wasn’t a reality until this burst of services came on the scene.

65% of respondents said going to a restaurant was more fun than ordering in.

Don’t misunderstand the trend. Delivery is not the replacement for dining out. Delivery is the addition of an occasion without leaving home. Part of this is the same trend that was driving fast casual to overtake casual dining. Speed and convenience are king. Cater to my cravings and make it faster when I need it to be. In the same Mintel study, 65% of respondents said going to a restaurant was more fun than ordering in. Guess what – just about that same amount (63%) said delivery is more convenient than dining out. Surprise!

People aren’t saying they’re loyal to brands that deliver (though there is a subculture of people living solely off of Postmates and Seamless). These services may be new, but the problem is old. People are simply telling us that they are still looking for convenience.

There’s some people at the confluence of the restaurant industry and the tech industry who are looking at this as a disruption to restaurants. It’s actually the extraction of value that cuts margins for operators. Margins that are already thin and getting thinner with commodity prices, new types of competitors and laws adding salary pressure.

Brands will need to study the cost of any service they partner with to deliver their product. If there is an added service cost to the consumer, how does it affect the value proposition of the brand? Does your snack menu suddenly compete with entree prices elsewhere?

Beyond price, how does the service bring the food? Does it arrive in the same condition as when it left the kitchen? Long term, this can damage loyalty and erode occasions. There is a reason pizza is a traditional top-delivered food. It travels extremely well.

In the end, it doesn’t matter which pizza chain cracks drone delivery first. For a short while, people will order Domino’s by tweeting a pizza slice and drone emojis for the novelty. If it’s incrementally faster, drone delivery will survive. If it’s not any faster, they’ll go back to the old fashioned way – and just tweet the pizza slice emoji.

Eventually, there will be a shakeout. Delivery services will fold and consolidate. But restaurants that play it smart will remain. “Innovations” in delivery are a fad, unless they work.

Automats: restaurants and food with the absence of service

Eatsa is a restaurant concept from San Fransisco that offers a new take on service. Healthy bowls served without interacting with another human. The food is described as surprisingly good. But behind the high tech facade of Eatsa, people do take the orders and prepare the meals.

This is part of a trend in food towards automats. Burritobox, 24/7 Pizza and a wave of other brands are vying to become the Redbox of food. Each brand cites the success of technology and delivery services which eschew the traditional service of a restaurant and have seen big success. It’s true, Seamless is a success with younger consumers. Casual Dining concepts like Chili’s and The Olive Garden have added table side tablets to reduce server interaction and friction from dining experiences. McDonald’s and Panera are following suit.

There is certainly a novelty factor involved for many of these automated restaurants. Having your quinoa bowl delivered at the pushing a button or sushi prepared by a machine is a curiosity.

When a customer has a bad experience at an automated restaurant, brands will have to hope that they take to their app or to social media to complain if only so they can try to make it up to them.

And there’s no doubt that convenience is as important as ever. Consumers comfortable with ordering from apps and spoiled with choices have indicated in research and with their wallets that they avoid restaurants that are overly complex for some meal occasions. Have people become so eager to avoid interaction with other humans that they would choose a box restaurant concept?

There is an optimal time and place for any successful food concept. Rubio’s and Chipotle don’t have to close for Burritobox to find its customer base. They’re be indirect competitors. Consumers will choose the option that is appropriate for the time and place. Have an hour? Stop at a casual dining concept. Have a half-hour? Stop at Qdoba. Getting on a train? Burritobox.

Fears of Commoditization

While there may be a time and place for everything, too much availability makes anything less special. Especially food from what appears to be a vending machine. There is a reason the original Automats disappeared. Burritobox emphasizes that it is supplied with hand-made food that is checked for freshness and quality every day.

Removing the service element puts a lot of focus on the remaining experiential elements. For Eatsa, that means the user experience of pushing buttons to order, which people seem to enjoy so far. Even grocery which has stepped up prepared food offerings have some level of service. But in an automat environment, there is no service, and that puts a lot of pressure on the meal itself.

Let’s not forget that consumers can get pizza almost anywhere, and pretty high quality instant gratification products at c-stores thanks to concepts like Hunt Brothers. A pizza from a vending machine will still have to be cooked or heated; customers will still have to like it enough to come back or recommend it to anyone. Brands will have to convince consumers that a slice from the box is more than the microwave pizza they make at home.

In the case of Burritobox, there is no shortage of options up and down the experience chain. From Taco Bell at the mass-QSR level all the way up to Casual Dining and a host of stand-alone concepts. Burritobox will have to work very hard to earn trial and must really deliver on food experience to earn a second visit.

Sometimes a mistake is made in a restaurant that can be made up for by service staff with a smile, or an apology. When a customer has a bad experience at an automated restaurant, brands will have to hope that they take to their app or to social media to complain if only so they can try to make it up to them.

Not just demand-side benefits

Looking more closely at the automation that has taken off so far though, it may not be these trends that will drive growth. In fact, it might have more to do with real estate cost and site selection. A look at the Eatsa footprint shows that they cut out a lot of expensive square footage along with the front-of-house service area and counter holding those cash registers. In San Fransisco and New York where the brand is opening first, that’s a huge savings.

24/7 Pizza looks for local pizza brands to make the inventory for their boxes and displays their name. This gives a pizza brand an opportunity to expand without opening new storefronts or even investing in a real estate search. Redbox, the physical DVD rental vending machines popped up everywhere (even as Netflix beat Blockbuster Video into closing location after location). Growing restaurants can look at that model and borrow ideas.

Brands can also use this outlet to put their best foot forward. Restaurants using automated tech to expand beyond their existing locations can test the output of boxes and offer only their top menu items that are best executed in that environment. This way a consumer not familiar with their brand will have higher odds of an experience they want to repeat.

What restaurants can borrow from Meal Kit Delivery services

Services like Blue Apron, Chef’d, Plated have been a part of the rising tide of companies delivering the pre-set meal kit to customers since 2012. Market Research firm Packaged Facts predicted the meal kit industry would generate around $1.5 Billion in 2016. These companies have attracted the attention of investors, CPG brands, grocers and restaurants alike; each for their own obvious reasons.

Restaurants look on warily, fearing another category competitor carving away much needed traffic and revenue. We at Food and Restaurant Marketing have examined the most successful of the hundreds of meal kit brands to identify a few lessons restaurant chains could apply to their own business. It all starts with understanding why meal kits have been successful.

It is convenient

Well, sort of convenient. It’s delivered to the door of the customer, and is prepared on their schedule. But it does have to be prepared. And cleaned up. While there is convenience, it comes with a limitation that is understood by customers.

Restaurants have both of these same elements. Dining at a restaurant, getting takeout or delivery can be more convenient than grocery shopping and cooking. But waiting and other factors can diminish the value exchange of paying for the overall convenience of not cooking. Restaurants need to continue to look for ways to remove friction from their ordering experience when consumers are looking for that convenience. They don’t necessarily need to cut out all the stops for dine-in guests.

Takeaway: Focus on friction.

Restaurants can take advantage of this trend of adventurous eating by being bold.

Foodies love it

Meal kits have a tendency to feature unique or unexpected ingredients. This gives customers a chance to ‘experiment’ with a new flavor in a safe way. It also lets them explore many profiles of spice, protein and vegetable combinations than they might be able to shop for at their grocery store without guidance. The chefs at Blue Apron have already tested the flavor and assembled the kit.

Restaurants can take advantage of this trend of adventurous eating by being bold. Even if it means offering variations on successful menu items, brands can add spicier profiles and unique proteins where it makes sense. The rise in turmeric and other spices is a trend that has hit meal kits and CPG but not yet mainstream chains. This despite Technomic and others (see previous paragraph) calling for it.

Takeaway: Bring the flavor.

Balanced meals

Remember this concept? Meal kits do a great job of making sure customers get a square meal. Their meals come set with complementary fruit, vegetables and side dishes that all work together. And we’re not talking about the frozen peas and carrots that we know from TV dinners. As above, this is part of a trend of playing to foodie culture that has flourished with gourmet cooking content and celebrity chefs rising to prominence.

QSR and Fast Casual (and many, many Casual concepts) under-emphasize or else flat-out ignore meal balance. For a long time, guests looked past it and just had a meal with fries and a soda. We’re all more educated, even if the lesson is the same one taught in elementary school using the outdated food pyramid. How can your restaurant add vegetables or sides to the mix that make sense to your concept and will be embrace by your guest.

Takeaway: Side dishes can be the star.

There’s also something to be learned in where they fall short:

You can’t predict a craving.

It is great when you’ve pre-ordered that pork cutlet with green chiles, and it shows up three days later and you are still in the mood for it. Yes. However, when customers suffer multiple lapses in orders; when they pass on a meal that’s been delivered, we’ll begin to see attrition.

What most restaurants have going for them is the very thing that you cannot control. Making food that people crave. Know your guests, and continue catering to their tastes. They’ll come when they crave it.

Takeaway: Find ways to drive craving.

These along with other factors such as accurate portion size are reasons that meal kit services have blossomed in the US. But through careful study of their customers, restaurants can find keys to improving their offering, guest loyalty and new customer acquisition.