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?

Service isn’t a traffic driver, it’s an expectation

Reading through some recent research conducted for brands has produced a resounding ‘Meh’ on the topic of service. The research, which is confidential, was deployed to identify clear drivers for an expanding brand. Though respondents rated the service above average and added many positive notes in the open ends, it is obvious that they don’t come to this brand for the service. And that they had a certain expectation from the category.

In research conducted by F&RM, service quality ranked second to ‘past experience’ for selecting a restaurant. Curiously, ‘friendly wait staff’ was sixth. We determined at that time that accuracy and efficiency are more important than friendliness. We also determined that the contrary to understanding, friendly does not equal quality.

There is so much focus on service in training. And it is absolutely important. Training staff in the finer points of service and making sure guests have a great experience is critical. Especially since past experience is the number one criteria for selecting their next restaurant.

But where does service actually fit in the experience? This is the tricky part for training in service. And also for guests in assessing service. If the server is busy and forgets to bring the check, that might be bad service. Where is the line? If the kitchen sends an incorrect order, the guest interprets that as bad service too.

Even when the service is flawless, it still doesn’t drive traffic. Guests expect a level of service. That expected level shifts with the restaurant and with the category. But they still walk into each meal with some ideas of how they will be treated. They expect a clean table (that doesn’t wobble). They expect the person they communicate with to know the menu and understand what they are ordering. They have an expectation of the time the order will take to prepare and get to their table. A guest’s positive experience in one in which everything goes off without a hitch.

An extremely positive experience, ie. memorable, is one in which the restaurant over-delivers on that expectation.

Even for the best operators it is a challenge to meet the ever rising consumer standard. People are spoiled for experiences, and brands invest ever more in improving them. But if brands hope to consistently create memorable experiences, this is what they’re up against. Expectation.

So brands are caught in a trap. Because consumers believe that anything less than the expectation they have should be met. Just to get them in the door. And a million things out of the control of an operator can ruin that expectation. Anything short, and they’re not back. Overachieve, and set the bar higher for future visits.

The key for brands is in how they manage those cases in which something goes awry. Most operations training focuses on creating the positive, managing to the average. For brands with hopes of keeping up in the experience economy that we’re now living in, the focus should shift to managing for negative. As communications teams have a plan in place for crises, so operators should have a plan for the millions of little ways a visit can go wrong.

Since most of those incidents are not unique, there’s no reason that they can’t be accounted for in training. Equip servers and counter staff with the tools to react – or even plan for – errors in operation. As we all know, most guests are annoyed with the problem, but grow more frustrated with poor handling of the initial mistake. Training for this can help meet the expectation.

The viral hype is on menus, not memes.

Every day it seems that there is a new viral sensation sweeping your social media feed. No, not the latest OK Go video, DJ Khaled snap or Kardashian whatever they do. Think food. First it was the Pinterest-ready cupcakes rendered in beautiful pastels. The next big thing was macarons. Then the cronut became a standout solo hit. Giant pizza slices. Brisket burrito. It feels like these new items hit the internet daily. Because they pretty much do.

Each new item attracts visitors to the restaurant, along with Likes, shares and clicks. And most of these items are the creations of independent restaurants. But major brands don’t fire off crave-worthy novelties at the same pace. Sure KFC had the Double Down, and now sister brand Taco Bell has the Naked Chicken Chalupa (look familiar?). But by-and-large, these items are few and far between.

They usually play like novelties invented just for the press release. Gimmicks like the Panera Bread “secret menu” attempt, designed to ride the success pioneered authentically by some brands but ultimately falling short. Outback Steakhouse’s 3 Point Bloomin’ Onion (topped with cheese fries and steak) was clearly built to get media attention. It failed to gain visitors because it just doesn’t look that good to eat.

Many viral hits across media are remixes. Music, movies, even viral videos about remixes.

For the restaurants that create the Sushi donut, initial traffic crashes the place. Traffic is the goal of major brands as well. But independents, strapped for resources, fail to capitalize by moving those there to try the viral hit onto more mainstream menu items. Major QSR, Fast Casual and Casual Dining brands have the R+D departments but somehow fail to innovate.

So, what’s different?

The Double Down success was as much a product of its curiosity inducing form as it was the media buy that gave it visibility. It was never intended to be a mainstay on the menu at KFC. But it also failed to create serious levels of demand, unlike the buffalo chicken chimichanga. These are the items that younger guests seek because they’re not only looking for unique food experiences, but they’re looking for things to share on social media.

Taco Bell is well positioned to launch a string of viral food hits. They have the food oddity gene in their DNA by virtue of the co-opted nature of their Amexican cuisine and history of flavor combinations like the Doritos Locos tacos. Taco Bell also has the top viral audience coming in daily. And now for Waffle Tacos. So why aren’t sales continuing to rise?

The food that goes viral have something else in common. Like Taco Bell, they are remixes of popular items. Sushi and Donuts for example. Unlike Taco Bell, they tend to cross culinary lines that brands locked into a corporate flavor profile have trouble finding. The cronut, maybe the item that started the viral food trend, seems simple. But French pastry techniques and good old deep fried dough had never been cross pollinated, despite sitting next to each other on New York City bakery shelves for decades.

Many viral hits across media are remixes. Music, movies, even viral videos about remixes. Fragmentation has rendered mass attention harder than ever to earn. Artists and media seek to leverage known properties, or very, very familiar ideas to draw a bigger initial audience. The easier it is to explain, the bigger the audience opportunity.

In light of the change in culture, brands need to find their own Sushi Donut that will attract initial attention, drive trial and allow for menu exploration down the road. Mixing favorite flavors is one recipe for viral success. Creativity doesn’t have to be original to be successful.