Tech Talk: Is the Delivery Dilemma Over?

Many restaurant industry headlines in 2017 revolved around the subject of delivery with major players testing the waters or expanding delivery programs to meet customer demand. Modern Restaurant Management (MRM) magazine surveyed industry experts for their views on whether the delivery dilemma was over and what to expect in the year ahead. If a restaurant wasn’t on the delivery bandwagon, can they catch up?

To see a companion piece on this subject, click here.

Mike Arenth, CEO, HotSchedules

Delivery demand can be very fluid.

Foodservice delivery remains a very attractive opportunity for restaurant operators. Research firm NPD Group has estimated that off-premise foodservice orders will outpace overall restaurant industry traffic growth over the next decade. But delivery demand can be very fluid. Weather, major sporting events, holidays, and more can all significantly impact demand for delivery, and the staff required to fulfill that demand – sometimes expected and often unexpected. 

Intelligent back office technology with advanced forecasting and machine-learning capabilities – which are key to HotSchedules’ Clarifi intelligent restaurant operating platform – turns this external data into actionable insights that help restaurants determine, for example, how many extra drivers or cooks they might need to meet increased delivery demands. 

Victoria Brady, VP of Caterer Partnerships, ezCater 

It’s never too late! But the question goes beyond asking how you can do delivery, to how you can do delivery well. Delivery is about more than just having the option; it’s about providing your customer with a quality product in the most convenient way.

Consumers can get everything dropped off right at their door, from their groceries to razors to new clothes, and they are not willing to sacrifice quality to get it. So, put a team together, explore your options, and come up with a plan. You may choose to execute start to finish on your own, or you can find the right partners to fill in the gaps help you get there faster.

Marylise Fabro, Hostme’s Chief Marketing Officer 

Delivery is a different business and quality and order accuracy have to be even higher than for in-house guests.

I don’t think the dilemma will ever be over as it pertains to each and every restaurant owners to figure out what will work for them. Restaurants first need to take a step back and figure out if delivery is a good strategy for them. For instance, can their food sustained the delivery process and still be delightful upon arrival. Or for high end restaurants, food delivery may clash with their brand and reputation. 

Once restaurants have figured out if delivery is something they want to offer, they can research the different delivery companies available in their area. It may take some persistence to be listed on UberEats or Grubhub, but that’s probably the most efficient and low cost solution readily available. Being listed on those sites is also an incredible marketing tools. They will allow guests to find new places to eat and try them out. That’s a nice perks from those sites. 

Noah Glass, Founder & CEO, Olo

With consumer demand for convenience only continuing to increase, delivery represents a huge opportunity for the restaurant industry. While a full 62 percent of food transactions are consumed outside of the physical restaurant, only three percent of those are delivery orders.

Today there are a number of opportunities and partners restaurants can leverage to offer delivery without having to invest in mobilizing their own a delivery operation, including using Olo’s Dispatch delivery network to engage third-party delivery service providers (DSPs); or our Olo Rails platform, which seamlessly syncs a restaurant’s menu, availability, and POS details with food delivery marketplaces.

Danielle Lackey, Motus General Counsel

The rise of the gig (freelance) economy presents interesting considerations for restaurant delivery operations.

The success of mobile food delivery apps like UberEats and DoorDash, coupled with a decline in restaurant industry traffic, is fueling the delivery dilemma. If they find that they’re behind the trend, restaurant owners still have an opportunity to catch up by adopting new delivery operations or streamlining existing ones.

Whether they outsource delivery services to third-party companies, or hire their own delivery drivers, owners will need to ask critical questions such as “How can I keep drivers around and happy?” “How does the delivery experience enhance my brand” and “Am I reimbursing drivers in compliance with each state’s unique labor laws” (e.g., CA, MA, NH). Without asking these questions, restaurants can leave themselves exposed to logistical challenges, undue expenses, and potentially even costly lawsuits (e.g., Domino’s). 

The rise of the gig (freelance) economy presents interesting considerations for restaurant delivery operations. Traditional delivery models that classify drivers as W2 employees are being challenged by a large, mobile and technology-savvy freelance population that wants to work under more flexible terms. Class action lawsuits alleging that freelance 1099 workers are in fact misclassified W2 employees—and therefore entitled to the full suite of benefits that go along with employment—have received significant media coverage as of late. Conversely, restaurants that have employed their drivers as W2 workers have faced extensive litigation and settlement costs for alleged inaccurate reimbursements of vehicle operating expenses. Whether drivers should be considered contractors (1099 workers) or employees (W2 workers) is a hot-button issue, and one that restaurant owners need to consider.

Lee Leet, QSR Automations CEO and Founder 

It’s not a matter of should we do delivery, it’s how are we going to do delivery and how do we prepare for it. From a technology standpoint, this creates a lot of opportunity.

Real-time data in the kitchen is the key.

Currently, operators are investing in multiple entry points for ordering, like delivery partners or point-of-sales but really the focus needs to be on their kitchen and how will they be able to complete orders as they open more revenue streams.

Real-time data in the kitchen is the key – this data ensures that operators are taking on orders based on the capacity of their kitchen and quote accurate delivery and pickup times back to partners and consumers.”

Jason Smylie, President of Capriotti’s

The luxury of having on demand ‘everything’ is turning into a consumer expectation. 

Is your smoke detector out and you need some 9V batteries? No problem, Amazon Prime Now has you covered. Want your favorite sandwich delivered in about 30 minutes? In most major cities a multitude of delivery services are competing to get you your grub. There’s no turning back, the luxury of having on demand “everything” is turning into a consumer expectation. 

Third party aggregators have transformed the way customers decide on what they are going to eat for lunch. The NRA’s 2017 Restaurant Industry Forecast reports that 63 percent of smartphone users occasionally use them to order takeout or delivery. 

Even if you believe delivery to be too costly or risky, the opportunity cost of not having a delivery option in 2018 may prove to be of even more cost in the end.