Due to social and physical distancing measures, people have been enjoying restaurant food from the comfort of home. As restaurants adjust to this new normal, we expect delivery to be a core part of foodservice operations, especially as consumers’ health and safety concerns will be heightened for a while.
Whether you started delivering food during the crisis, were doing it long before, or have yet to try it, now is the time to look at your options and decide which solution is the most sustainable for your business.
What to expect for the future of delivery
In 2019, 45% of restaurant food was consumed onsite, but take-out and delivery were already becoming a powerful source of revenue. Demand for delivery increased by 20% compared to the previous year1 – and while that’s impressive, it’s safe to say that 2020’s numbers will likely be higher. Not only because of temporary social distancing measures, but because individuals and authorities will probably be more cautious about group gatherings. A recent survey found that 74% of consumers will be hesitant to return to restaurants for at least one month once dining rooms reopen2. Off-premise consumption will likely rise as a result.
During the crisis, 22% of operators started offering delivery, and 65% saw an increase in delivery orders3. Lots of restaurants turned to third-parties as a lifeline: these apps and platforms can be set up very quickly, and many waived or reduced their service fees. Restaurants who took this route will need to ask themselves if third-party services are still worth it once their fees bounce back to full price.
So, what should you expect? Experts predict that delivery services will gain even more market share in the future and that there will be more operator-run delivery services in the future. Customers have been getting used to free delivery, since it’s being used as an incentive to increase orders – however, that’s not entirely sustainable. Restaurants are therefore likely to choose in-house delivery to remain competitive, since it’s less expensive in many ways, which will allow them to offer lower prices for their consumers.
Choosing a sustainable delivery approach
No matter what type of delivery you’ve been offering during the crisis so far, you’ll need to make sure your approach is sustainable moving forward.
- Turnkey service: Third-party delivery is quick and easy. There’s no need to hire drivers, set up an online ordering platform, add staff to the payroll, or manage the associated operations.
- More visibility: Popular third-party apps give you the chance to reach more potential consumers. You can also pay to promote your restaurant at the top of the list.
- Lower profit margins: The above-mentioned pros come at a price. These apps take a percentage of each bill (between 10% and 40%) and charge a startup fee when you sign up.
- Instant cash flow: When consumers pay for their food, the money is in your hands immediately, instead of waiting for a weekly or monthly payout. Plus, you keep all the profits.
- Full control of your reputation: You choose your drivers and your ordering platform, allowing you to keep a close eye on customer satisfaction and the way your brand is represented on the road.
- More responsibility: Delivery is a big job. You need to pay your drivers, buy insurance and gas, implement health protocols, train new staff, and manage orders and complaints.
Want to keep your delivery in-house? Here's how
In-house delivery can be a profitable option as long as you have the proper resources. Expert chef Chris Beall told us all about the steps you should take if you decide to go this route.
- Find staff to manage your ordering and delivery system. While dining rooms are closed or at low capacity, your servers, hosts, or bartenders can take orders by phone or manage your online order platform. If needed, use your social media, local job pages, and neighbourhood social media pages to spread the word while foot traffic is low.
- Find transportation. First, check with your insurance about whether your plan covers delivery services. If you can’t provide cars for your delivery drivers, look for candidates who have their own. You can even use bicycles to deliver food locally, which requires much less money. It’s as simple as buying some insulated square delivery bags made to fit on a bike’s rear rack
- Offer online ordering. An easy way to offer online ordering without paying for a third-party service or a website update is to take orders via direct messaging on social media. Simply provide ordering instructions on your social page, then make sure someone is able to monitor your inbox and respond quickly.
- Consider online payment. If you have an online order platform on your website, consider adding the option to pay upon ordering, and gently remind consumers to add a tip for their delivery driver!
- Set up a safe pick-up process for your drivers. Give them access to a place to wash their hands every time they return, and make sure they know how to safely pick up and deliver food.
- If you choose to offer in-house and third-party delivery, make your in-house option more attractive by offering a 10% discount. That’s still less than third parties’ 10% to 40% cut.
- Make sure people know about your delivery service. Advertise it online and participate in community initiatives like #takeoutday.
It’s safe to assume delivery is going to become a pillar of the foodservice industry. Now is the time to think about which solution will serve your business in the long run, whether it’s third party delivery, in-house delivery, or both. No matter what you decide, make sure your consumers are getting the best possible service.
1 Delivery and Pizza Dynamics in Commercial Foodservice, NPD Group, 2019.
2 2020 technomic COVID-19 Canada Consumer Tracker.
3 Technomic COVID-19 Operator Survey Week of March 22nd, 2020.