Ever feel like the pace of change is growing so fast that you can’t keep up? Better get ready to experience some serious g-force in the next few years when it comes to food delivery. Delivery orders last year accounted for about 3% of total restaurant sales, according to The NPD Group. Hardly seems like much until you take into ac- count that’s 3% of $541 billion. Restaurant patrons only sat down to eat 37% of the time last year. Carryout visits surpassed that at 39%, and 21% of transactions came from the drive-thru, demonstrating how little time consumers have for restaurant dining. Demand for delivery is exploding as more services are making it easier than ever for consumers—and operators—to have food delivered. Delivery has been around for about 70 years. Even so, at the turn of the century, (doesn’t that sound quaint?), if you wanted to be a couch potato and eat restaurant food at home, your choices were limited to pizza, Chinese food, and a few local mom-and-pop restaurants. You either had to pick it up yourself or find eateries willing to hire driv- ers to deliver the goods. Most people perused phone directories for restaurants and ordered by phone. As online review sites like Yelp cropped up around 2005, finding a restaurant that delivered got easier, and people ordered by both phone and fax. The expansion of the Internet convinced a lot of operators to establish their own online presence, and with that online ordering grew more common after ’10. Delivery growth is phenomenal. Build it into your operations and facilities now before your competitors pass you by. By Michael Sherer, Senior Contributing Editor 48 FEBRUARY 2018 fermag.com fermag.com FEBRUARY 2018 49 Pizza chains used to rule food delivery but with the Internet and now smartphone apps, operators, chains and independents, large and small, are getting into the game. Looking to get started? You basically have three options: in-house delivery, third-party aggregators (like DoorDash) or a combination of the two. STORE TO DOOR
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Ever feel like the pace of change is growing so fast
that you can’t keep up? Better get ready to experience
some serious g-force in the next few years when it comes
to food delivery. Delivery orders last year accounted for
about 3% of total restaurant sales, according to The NPD
Group. Hardly seems like much until you take into ac-
count that’s 3% of $541 billion.
Restaurant patrons only sat down to eat 37% of the
time last year. Carryout visits surpassed that at 39%,
and 21% of transactions came from the drive-thru,
demonstrating how little time consumers have for
restaurant dining. Demand for delivery is exploding
as more services are making it easier than ever for
consumers—and operators—to have food delivered.
Delivery has been around for about 70 years. Even so, at
the turn of the century, (doesn’t that sound quaint?), if you
wanted to be a couch potato and eat restaurant food at
home, your choices were limited to pizza, Chinese food,
and a few local mom-and-pop restaurants. You either had
to pick it up yourself or fi nd eateries willing to hire driv-
ers to deliver the goods.
Most people perused phone directories for restaurants
and ordered by phone. As online review sites like Yelp
cropped up around 2005, fi nding a restaurant that delivered
got easier, and people ordered by both phone and fax. The
expansion of the Internet convinced a lot of operators to establish
their own online presence, and with that online ordering grew more
common after ’10.
Delivery growth is phenomenal. Build it into your operations and facilities now before your competitors pass you by.
By
Mic
hae
l S
her
er, S
enio
r C
ontr
ibu
tin
g E
dit
or
48 FEBRUARY 2018 fermag.com fermag.com FEBRUARY 2018 49
Pizza chains used to rule food
delivery but with the Internet and
now smartphone apps, operators,
chains and independents, large
and small, are getting into the
game. Looking to get started?
You basically have three options:
in-house delivery, third-party
aggregators (like DoorDash) or
a combination of the two.
STORE TO DOOR
the pace of change is growing so fast
some serious g-force in the next few years when it comes
about 3% of total restaurant sales, according to The NPD
Delivery growth is phenomenal. Build it into
cropped up around 2005, fi nding a restaurant that delivered
expansion of the Internet convinced a lot of operators to establish
their own online presence, and with that online ordering grew more
The ubiquity of smartphones is what’s now driving both
online ordering and the demand for delivery. With a vari-
ety of apps, customers can fi nd a list of food and restaurant
choices at their fi ngertips, select one, choose menu items,
pay, and get a meal placed in their hands in 15 to 30 min-
utes with just a few taps on a smartphone screen.
Three ModelsOf course, it isn’t just smartphone apps that have driven
the growth in delivery trend. It’s the general consumer
trend of shopping online and having everything delivered.
Services like Amazon Prime have conditioned consumers
to both expect the convenience of delivery and expect it
quickly. And ride services such as Uber have put legions of
potential delivery drivers on the street.
Millennials, especially, see food delivery as a natural
outgrowth of both the technology and societal trends
they’ve grown up with. The big boys are sitting up and tak-
ing notice. McDonald’s is running a TV campaign advertis-
ing its delivery service. Burger King, which jumped the
gun by testing delivery fi ve or six years ago, announced it’s
back in the game. Even fi ne-dining restaurants like Momo-
fuku Má Pêche in New York City now offer food delivery. If
you aren’t offering delivery yet, bet-
ter gear up now before all the other
kids on the block pass you by. So,
what are your options?
In-house. The classic model of
delivery is the enterprising restau-
rant that hires hourly employees,
preferably with their own cars, to
run orders from the store to the con-
sumer’s door. Perhaps no segment
has adopted this model as well or as
completely as pizza chains. Some
have even purchased fl eets of their
own vehicles for their drivers to
use. Pizza Hut is well known for its branded hot boxes on
the back of motor scooters as well as its emblazoned Smart
Cars. Domino’s unveiled its DXP—a converted Chevy
Sparks with a warming oven that holds up to 80 pizzas—
two years ago.
“Owning the supply chain all the way to the customer
enables businesses to control the entire customer expe-
rience,” says Raanan Cohen, CEO of software logistics
platform Bringg, Tel Aviv, Israel, “leveraging their brand at
50 FEBRUARY 2018 fermag.com fermag.com FEBRUARY 2018 51
every single touch-point, from the driver’s uniform to the
giveaways they distribute.”
The drawbacks are the high cost of labor as well as insur-
ance, maintenance and operating costs of vehicles if you
own the fl eet.
Third-party aggregators. The demand for delivery has
fostered an explosion in the number of services—and
smartphone apps—springing up around the world. Those
that got in early and found fi nancing and/
or investors to help them
grow quickly—Seam-
less/GrubHub, Caviar,
EatStreet, Foodora,
EHungry, Foodler—have
expanded into national,
even international
(Deliveroo, Just Eat),
entities. Others such as UberEats, Amazon Restaurants,
DoorDash, Postmates, and Eat24 (Yelp) simply added food
or delivery on to other services they already offered.
But the restaurant scene, especially independents, is
local, and many markets are too small or too remote for
coverage by the big names. Which means that a plethora of
other services like Waitr, WaiterOnTheWay, Dine-InDeliv-