Archive for General Information

3 Ways Digital Food Delivery May Impact the Restaurant Industry

 

Convenience is taking over the restaurant industry. What were once traditional restaurants and fast food establishments now have the opportunity to compete with restaurants that offer delivery services in an efficient, cost effective manner.

Digital delivery is making headlines as Uber continues to roll out its UberEATS program across the country over the last several months and again highlight food delivery apps.

It’s very similar to other digital delivery programs such as GrubHub , DoorDash, and Seamless – use the app, order food from a participating restaurant, and then sit back and wait for delivery.

So how does this impact the industry overall?

  • It makes things a bit tougher for “traditional delivery” restaurants, those who have always offered delivery services. With digital delivery options increasing, it puts some pressure on these traditional restaurants – their range of competitors opens up a bit, at least for the short term, so they need to make sure their value, service, and quality are prominently displayed. Considering upgrading their services to maybe include online ordering, if not available, may help offset the new competition.

 

  • Even casual dining restaurants may struggle a bit more than quick serve or fast food establishments who turn to food delivery app programs. A recent article states that the margin on delivery programs may be problematic for casual dining establishments (think Buffalo Wild Wings or Red Robin) while the impact on sales will not hurt fast food/fast casual restaurants such as Chipotle, Shake Shack, and Dunkin. These quick serve restaurants can benefit from digital delivery, as the margin will not impact sales as significantly.

 

  • While restaurants jumping into the delivery arena have a great opportunity, they will stilll need to implement new procedures and systems to accomodate this new service. While it’s not as significant as it would be if they were to start up their own in-house delivery service, it’s important to carefully considering the upgrades & adjustments BEFORE jumping in to a GrubHub or UberEATS – if your restaurant can’t handle the increased business, it won’t matter how much business these apps bring in. You will quickly lose those customers who have a poor first experience.

While delivery apps are definitely changing the restaurant industry, technology will not likely have the same impact as it has for retail. However, convenience reigns supreme, so restaurants of all types need to pay attention to the latest trends. But, should your restaurant join in the latest trend right away?

Maybe. Before jumping in just because it’s the new thing to do and “everyone is doing it” plan carefully, decide if it’s truly worth it, and let it play out a while before jumping in – by hesitating a bit, you’ll be sure that the trend is viable and worth getting into while having a solid plan in place to provide seamless service across all touchpoints.

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How to Calculate NPS

 

Net Promoter Score

 

Net Promoter Score (NPS) can be a helpful snapshot of satisfaction and to learn more about consumers who are detractors, promoters, and passives. If you are collecting NPS data from multiple sources, you may be wondering how to calculate this score manually.

If you’re not familiar, NPS is a score that measures satisfaction. It’s based on one question you may see often on customer feedback surveys, asked on phone interviews, or even see on mystery shopping reports.

The question is quite simple: “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or colleague?”

There are two data points to look at – the actual score given and the NPS score.

The actual scores, of course, range from 0 to 10, with 10 being the most satisfied. This is a helpful data point to look at for determining which customers, or how many customers, are detractors, promoters, or passive. This is how each category is defined:

Detractors are those giving ratings 6 and below. They are not particularly thrilled by the product or the service. They, with all likelihood, won’t purchase again from the company, could potentially damage the company’s reputation through negative word of mouth.

Passives are those giving ratings of 7 or 8. They are somewhat satisfied but could easily switch to a competitor’s offering if given the opportunity. They probably wouldn’t spread any negative word-of-mouth, but are not enthusiastic enough about your products or services to actually promote them.

Promoters are those giving ratings of 9 or 10. They love the company’s products and services. They are the repeat buyers, are the enthusiastic evangelist who recommends the company products and services to other potential buyers.

The second data point is the actual NPS score, which can range from -100 to 100. This is calculated by subtracting the detractors from the promoters – sounds easy, right? But what happens when you are collecting NPS data from multiple sources and end up with a spreadsheet of data? It could take all day to try to calculate manually. There is an easy formula to calculate this in Excel, and it only takes a few minutes.

Once you have your column of NPS data, you’ll want to add a formula to calculate your score.

The formula is: =100*(COUNTIF(BU2:BU27,”>8″) COUNTIF(BU2:BU27,”<7″))/COUNT(BU2:BU27)

In the example above, it assumes that your NPS scores are located in column B, rows 2 through 27. To make this formula work for you, all you need to do is change out BU2 and BU27 to the column and row numbers that contain your data.

Let’s take a look at a quick example of how the formula would change based on your data. If this is what your spreadsheet looks like, with the last column (E) being the data for NPS, which goes from row 2 through row 43:

 

 

Then your formula would look like this:

The formula is: =100*(COUNTIF(E2:E43,”>8″)-COUNTIF(E2:E27,”<7″))/COUNT(E2:E27)

All it took was a quick replace of BU with E.

NPS is a great tool to get a quick snapshot of satisfaction levels; it’s no longer a chore to calculate it manually across multiple touch points, so make sure you’re asking that very important question at every opportunity possible!

 

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Is Amazon Playing Defense To Walmart?

It blows my mind that retail has come to Amazon vs Walmart.

Walmart. Really?

It seems so, and Amazon has taken notice.

It seemed to start with Walmart’s purchase of Jet.com … that was the first time people started paying attention to the fact that Walmart was eyeing Amazon as the one to beat. And back then, to many, it seemed like a futile attempt on Walmart’s part.

At that point, Walmart’s “ship to store” and “buy online, pick up in store” were painful to be nice. Ship to store would take up to 7 days, even at a time where Kohl’s was stepping in with two to four hour pick up windows. What was even more jarring was when you’d order something online to pick up in store, be told to wait 7 days, but visit the store in the meantime and see that item on the shelf, ready to go. Made no sense.

They also toyed with the idea of hiring customers to deliver online purchases and, more recently, having employees deliver orders on their way home from work. Many saw these as feeble attempts to try to be like Amazon, even if just a little.

But then the retailer got serious.

It seems that the purchase of Jet.com started something big between the two retailers. Amazon started to take notice, and Walmart steadied itself and became more significant.

Outside of buying Jet.com, what else has Walmart done?

  • Made significant improvements to its Ship to Store and Buy online, pickup in store features.

 

  • Implemented a two day delivery program (dubbed ShippingPass) at a reduced rate of $49.99 a year compared to Amazon’s Prime at $99.00 a year.

 

  • Walmart quickly ditched this program, refunded ShippingPass members who paid the membership fee, and lowered the minimum purchase to qualify for free shipping to $35 to be more in line with Amazon.

Earlier this month, Amazon took a big swipe at Walmart and the grocery industry by announcing the purchase of Whole Foods. Unfortunately, this major announcement trumped Walmart’s announcement, which came only hours later, that the purchased Bonobos, a men’s online retailer, in an attempt to continue to expand their online presence.

It’s been fascinating to watch these two retailers to see what happens next.

But why is Amazon seemingly most worried about Walmart, more so than other retail giants such as Target? It’s simple:

 Wal-Mart has stores within 10 miles of 90% of the U.S. population.

Walmart doesn’t need to worry about drone delivery, or addign distribution centers; they are already in place via their retail stores. By increasing their footprint online, they’re positioning the company to be a main competitor to Amazon.

While it’s interesting to watch how this develops over time, it’s sobering to remember that these two companies are responsible for the changing landscape of retail. Right now it seems like it’s hurting the industry overall, with some long standing retailers hurting to the point of potentially going out of business. However, change is not always negative, and while this appears to be a rough spot across the industry, the changes may be for the positive in the long run. Only time will tell.

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