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.
