Third-Party Delivery No Longer Optional
Forget whatever you’re hearing about the tax bill, smaller-format locations or hot trends in M&A. There is one dominant trend in the restaurant world that everybody is paying attention to and it’s third-party delivery. This subject is everywhere on the agenda and in soda break conversations at the Restaurant Finance & Development Conference. It’s almost as inescapable of blue suits, which are clearly in the running for second place.
On the expo and seminar circuit last year, I was generally dismayed by what I heard on the topic of third-party delivery. Most of the talk was speculative, curious how some brands were making it work, and the general feel was that the restaurant industry wasn’t sure this delivery stuff was a blip or a mega-trend. Now it’s clear, the energy has shifted and delivery is poised to explode from an incremental gain for restaurants into something they absolutely must do in terms of brand marketing, sales growth and attracting the most tech-heavy, soon-to-be-affluent customers out there.
Maybe I’m biased because I work on a really fun new media project called Food On Demand that’s all about third-party delivery—check out our upcoming conference in March!!—but there’s now one major trend in the restaurant world and it’s delivery.
I just attended Fred LeFranc’s “The Third Wave” Delivery Strategies Front and Center” panel at RFDC, and this was the best seminar I’ve ever heard about delivery. I don’t say that because our parent company sponsors and organizes this event. The panelists, including Srini Kumar Craftworks Restaurants & Breweries, Jonathan Rollo of Jonathan Rollo of Greenleaf Gourmet Chopshop and Paul Motenko of Stacked Restaurants were all unanimous, that there’s no way to shy away from delivery, even with all the issues that it presents for restaurants.
Those issues, by the way, are nothing to sneeze at. With most delivery firms taking anywhere from 12 to 30 percent of each ticket, third-party delivery drivers that sometimes don’t look as presentable as restaurant brands would like, and issues of packaging, marketing spend and legal liability to name a few, third-party delivery is an industry with a lot of kinks to work out as it grows and consolidates.
I’ll be digging deeper into the analysis that each of these panelists offered, along with LeFranc who was an excellent moderator with much to add to the conversation, the full audience, next-level questions and much deeper subject matter are all a dramatic shift from the tone I heard just a year ago.
Delivery is major, and will soon comprise a much, much larger chunk of the total U.S. restaurant spend. Your restaurant better have a plan for joining this rat race. If you don’t, the rest of the industry is waiting in the shadows, and they might be much further along in the ongoing process of trial and error that seems to be a requirement for making any real money with delivery.