Have you ever returned home from work, intending on going out to eat at your favorite restaurant, only to be overcome by a wave of exhaustion? You cancel your reservations and then search for alternative dinner sources. These days, thanks to the dramatic increase in delivery services and takeout offerings, the number of ways to get dinner on the table has never been higher. And Americans in particular are taking advantage of this: according to research firm Mintel, “food delivery is estimated to be a $70 billion-a-year business in the US” and growing, with “plenty of room still for competition.” (Mintel, Restaurant Decision-Making Process – US, 2015)
As the proprietor of a restaurant, you are seeing this trend affect your bottom line in a negative way, since you now have to spend more money focusing on your takeout/delivery strategies. Here are five ways you can adjust your strategy and remain competitive as the frequency of takeout/delivery use rises.
1. Participate in all available home delivery services
Perhaps the most obvious consequence of this rising takeout/delivery trend is the need to leverage delivery services that you might not have intended on utilizing previously. Even if, up until now, you never planned for your food to be delivered, it is imperative to recover your lost sales by being present on all home delivery platforms. Leveraging services like Just Eat, GrubHub, Postmates, and UberEATS can expand your operations while keeping your expenses manageable – this will help compensate you for any loss in sales due to the increased preference for home delivery and takeout.
2. Optimize your restaurant layout and operations
Another more obvious consequence of the rise in takeout/delivery is the corresponding decline of those dining at your restaurant. Multiple tables and even entire sections might remain empty on certain nights. This impacts your restaurant in a few remarkable ways:
- It impacts the restaurant’s atmosphere in a negative way since there is less buzz, less chatter and ultimately less activity going on
- It makes the restaurant look unpopular and unappealing from the street as potential customers scan the window to evaluate whether they want to walk in and eat at your establishment
- You will end up with more inventory and pay for more labor than is needed
To address this, you can redesign your store to reduce the space for eating in and open up a dedicated area in the restaurant to make room for takeout patrons, as we did recently for a national fast-casual chain. If you are going to have a concerted focus on takeout, it’s important to ensure your takeout patrons do not impede on the dining experience of your restaurant guests.
Another way to address this issue is to reassess your inventory and labor needs – perhaps you can optimize these line items to reduce your expenditures and free up some capital to focus on the delivery/takeout part of your business. In fact, some businesses have already identified this strategic route and operate locations solely to service takeout patrons. Examples of this are often seen at independent burger joints, whose grab-and-go method of service enables them to keep patrons flowing in and out of their small space while avoiding the added labour and real estate costs associated with maintaining a dining area.
3. Leverage social media in a strategically sensible way
As the number of eat-in patrons dwindles, simply putting photography of your menu items on a social media platform will not drive sales or attract new customers. Leveraging social media is indeed important as it can reach current and potential customers at any time of the day and wherever they are – but your social media strategy needs to make strategic sense. For instance, if you notice that customers are taking food to go more often, it would make sense for you to offer a promotion through social media that incentivizes those takeout customers to try new menu items or increase their purchase frequency.
4. Re-evaluate your takeout/delivery packaging
Your current packaging for “leftovers” is most likely a kind of generic, non-branded, plastic/cardboard container. While these containers are perfectly functional for your takeout and delivery business, they can also become an opportunity to reinforce your brand. A packaging redesign should include your logo, have a unique or engaging design, and potentially be reusable – all such changes could serve as extensions of your brand experience. If your packaging is nondescript and flimsy, it could invite a negative first impression and might not fit with your restaurant’s image.
5. Refine your IT system to support a more robust CRM
Modern businesses increasingly use information as the driver for strategy, and the foodservice industry is no exception. If you install or expand your information technology capabilities to enhance the customer relationship management (CRM) element, you will be able to more successfully collect information to drive sales. With a CRM system, you will be able to track purchase preferences and then use that data to make targeted, specific recommendations for each customer. You can also use the CRM system to encourage loyalty, rewarding repeat customers with discounts or free food items. Regardless of how you use the data, having CRM capabilities will enable you to understand your customers better and then tailor your strategies to their ever-changing needs and wants.
Ultimately, with the rise in applicable technology and the increase in takeout/delivery frequency, your consumers will continue to re-evaluate when they eat and how they acquire their meals. Your restaurant’s strategy will need to evolve with these new behaviors, as we’ve experienced when designing operational strategies for our numerous foodservice clients such as Boston Pizza and Dairy Queen. By leveraging one or more of the above recommendations, you will be able to remain competitive in what is an ever-changing landscape.