The delivery business is booming. GrubHub, UberEats, DoorDash and countless others that venture beyond compound words have taken a dining segment ruled by pizza and expanded it to every cuisine under the sun. On the surface, delivery is an excellent opportunity that allows restaurants to sell to guests who may not have visited them in person. Add in the fact that drivers are on-demand contractors and require no additional head count and you’ve got a pretty good deal. Delivery still isn’t for everyone, however. A number of factors exist that restaurant owners should consider before going into the delivery business. Brand Alignment While delivery has undoubtedly gotten trendier, it still carries a stigma that can drag down the overall image of a restaurant. While delivery aligns perfectly with most any casual restaurant, the area gets grayer as the average check rises. Steakhouse patrons may question the quality of the food at their table if they see that the restaurant also delivers. While this example is a bit extreme, it’s up to you to assess where your restaurant sits on the premium spectrum and whether delivery is a fit. On the other end, if you have a high-volume restaurant known for a line out the door, and that line is actually part of ‘the experience,’ delivery may hurt that element, not to mention burden your staff with additional orders and slow the line to a dangerous extent. Food Quality Food quality is always at risk in a delivery setting. The longer the delivery, the longer the food sits. Temperatures cool, sheen fades and your food can go from beautiful to unappetizing before the guest can even get a chance to look at it. In most cases, presentation can never match what you’d prepare onsite, especially when you’re at the mercy of speed bumps, sharp turns and other elements that will shake around whatever’s in the back seat. If you’re comfortable with leaving your food on the counter for a while before a server can pick it up, delivery could be a viable option. If you tolerate nothing less than dishes going out the moment they’re ready, you may not want your food sitting in the back of a car for however long it takes to get to your guests. Commission Food delivery services can be very expensive, with commissions as high as 30–40% in some cases. This, no doubt, eats significantly into your bottom line. It’s critical to assess whether food delivery will actually be profitable to the point where it’s worth your time. Determine the minimum amount needed to justify your costs, factoring in any holdups that take place for your dine-in patrons since your kitchen staff will be taking on more orders. If these thresholds are met, then any delivery orders that take place will deliver positive returns. Cannibalization If you decide to go the delivery route, keep tabs on your revenues and average checks of dine-in vs. delivery business. If you see dine-in revenue slip dramatically, it could be that your dine-in guests simply switched over to delivery. Taking commission into account, this move is not beneficial for your business. To remedy this situation, experiment with different minimum check requirements for delivery as well as dine-in promotions and events in order to distinguish your restaurant experience while retaining delivery as an additional revenue stream rather than a substitute revenue stream. Time Commitment Most delivery services have streamlined processes that allow owners and staff to manage deliveries swiftly and efficiently. Even so, take note of the time it actually takes you to manage your deliveries and whether that’s affecting you or your staff’s ability to manage in-store operations. Pressure on cooking staff is an ever-present factor, as is management needing to handle incoming delivery requests alongside pressing guest issues and handling the inevitable broken dish on the dining room floor. This assessment will likely be less analytical, but take time to consider whether your delivery business is truly manageable or more burdensome than it seems. If you decide to go into delivery, monitor these factors on a regular basis. By taking a holistic look at how delivery is affecting you financially and operationally, you will be able to make beneficial, proactive decisions as needed to manage this revenue stream.
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Instagram has transformed photos as a means of communication, with food ranking high among Instagram’s content leaderboard. Many restaurants have upped their food presentation to make their product more ‘sharable’ on social media, but some places have gone a step further. Popping up more and more are socially-built restaurants—mostly dessert-focused eateries that were literally built for Instagram. How exactly can a restaurant be built for Instagram? Simple: 1. Create visually stunning food and backdrops that encourage guests to share photos of your food with their friends. 2. Reap the rewards of free marketing when those friends come in through your doors, buy your product, photograph it and share it with their friends. 3. Repeat steps 1 and 2 as the cycle continues. Your food, while serving as the financial crux of your business, takes a back seat to the social sharing experience. Thinking about it from a business perspective, the move makes a great degree of sense. Here’s why: Dessert is a natural haven for photogenic, brightly-colored food Sprinkles, M&M’s and cotton candy are among the most visually interesting edible items on camera. Preparing a burger with fresh meat, cheese and produce to produce the savory equivalent of such vibrant colors is a complex, costly undertaking by comparison. Dessert contains numerous color contrasts—chocolate and vanilla, vanilla raspberry, vanilla and caramel, etc.—as well as a multitude of unnaturally-colored products that are accepted by society as being perfectly good things to eat. Try selling a burger with bright green meat and pink buns! Dessert is low-cost and high-margin Desserts entail significantly lower ingredient and production costs than most of their savory counterparts, affording them lower price points to appeal to the masses and the target demographics that naturally share their food on social media. "Making eye-catching dessert is the first step. Just as critical is informing audience members where they can go to get the same experience." Dessert establishments are prone to higher traffic and turnover in smaller spaces
A dessert-only restaurant will feature far fewer traditional booths and tables, and skew more toward long, narrow countertops and shared tables designed for groups to congregate, eat and leave. Dessert doesn’t take as long as a normal meal [unless you have a serious sweet tooth!], again lowering the barrier to entry by posing a minimal time commitment on top of the lower price. With higher turnover and lots of to-go business, as well as fewer kitchen and inventory requirements, dessert establishments can afford to be significantly smaller than standard restaurants while still attracting significant traffic. This opens the gates to a larger group of budding restaurateurs that wouldn’t be as prone to investing in a large amount of real estate. There are many more built-in features that make dessert a natural candidate for socially-built restaurants, but these don’t guarantee success. So, what are successful establishments doing to stand out? Making big, killer products Look at any of the socially-built dessert hotspots and you will likely see enormous scoops of ice cream with generously-poured toppings [at least they look generous] and other accouterments sticking out the top and flowing from the sides of the cone, cookies or other vehicle. And yes, it tastes as good as it looks. Bigger is better for these places. CREAM, short for Cookies Rule Everything Around Me, is a prime example of socially-built massive desserts that appeal to the eye and the palate alike. No expense is spared, because their food costs double as the marketing budget. Designing a restaurant full of Instagram backgrounds Making eye-catching dessert is the first step. Just as critical is informing audience members where they can go to get the same experience. The Dolly Llama in Downtown Los Angeles has this practice down pat. Every part of this small restaurant is an Instagram backdrop, complete with bright neon lighting and their hashtag splayed across the wall. Creating a social atmosphere Snapping food photos is always a toss-up. Some love to do it, some hate when it’s done, and some love to do it even when around those who hate when it’s done. In any case, successful socially-built establishments will push an energetic atmosphere that drives social interaction and consequent phone use. Music, board and lawn games and other forms of entertainment will push guests to engage in the ‘free’ marketing practices sought by these places. Food costs increase. Rent increases. Labor increases. It’s safe to assume that, over time, your cost of doing business will inevitably go up. When this happens, you have two choices: increase sales, or cut costs elsewhere to offset the rising area. Neither option will bode well with your customer base, but both fare better than the third choice, which is continue as usual until your operation crashes and burns. Whichever route you decide to take, however, it is imperative to communicate the change with your loyalists. Being proactive in times of potential customer setbacks will not only save otherwise lost relationships, but also have potential to actually strengthen your bond with your strongest advocates. Here are some example scenarios where restaurants can stand out during tough times: Communicating Price Increases Restaurant X is a well-known sandwich shop that has attracted a cult-like local following for the past three decades. Sadly, their landlord doesn’t share the same sentimental attachment and demands a significant rent increase. Restaurant X does the math and realizes that based on current sales, it can’t afford these new costs. They have to raise sandwich prices by $1 each, roughly a 15% bump. Restaurant X decides to be up-front with its customers, many of whom have come through its doors for years on end. They post a sign on their menu above the counter that reads something like this: “You’ve probably noticed that our sandwich prices have gone up. We wish we didn’t have to do this either, but our rent went up, and this is the only way for us to stay in business and continue our dream of serving you every day. Thank you and let us know if we can answer any questions.” Simple and to the point, without causing any unnecessary drama with the landlord. Will this approach prevent alienation from every customer? Likely not, but it’ll certainly minimize the bleeding. By hearing the news straight from the horse’s mouth, Restaurant X has halted any false accusations from spreading around its price increases. "Much better to tell your loyalists the story in the way you want it to be told rather than have them make up a defamatory story in their minds." Alternatively, and to supplement the first approach, if Restaurant X doesn’t want to alert every customer [i.e. first-timers] that they used to have lower prices, then it’s best to reach their loyalists through other channels. Email lists and social media pages are prime for these types of announcements.
Communicating Menu Changes Personal opinion, but always opt for price increases before cost cutting, barring true inefficiencies or redundancies in your operations. Your brand is built around an enjoyable, reliable product and experience, and detracting from taste, portion size or ambiance are all one-way tickets to destroying your brand. This said, sometimes a menu change is necessary for reasons out of your control. Restaurant Z sells a very popular almond-crusted salmon. Drought conditions, however, have made almonds a very unpopular ingredient, especially with the owners of Restaurant Z, who are strong environmental advocates. They decide to change the dish to herb-crusted salmon, knowing that this will create some noticeable backlash. In their daily pre-service staff meeting, the owners discuss the change with managers and servers, and train the servers on an opening dialogue and anticipated FAQ’s that loyalists will likely have regarding the change. The servers are now fully equipped with the ability to be forthcoming about a change in a popular menu item and how it aligns with the environment and what the restaurant stands for in the end. Just like with the previous example, this approach won’t please everyone, but will surely help your customers get on the same page and empathize with the decision. Much better to tell your loyalists the story in the way you want it to be told rather than have them make up a defamatory story in their minds. These approaches are largely interchangeable, but fall under the same central themes:
Communicating less-than-ideal matters isn’t the most comfortable thing, but in the same way that the success of a romantic relationship depends on communication, so does that of your business |
AuthorBenjamin Brown is a seasoned restaurant writer and hospitality consultant, serving up SoCal's hottest food news and reviews. Categories
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