In recent published data by the NPD group, and as it was reported by Modern Restaurant Management magazine, it was revealed that online orders and delivery saw a soaring increase of 142 per cent and 98 per cent, respectively, by the end of 2020.
Since the restrictions that were put in place to tackle the spread of the Coronavirus have made onsite dining unavailable, restaurants were forced to close their doors. Delivery services have become one of the main solutions to keep them open and keep servicing customers. What once was considered as the future of food services, the demand for online ordering and food delivery have skyrocketed and have now become part of consumers’ lives.
In another research study that was conducted by the AAL at Dalhousie University, it was estimated that a little over 4 million more Canadians have been ordering food online during the second half of last year, as it was reported in a CTV News article. The research study surveyed over 7,000 Canadians and revealed that 29% of the respondents ordered directly from a restaurant when 26% used a delivery app.
It has become apparent that online ordering is reshaping the market. This calls for restaurants to adapt their offering and extend the dining experience beyond the premises of their locations to cater to the on-demand lifestyle of customers.
Today, restaurant orders are made up of more online delivery orders. So how can you effectively set up delivery services at your restaurant and expand your business?
What options do you have?
Before jumping into the how-to, and in order to help you choose the best fit for your restaurant, let us first assess the different delivery formulas that exist in the market:
In-house: it refers to carrying out delivery orders with your own fleet vehicles. It may necessitate startup costs and additional resources to set it up at first, but it will enable you to retain power over your earnings and valuable customer data that would help you enhance and personalize your customer service. It will help increase the return on your investment and the customer retention rate.
This is the formula of choice of ghost kitchens. The concept consists of fully functional restaurant kitchens that only operate via online orders and delivery. This concept has seduced many restaurateurs as it permits them to cut on operational costs. You can read more about Ghost Kitchens here.
Third-party delivery: it means outsourcing the delivery process to existing companies. This option may give you access to drivers and vehicles and allow you to tap into an established customer pool, but it comes at high costs as these companies usually charge high cuts on already thin margins.
Combined: as many restaurants, you can opt for implementing both methods cited above to balance out your revenue streams. On one hand, you take advantage of the extra advertising and exposure that comes with using third-party delivery services, and on the other hand, you offer your own delivery in order to retain the extra sales revenues in full.
Why set up in-house delivery?
This is probably the most important and at the same time the most daunting decision for you. Thinking of launching a delivery service is an idea that gets many people discouraged. Today’s customers are looking for convenience and although it might seem troublesome, there are definitely perks that come with setting up in-house delivery at your restaurant that could motivate your decision.
First, it will give you full control over the customer experience. Just because the dining experience is happening outside of the restaurant, it does not mean that the customers are not expecting a premium quality of service. This represents an opportunity for you to deliver value at every stage of the order processing and meet the expectations of your customers. Additionally, you can use your customer data to personalize your services which will greatly increase customer satisfaction and loyalty over time.
Second, in-house delivery will enable you to manage your menu, prices and promotional offers and keep them aligned with your business objectives. And as you retain all the sales revenues, it will allow you to properly evaluate your profit and develop the right strategies to grow and expand your business.
A simple guide to getting started
In order to help you successfully transition to in-house delivery, we have compiled a list of tips to help you during this move.
- Gear up with the right POS
Get the right technology for your restaurant. Your POS system should be able to handle both phone and online orders. It is the tool that is at the heart of all your operations. It should allow you to receive and manage orders from one place, automatically send them over to the kitchen, store your customers’ information into your database and process payments. Equip your business with the phone and online ordering tools that easily integrate with your POS system to have control over and oversee all of your operations.
- Prep your kitchen
The kitchen is where the magic happens and during this transition, it should be approached with careful consideration as not to overwhelm your staff once you launch your in-house delivery operations, especially during times that drive high volume orders.
With the Kitchen Display System feature that integrates with your POS system, you can receive online orders directly into the kitchen, dispatch each operation to the right prepping station and monitor the status of each order. It was specifically designed to increase the efficiency of your kitchen management.
- Prep your restaurant
Between receiving online and phone orders, getting orders for takeout and pickup ready and handling onsite orders, it can very quickly turn into chaos and hence negatively impact your restaurant’s performance. This can be addressed by having a designated area for handling each service. The idea would be to reorganize your counter space for takeout, deliveries and to assign a different zone for pick-up orders. It will help you avoid having an overcrowded space and making mistakes when handing orders over to delivery staff and customers.
- Choose your delivery transportation method
Using your own transportation will allow you to ensure that all orders are delivered in a timely manner. But will it be by car, motorcycle or bicycle? Your restaurant’s specific needs and the radius in which you will choose to operate will determine the means of transportation that will be needed to fulfill your delivery services.
Regardless of which transportation means you will choose, you will need to hire drivers, who should provide a clean record. They should be trained properly, not only to ensure that they correctly and safely drop off each order but also to make sure that every delivery is conducted in accordance with the desired quality level of customer service of your restaurant.
- Design your delivery menu
As opposed to onsite dining, customers today have access to menus of various restaurants and delivery apps to choose from and that can easily influence their choices. You should engineer the menu in a way that makes decision-making easy and quick once they land on your mobile app or website. It should offer a variety of options and bundles to choose from. The items list should be categorized, concise and should contain accurate descriptions so that customers are informed about the ingredients of every dish; especially in case of allergies and intolerances. You should also consider including images to create a visual appeal. This will give you the opportunity to effectively plan your operations and packaging and optimize your delivery service.
- Train your staff
As the rest of your restaurant is undergoing changes to help ease the transition, you should reorganize your team members so that each member is responsible for a specific task. Processes should be put in place for packaging and handing over delivery orders to minimize mistakes and maintain operational speed. This is surely important as your team will be expected to perform under tight time constraints.
- Select your delivery packaging
Your equipment and packaging should serve two main purposes: maintaining quality and strengthening your brand image.
You will need to invest in insulated bags and coolers to secure a safe drop-off and temperature control. The food containers should be tamper-proof to ensure the absence of any contamination.
Your packaging also acts as an extension of your brand. You can invest in branded packaging, and you should use containers that would hold servings that respect the portion sizes your customers are accustomed to. Also, make sure to include a thank you note and offer vouchers to be used on your app or site for future orders.
- Use special offers for your delivery
Adapt your offers and make them inclusive to include single customers, couples, families and large groups. As you are optimizing your menu for delivery, make sure to include bundles and exclusive offers for your app and website users.
- Promote your delivery service online
This is not a secret anymore, utilizing social media, your website and food ordering app to strengthen your brand image and market yourself properly online can increase your reach and grow your market share.
- Tipping policy
Consider including tipping in your ordering options or at the billing stage. Since most customers pay ahead when placing online orders, and given the increasing demand for contactless deliveries, this may cost your staff and drivers extra income.
As the market is continuously changing and consumers’ habits are constantly evolving, the meal delivery segment is gaining in popularity more than ever. Launching your own delivery service could represent a great opportunity for growth and expansion for your business. But as with any business decision, it requires thoughtful examination, developing a solid strategy and investing in the right resources and technology. If implemented correctly, this activity could result in profitability, longevity and delighted customers.