Does this sound familiar? Third-party delivery services can be like a drug that addicts restaurant owners: You sign up at a significant expense to get quick hits in the form of incremental sales, then pay even more to sustain business as more companies join the platform. That’s the view of Noah Glass, the CEO and founder of Olo, a mobile and online ordering platform. Glass advises restaurant operators to control their own online ordering site and he built his company to help them do that. While it can be more work to get customers to visit your site or download your app, he says, you will reap the benefit of more money earned on each sale. Others agree. Keeping your ordering in-house could increase your profitability by 35 percent, according to Software Advice, which advises operators to use a simple equation to determine how much they could be spending on third-party platforms. (Take the value of your monthly revenue and multiply that by 25 percent, which is the average percentage of commission fees charged by the platforms, and your answer will be the amount of money you will lose each month.) Instead, you could keep your ordering in-house for a lower monthly fee and supplement your system with Google’s My Business to benefit from the marketing exposure in your area. Then, when you capture the contact information and order history of customers, you can send targeted push promotions to them to entice them to return. Finally, keeping your ordering platform in-house keeps you in the driver’s seat when making menu changes or updates, or when managing issues with orders. Even if your third-party vendor seeks to provide a good customer experience, the may not be able to update your information as quickly as you would and they don’t necessarily value your business over the growing numbers of other restaurants on their platform.
Speak your guests’ language
Do you have an item on your menu that should be popular with guests but somehow doesn’t get many takers? Before you exchange it for something new, consider adjusting how you describe it on your menu. Even if you use colorful language to paint a mental picture of a dish, it may not strike an emotional chord with a guest. Cake suggests guiding guests to make a decision using nostalgic language rather than logic. It worked well for Dolester Miles, who earlier this year was named the best pastry chef in the nation by the James Beard Foundation. The Washington Post reports that she created a layer cake containing zabaglione — a foamy custard sauce flavored with marsala wine — but no one ordered it when the menu description mentioned the ingredient. When she changed the name of the dessert to Frank’s Favorite Cake, however, “it started flying off the shelf.”
Is your off-premise strategy on the mark?
Off-premise dining is on the rise — 86 percent of consumers are using off-premise services at least monthly, while one-third of consumers are using them more frequently than they did a year ago, according to Technomic. As the demand for off-premise dining climbs, it will have impacts across your business well beyond your choice of a delivery provider. For example, it is likely to affect the mix of items you offer on your menu, the customers you target, how you design your restaurant, how you package your food and how you develop your loyalty program. Restaurant Business suggests offering meal bundles with entrees, sides and desserts for busy families looking for easy and affordable options — create some pre-set or customizeable options so the customer can avoid ordering items a la carte. Since younger consumers are big supporters of off-premise dining (Technomic’s Takeout & Off-Premise report found that nearly half of 18- to 34-year-olds are ordering food to go more often than they did three years ago), consider offering some lighter, nutritious, unprocessed options that appeal to health-conscious people on the go. Your restaurant design should streamline the process of picking up food for customers and delivery drivers, and evolve with the idea that an increasing share of your business will be from off-premise sales. Choose packaging that ensures each item gets to the consumer in good condition — fries, for example, should not be in packaging that traps steam. Offer discounts or free items when customers bring in friends, visit on their birthday, or spend a certain amount of money with you. This is all to say that while your off-premise strategy impacts more than just these areas, it’s important to trace it through each step of your business. You may understand what your customers like, but your front of house and back of house (and the technology supporting them) need to be ready to deliver it.
Beef up your burger menu
Who doesn’t love a burger? There are appealing options for carnivores and vegetarians alike, and while you can’t go wrong with a classic version on your menu, there is ample room for innovation too. If you want to bring some creativity to your burger selection, try some on-trend tweaks. Restaurant Business suggests swapping out the traditional cheddar for options like Gruyere, mozzarella, Muenster or goat cheese, which have all risen in popularity on menus according to Technomic. Liven up your condiments with ethnic sauces like Sriracha, sweet chili or poblano (and take it further by creating burgers themed to a particular global cuisine). Finally, substitute a premium roll like a pretzel bun or brioche for the standard roll — it will help your burger stand out on the menu and also justify a higher price point.
Build a loyal following
Are you putting your loyalty program to work? Research from Accenture found that 66 percent of consumers in the United States spend more money on brands to which they are loyal. Offering the right mix of benefits can generate a significant boost to sales — one extreme example is Starbucks, which has 11 million members and, as of early 2016, $1.2 billion in customer funds loaded onto its plastic and mobile Starbucks cards, Upserve reports. The brands reaping the biggest benefits from their loyalty programs are using a combination of discounts, targeted marketing and experiential rewards to motivate their guests. Upserve recently assessed some of the most forward-thinking brands in this area. The Palm’s rewards program, for example, carries a $25 fee but that is returned to guests in the form of a $25 gift card after sign-up. Members get changing rewards each month, including exclusive wines and cocktails, as well as substantial discounts on wine. Panera, a longtime innovator in this space, is another to watch, with 28 million members who can easily reorder favorite purchases via the program, receive personalized offers based on those orders, and get recipes and cooking suggestions from the brand. Panera also makes the experience of collecting food more convenient for its members — they can order online, then visit a store and pick up their food from a designated Rapid Pick-Up shelf in the store, avoiding a long wait in line. To maximize your program’s power, Accenture advises you regularly identify and eliminate aspects of it that aren’t working, encourage your members to be your advocates and try to attract new customers through existing ones. Also note that millennials can be tough to attract to these programs — mine your data to understand what range of offerings brings them back.
Prepare for the packaging revolution
The year 1894 brought the “paper pail” now ubiquitous in Chinese food takeout. The early 1960s brought us the cardboard pizza box. Now, in the face of consumer demand for eco-friendly packaging and growing demand for off-premise dining in general, we could be on the cusp of another big change in takeout food packaging. Technomic reports that in 2016, 60 percent of consumers said they would pay more for takeout meals if they were packaged in an environmentally friendly way. That number decreased to 52 percent in 2017, not because the demand for such packaging had fallen but because consumers now expect restaurants to offer it. If you currently provide single-use plastic for your takeout business, it’s time to offer alternatives and work with partners who support them — some third-party delivery partners now notify customers that they will not receive non-recyclable items like straws or packets of ketchup unless they request them. Shake Shack, for one, is now looking to bypass materials that are simply recyclable in favor of options that are biodegradable on their own.
Find the perfect package
As off-premise dining has become increasingly common, food packaging has been experiencing a bit of a renaissance. Take IHOP’s new multi-tiered take-away packaging, designed to keep combo menu items hot, with minimal moisture, in a compact carrying case. Whether you choose glass, metal, plastics, paper, cardboard, environmentally sustainable materials now in production or some combination of the above, Food Safety Tech advises operators to keep some parameters in mind. Above all, the packaging you select for your takeout menu should help you preserve food and provide a barrier to deterioration due to bacteria, contamination by insects or other pests, and physical jolts during transport. Balance the packaging’s impact on the environment with any benefits it provides in minimizing food waste. After all, inadequate storage, preservation and transport of food are key causes of food waste, so consider how your packaging might help minimize it. Is it durable enough to be reused? Can it be recycled or composted? Next, consider what marketing images and information can be added to your packaging. This, along with the indirect message you send through your choice of packaging materials, can help the consumer connect with your brand and values. Finally, in an environment where new players are entering the delivery market, consider adding an element of traceability to your packaging.
Know thy supplier
Amid extreme weather and other changing market conditions, it can be tempting to favor suppliers that offer ingredients for low prices. But hiring a cheap, potentially unregulated supplier can result in a foodborne illness outbreak due to food that hasn’t been properly harvested, processed, stored and delivered. When vetting potential suppliers, Statefoodsafety.com advises asking for records of regulatory permits, licenses and inspection reports, as well as HACCP or HARPC certifications. Conduct an in-person audit of the supplier to understand its manufacturing practices and ask questions. Finally, consider the promises you make to guests about the food you serve: Do you say you offer sustainably sourced seafood, for example? Make sure that you’re aware of any legal requirements tied to food you serve, and that the supplier meets those requirements.
Make sure the best things come in your packages
As more restaurants offer delivery – McDonald’s being among the latest – packaging innovation is critical. (After all, it’s still not clear if hot, crisp French fries can be prevented from getting cold and soggy in the time they’re delivered to customers). Packaging companies have the challenge of making products recyclable, sustainable, portable and capable of keeping food within a certain temperature range – all without costing more than the food they protect. The Food Packaging Institute recommends these dos and don’ts when selecting packaging: Consider packaging early in your menu development so you can focus on the right size, functions, and food and beverage compatibility. Test samples in their actual use and ensure they have multiple applications. Don’t assume custom packaging is the best option – or that all foods can use the same packaging. Avoid buying the cheapest option and don’t neglect to update packaging when you change your menu or brand.
How pop-ups break the echo chamber
For all of social media’s benefits, it also encloses consumers in their own echo chambers. We can all align with the people, organizations and brands that closely reflect – and don’t challenge – our own ideas. Now Mintel’s 2017 North American Consumer Trend Report, “The Echo Chamber of Secrets,” is helping brands break through those barriers. One key recommendation for restaurants: Experiment with temporary, unique physical spaces that break through the clutter and help your brand stand apart for the consumer. (Consider the Big Mac ATM that appeared for one day in Boston and attracted throngs, for example. Or Match.com’s Espresso Yourself campaign in London, where a pop-up café 3D printed photos of eligible members onto the foam of free coffees.) Mintel suggests pop-ups can give consumers a memorable experience that challenges their brand perceptions and engages them in unexpected, technology-based ways.
Out with sympathy, in with empathy
How empathetic is your brand? You might have the best ingredients from local producers but if your guests don’t feel you’re being authentic about the need for those values, you lose. To make sure your perception of your brand jibes with your guests’ perception of you, PadillaCRT recommends you understand the difference between sympathy and empathy – and show more of the latter than the former. For example, take a walk in your guests’ shoes. Where do they shop? What do they do at home? What are their values and interests? (Your research doesn’t even have to be highly scientific – you can identify friends who reflect the qualities of your target customer and ask lots of questions.) Next, dig for their pain points. What’s the toughest part of their day/week/month and what gives them an escape from that? If you know your guests well, you’ll know better how to be a bright point in their day.
Create a worry-free zone on your menu
How often do you have to accommodate a guest’s allergy or dietary needs? Dining out can cause anxiety for both guest and operator when someone consumes the wrong ingredient and gets a severe reaction. Baylor University aimed to accommodate this by developing a new (and much loved) section of a campus dining hall. Dubbed the “worry-free station,” the section offers food that is 100 percent gluten free – along with utensils and equipment guests can use with those foods only. The top eight allergens are also clearly labeled on all food served at the station. Beyond fruit and vegetables, the station offers gluten-free desserts, bread, waffles and more. The station has received a positive response from not only those with gluten intolerance but vegans, vegetarians, those with non-gluten allergy restrictions, and even guests without dietary restrictions.
Operators use surcharges to work around labor expenses
Instead of just raising menu prices to cover the rising cost of labor, restaurants in a number of states including Arizona, California, Colorado and New York are simply adding labor surcharges of three or four percent to their guests’ bills, the Wall Street Journal reports. The practice is likely to continue as more cities and states raise their minimum wage in the months ahead. In the report, NPD Group’s Bonnie Riggs says this change has been more palatable for operators who want to offset increasing expenses without irking guests. By tacking the surcharge on to a bill at the end of a meal, operators may avoid having guests trade down from an entrée to a sandwich because they have strong opinions about how much a plate of pasta should cost, for example. Such guests can be less sensitive to their total costs when they pay their bill at the end of a meal.
Just a little of that human touch
As technology gains a growing role in restaurants looking to cut labor costs and make food ordering more accurate and efficient, some operators realize they now lack the human touch. The New York Times reports that some restaurants have found a solution in a new kind of employee whose primary role is to schmooze with guests. Often found in fast-casual restaurants where guests must line up to order and wait for food, the report says these employees have the old-school task of walking the room to offer help, entertainment or a welcome distraction from the wait in the form of contests with food giveaways. While some patrons aren’t missing the human interaction that automation has been phasing out, the effort is helping to placate other guests and forge the kind of connection with them that motivates their return.
Preventing food waste can save big money
For every $1 organizations invested in reducing food loss and waste, they saved $14 in operating costs. That’s according to Modern Restaurant Management’s recent study, “The Business Case for Reducing Food Loss and Waste,” which evaluated data from 1,200 sites across 700 companies in 17 countries. Sites included food manufacturers, food retailers, hospitality companies and foodservice operations. As part of the study, the organizations surveyed made investments including quantifying and monitoring food loss and waste, training staff on waste-reduction practices, adjusting food handling and storage processes, changing packaging to increase shelf life, and changing date labels, among other adjustments.
Food-delivery robots have arrived
San Francisco Business Times reports that the robot maker Starship Technologies has partnered with DoorDash to launch robotic food delivery in Redwood City, Calif. and with and Postmates to offer the delivery service in Washington, D.C. The robots will complement the companies’ existing workforces in an effort to make food delivery even faster and more convenient. The robots are covered in cameras and maneuver down sidewalks at a rate of four miles per hour to deliver food to customers, who tap a button on an app to release their food order. The company says the robots are designed for short distances and better suited to carrying small meals than several pizzas. Still, they could serve an important purpose, enabling delivery drivers to focus less on local orders and more on distant, more complicated deliveries.
Faster ordering through facial recognition
The kiosk appears to be here to stay – Wendy’s is the latest brand to adopt the machines in an effort to streamline ordering – and some operators are taking things a step further. Kiosk Marketplace reports that facial recognition software is now helping restaurants remember their guests. UFood Grill in Maryland, for example, was getting feedback from guests who wanted ordering to be easier. So now, in addition to allowing guests to order at a traditional cashier counter, guests can order at one of two kiosks (and at their drive-thrus soon too). Then they either add their phone number or have their picture taken to make future orders go more quickly. The next time they visit, they can order their favorite meal with just a glance into the camera. From order to payment, the process takes 10 seconds.
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