There is no longer any argument that the on-demand economy has taken over. Consumers are just a mobile app away from getting a ride, arranging travel accommodations, and having a quick conversation with the doctor or lawyer. The on-demand economy has even made its way into the restaurant business by way of door-to-door meal delivery service.
As restaurant foot traffic falls and drive-through business barely holds steady, restaurants are on the lookout for the next big thing that will power the industry for the next few decades. On-demand delivery could be what they have been looking for.
In light of the growing on-demand economy, here are five things restaurants should be thinking about in relation to food delivery:
1. Its History
Delivering food is not a new concept. Just ask the intrepid pizza man. Pizzerias across the United States have been delivering hot, fresh pizzas to customers for more than four decades. They were the only ones delivering food way back when.
By the time the early 80s rolled around, Chinese restaurants were getting in on the delivery act. They saw the money to be made by taking food to customers instead of waiting for customers to come to them. Delivery made it possible to serve more customers without the need for more dining room space.
2. Customer Preferences
One of the things causing restaurants to give serious consideration to delivery is less foot traffic. Some of the decline can be attributed to customer preferences. Believe it or not, customers just aren’t enjoying the experience of dining out anymore. But rather than learning to cook, they are shifting to take out.
3. Who Handles Delivery
Next up is the question of who actually handles delivery. The old model established by pizza joints and Chinese restaurants is a direct model in which the restaurant pays its own delivery personnel. The new model is one in which restaurants contract with on-demand delivery companies who, in turn, send their people to pick up food and take it to customer homes.
The direct model tends to be more profitable in that restaurants can pay delivery drivers through a combination of wages and tips. When they contract with a delivery service, they are assessed a delivery fee that they must pay themselves or pass on to the customer.
4. Maintaining Dining Space
It is completely possible to operate a pizzeria without any dining space at all. Everything is either takeout or delivery. But you might not get away with that in other kinds of restaurants. So perhaps restaurant owners have to think about still maintaining some dining space.
One way to do that is to adopt the neighborhood restaurant philosophy exemplified by Salt Lake City’s Taqueria27. The neighborhood concept allows a restaurant to offer dining space to local customers looking to hang out, while still going beyond the neighborhood with delivery.
5. Delivery Menus
Delivery menus are one last consideration. Restaurant owners have to think about this with the understanding that not every dish works well with takeout and delivery. A gourmet dish at a four-star restaurant just isn’t the same when it’s packed in styrofoam and delivered by a college student trying to make some extra money.
This suggests that not every item on the restaurant’s menu is suitable for delivery. It also suggests that some restaurants might do better by adding new menu items tailored uniquely to their delivery service.
The on-demand economy has led to on-demand food delivery. This could be the next big thing for the restaurant industry, just as the drive-through was 40 years ago.