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[Rick Braa] Delivery and pickup service
Acclaimed restaurant consultant Rick Braa took the time to host a comprehensive webinar on financial strategies and tips to make use of during the coronavirus crisis. In part six, he went into detail about the rising importance of delivery and pickup service for restaurants.
“The landscape has changed,” Braa said. It’s true — the percentage of food away from home has grown significantly. The safety of restaurants as dining locations has become a major worry during the pandemic. It’s going to hit hard — Braa estimates somewhere around a 20% reduction in competition.
“What that does is that frees up sales for everybody who [stays] in business,” Braa said. “While we’re sad to see restaurants go, they’re going to, and sales will go someplace, because that [percentage] will be made up.”
The bigger challenges don’t stop there. The pandemic has disrupted a lot of routines, perhaps most particularly the habit of going into an office to do work. Currently there is increasing anxiety regarding whether people will be resuming the traditional office routine, and more than 50% of the workforce is working from home. This naturally impacts restaurant traffic in downtown areas.
Braa said there’s no indication when, or even if, people will be returning to the office like they used to.
Braa noted that digital penetration and saturation are key — basically, though times are economically hard all around, this is the opportunity for you to get your name out there in an even bigger way.
Braa recalled the example of the cereal companies Kellogg’s and Post, noting that both encountered the challenge of the Great Depression, but Kellogg came out of those times of economic hardship as the dominant brand because they didn’t play it safe. They increased marketing staff, they decided to push their brand everywhere and in so doing took over the dominant market share.
“My advice to you is to step on it,” Braa said. “Get out there, be everywhere. Be on twitter, be on all the social. Have an active email platform, have a great website platform that can link through to delivery service, to your own channel.”
Braa encourages operators to look into do-it-yourself delivery options or alternatives to third-party. In bigger markets, these alternatives may be even more feasible and can offer better price value as well.
Additionally, start looking into adopting new habits for your digital storefront. With more people looking to place orders for pick-up or delivery, make sure you’re building incremental value by having additional items to suggest at checkout. Make sure you have items that stick out that you can couple together. Braa used desserts as an example, noting they are an “often ignored” piece.
Focus on the entire check and track whatever information you were tracking before the pandemic. Braa said this incremental check-out is a “tremendous” opportunity to get more for roughly the same amount of labor.
As you pivot into delivery, you must ensure quality does not slip whatsoever. In particular, Braa said you must make sure your packages are accurate. It doesn’t matter if you have fast or delicious food if you put the wrong item in the bag.
“This happens more often than not,” Braa warned.
Ghost kitchens are also a potential business model that is even more viable than ever before with the new dining habits. Braa predicts that development of these kitchens will accelerate and while we haven’t seen widespread penetration yet, they are starting to pop up, especially in cities. A ghost kitchen could offer some key advantages — the ability develop a second brand under your roof or to have specialized products. There is a lot to consider now and this is the opportunity to start implementing new ideas.