Delivery is a must for today's restaurant. Fewer people than ever opt to sit down and eat at restaurants, and according to Tillster's 2019 Delivery Index, more than half of QSR and fast casual customers would order more often from a restaurant if delivery was offered. In short, delivery is a sales driver. However, given the myriad of choices, including third-party partners, like GrubHub and Postmates, "last mile" delivery options, and pure restaurant-run delivery programs, navigating the delivery market can be confusing for consumers and restaurants alike.
The question many restaurants are asking today is: With so many delivery options and so much competition, how do we create a delivery strategy destined for success to differentiate us from our competitors?
The answer is a combination of better understanding consumer behaviors and better utilizing data. Below are four areas that operators must conquer in order to have a successful delivery offering.
1. Understand why your customers order via delivery
Convenience is the driving factor for a majority of delivery customers. When a delivery program is simple, seamless and reliable, it creates a ton of loyalty from busy parents to professionals working long hours and people on the go.
And while the ease of delivery may mark the start of loyalty, it's the restaurant brand's consistency that keeps it. Seamless, intuitive consistency in delivery is an effort that feels effortless.
2. Understand when your customers order
No surprise: dinner drives the most delivery orders. In fact, 77% of QSR & Fast Casual customers order delivery at dinnertime. With better use of data, restaurants can understand their customers behaviors, and respond accordingly.
Whether a guest orders once each week or once each quarter, targeted, personalized marketing efforts can move customers to a more frequent buying schedule with customer data utilization. Instead of trying to bring the customer who orders dinner once each week in with a coupon for a lunch offer (a strategy a restaurant might blindly employ), it makes far more sense to nudge that same once-a-week dinner guest to visit for a second weekly dinner. The data shows the guest already orders delivery for dinner. By knowing when they like to order out, the restaurant can target their efforts prior to or during this period, vying for an extra dinner visit and doubling the customer's weekly spend.
3. Know how much your customers are willing to pay
How much will customers pay for delivery? That's the million-dollar question for restaurants. Historically, operators are unsure what they should charge in delivery fees, or whether to upcharge menu items. Once again, restaurant data provides the answer.
About 70% of customers prefer a designated delivery fee versus the 10%, who favor higher prices on menu items.Aggregated delivery data suggests that the ceiling for exactly how much customers are willing to pay for convenience is $5 in delivery fees. By setting minimum order amounts that make sense for the brand, and knowing what customers are willing to pay for delivery in convenience fees, restaurants can recoup their delivery expenses and run more effective programs.
4. Keep your customers updated with their orders progress
Today, consumers can track anything and everything. From Ubers to Instacart, Amazon to UPS, customers expect to see their order's progress. This expectation stands true for restaurant ordering. Roughly 60% of customers want order tracking for delivery. The key for restaurants: set expectations and provide basic delivery timing information as well as current order status, but don't share too much.
Tracking an Uber on a map in real-time makes sense; there's only one stop, and it's the customer. But, while customers will wait up to 40 minutes for their delivery order to arrive, a turn-by-turn level of insight isn't practical for restaurants to share as drivers may make multiple deliveries in one trip. Imagine the frustration watching your food crisscross and pause at various points throughout the neighborhood. The more appropriate approach is to keep customers updated with notifications once the order is received, prepared and on its way.
Despite delivery being sticky for some brands, one thing remains true: people appreciate the convenience and comfort of having their favorite dishes delivered to their doorstep. To pull it off seamlessly requires effort and planning, but with great reward. There's much to be gained from understanding what drives customer behavior, and what will drive incremental purchases. There's ample opportunity to tap into data and insights to build customer brand loyalty, and there are few better avenues to seek it out in today's marketplace than through a well-managed delivery program.