Delivery Done Right
Though pizza may still be the food of choice for customers wanting something delivered to their door, brands from all categories within the limited-service industry are trying their hand at delivery.
Even one of the biggest concepts in quick service, Burger King, has jumped on the delivery bandwagon by offering the BK Delivers service in select markets around the country, including New York City, Miami, Los Angeles, and other major cities.
But delivery isn’t something all brands should roll out to all locations, says David Decker, president at market research and consulting firm Consumer Edge Insight. Rather, it should first be implemented and perfected in select stores and markets, he says.
“Quick-service restaurants considering offering delivery need to look for locations with a high concentration of people living within a short delivery distance, along with restaurants meeting the demographic profile for delivery,” he says.
To that end, a recent survey by Consumer Edge Insight shows that delivery appeals to certain demographics more than others, including consumers in the 18–34 age range, those individuals who are single and living alone, and those who have lower incomes.
Additionally, the data showed that one in three Hispanics surveyed was interested in delivery.
Burger chain Fatburger determines which stores will offer delivery based on the customer base’s characteristics and the surrounding area.
“If the store is located in a dense or urban area or has a very large lunch crowd, we will offer direct delivery from the store,” says CEO Andy Wiederhorn. “In less-dense areas, we use a third-party delivery service, which covers many restaurants.”
Wiederhorn says the brand also considers each daypart separately to determine the feasibility and profitability of delivery in each market. At some Fatburger locations, delivery service is only offered for specific dayparts based on the customer demand in the area. “In New York City, there may be a late-night demand for delivery, while in other areas with a lot of office complexes, there may be a higher demand for lunch delivery,” he says. “If you have a location in a residential area in Atlanta, then lunch delivery wouldn’t be profitable, but a dinner delivery might be a different story.”
Ashley Morris, CEO of Capriotti’s Sandwich Shop, says the West Coast brand establishes rough corporate guidelines and then empowers each franchisee to make decisions regarding delivery based on his or her individual location and the market conditions in the area.
He says he encourages brands to pay attention to how many franchisees are in a given market and how delivery will affect their service area.
“Delivery really can increase the competition between franchisees, which can be healthy unless it negatively impacts all of the businesses,” Morris says. “If you have three franchisees in a location and two of them start delivering, but the other location does not, then the franchisees may be delivering to previous customers of the other location.”
Aside from avoiding competition between franchisees and locations, Morris says, setting a delivery radius is key to mastering the service, adding that the radius should allow for delivery within a 20–30 minute drive at most.
“You want to make sure that your drivers aren’t going too far, which will increase delivery times and the round-trip time your employee will be gone,” he says, noting that this is especially true in urban areas with high traffic.
“For example, in downtown Dallas, your delivery radius might be two miles, while five miles in another location may result in the same delivery time.”
The availability of parking should be considered, too, Wiederhorn says. When delivering to a congested area with a lack of easily accessible parking space, the time for finding a parking space must be factored in. Fatburger solves this problem by having most deliveries done by bicycle or motorbikes with a hot box and cold box attached to the bike.
Add-ons like hot boxes or freezers in delivery vehicles can help guarantee that the quality of the food is not sacrificed by delivery, Morris says.
“You want to be careful that you don’t have the type of product that is undeliverable or that you sacrifice the quality of the product,” he says. “Your food is your franchise. If you are delivering a product compromised in taste or look, then your customer satisfaction will be lower.”
Fatburger designed specific packaging for delivery, Wiederhorn says, using a vented container to prevent french fries from becoming soggy due to steam. In addition, each burger is wrapped in a cardboard sleeve to help keep the shape of the burger so that it’s fresh, visually appealing, and appetizing when the customers open up their burgers.
“We put milkshakes in a freezer box, but you don’t want to freeze the whipped cream,” he says. “Our delivery drivers carry whipped cream on the bike and put the whipped cream on when they arrive at the customer’s location to keep it fresh.”
When incorporating delivery into the business, integrating the process with store systems can help make it as efficient as possible, Morris says.
At Capriotti’s, the use of software that connects to its point-of-sale system helps effectively deliver the address, location, and special instructions to the driver, as well as track delivery status. “If your drivers have to go to MapQuest and plug in an address for each delivery,” Morris says, “then your deliveries are going to take longer than needed.”
Once a brand or unit decides to offer delivery, Morris says, it’s important to commit to building the delivery part of the business in order to make it worthwhile.
“Because many of our competitors offer delivery, we have found that we must offer the service to compete in the marketplace,” he says.
“But if you don’t execute delivery well or fail to meet customers’ expectations, then it will leave a bad taste in their mouth.”
Food & Beverage