More on delivery
“We're focused on driving traffic momentum profitability through a series of strategic initiatives using a phased approach,” Cappasola said. “This starts with our digital transformation through our new app and expanded third-party delivery.”
Del Taco launched delivery with Grubhub to all company-owned restaurants during Q1 of 2019. The company is testing out how to optimize its systems and expand coverage to meet customer demand.
During testing, consumers were willing to pay for the convenience of delivery and Del Taco worked in pricing without backlash. Delivery check averages are about two times the average of in-store checks.
“The consumer was willing to pay it because of that additional convenience to you being able to get Del Taco delivered to your doorstep,” Cappasola said.
One way to deliver efficiently will be by adding more delivery partners. Delivery with DoorDash and Postmates will be rolled out in 2019.
“Our strategy on delivery as we believe a multi-delivery service provider approach is the best way for us to kind of breakthrough and optimize consumer demand,” Cappasola said.
Each delivery service offers something different and by partnering with three different services the company will be able to meet the needs of its customers. The Grubhub rollout is still in its infancy and Del Taco believes the performance will grow as marketing is rolled out throughout the rest of the year.
“Driving brand awareness is going to be a key piece for us as we move forward,” Cappasola said. “The other piece that's going to help create some more demand on the delivery front is going to be adding the additional two providers.”
On the tech front foot
Del Taco’s app launched last November and already has 400,000 registered users. In order to build its database, Del Taco provided offers through the app. Cappasola said the app would be a long-term part of the brand’s overall marketing platform, and the “long-term opportunity it provides to drive guest frequency as it scales.”
There is plenty of room to grow and add users to the app. There are about 700 users per location. The number of users is OK, but Cappasola believes the company can break seven figures.
“Of course, we're ramping up quickly,” he said. “I could see us in the high six-figure range, maybe low seven-figure range this year.”
Now that the company has built a base for the app, Del Taco will shift its focus to a deeper loyalty program on the platform in 2019. The company wants to give customers a reason to come back on a weekly basis.
“We're looking at their activity, we're sending them targeted offers,” Cappasola said. “Over time as the database becomes bigger, it will be easier for us to be more certain in regards to how we can move the needle on the same-store sales side of the business.”
“There are a lot of exciting things happening at Del Taco,” he added. “Our digital value and innovation strategies will serve as important catalysts for sales growth, and as always, we plan to complement our top line initiatives with effective margin management.”