The national rollout of delivery service comes after Wingstop found success in three different test markets in late 2017 and early 2018. In all three test markets Wingstop saw sales lift from delivery.
“We have been able to demonstrate that the lift in sales from delivery is highly incremental and profitable at the restaurant level,” Morrison added. “In fact, the profitability is further enhanced by the checklist we have seen in our delivery test, which is even higher than the $5 average checklist that we see on ordinary digital orders.”
In October, Denver, which has 20 Wingstop restaurants, became the first market to offer delivery at all locations.
“Denver was a logical next step for us because it presented a smaller, easier to manage market for validating our delivery playbook and it is a strong market for Door Dash, our third-party delivery partner,” Morrison explained.
Los Angeles is the next market where Wingstop will launch delivery service beginning in November. For Wingstop, this market is its largest domestic market “from a restaurant count perspective,” so it will be a good test to see how the delivery process works in on a broader scale.
“Following a successful launch in Los Angeles, we plan to add delivery in the Houston market bringing us to roughly 25 percent of our domestic footprint offering delivery by the end of 2018,” Morrison said. “We believe the space, market-by-market approach to our rollout of delivery would help us ensure that we deliver on our guest expectations while introducing new guests to the Wingstop brand with a great initial experience.”
“We believe by the end of 2019, we should have delivery available to over 80 percent of the domestic system,” he added.
The word "delivery" came up 38 times in the call. Morrison said about two-thirds of guests came through the Wingstop app, which, as noted before, is being rebuilt.
"There is only about a 15 percent, maybe 20 percent overlap," he said, referencing carryout customers versus delivery customers, "and if you look at the results we’ve seen so far, it would suggest that at an 80 percent or so level of incrementality that these truly are new guests that are coming in the door. We can also measure that by looking back at information about these guests to see if they leverage Wingstop before for a carryout order using our digital means."
In regards to the third-party space, where DoorDash represents that other third of business, Morrison said, "... if you think about those new customers from a data sharing perspective, again, the majority of them are going to be customers that data we own. But we certainly will share information with our partner to ensure that we clearly understand who that guest is, but we technically don’t own that customer in that transaction if it comes through a secondary source."
Getting to an 80 percent cover of the delivery system will take store-level changes. Morrison ran through a few.
"A modification to our strategy for how we package product to separate French fries from the rest of the order and then very simply just a change in procedure on how we cook our French fries and I’ve been asked this question before: Why don’t you just go ahead and make that procedural change everywhere? Part of it is because we want to make sure that we train it in properly," Morrison said. "So that happens and then, really just an education and awareness to how to treat delivery orders recognized when DoorDash shows up and a reinforcement of done right and on-time, the two key measures for the highest level of customer satisfaction."
Expansion, both domestically and internationally, continued for Wingstop as well. Of its 1,215 worldwide, 1,059 of those are in the U.S. “We remain confident in delivering strong unit growth driven by the momentum in the number of new restaurant commitment sales, as well as the healthiness of our existing pipeline,” Morrison said.