Contactless is one of those COVID-19 buzz words that has the potential to stick around for a while. Restaurants were already investing in ordering systems that reduced friction. Often, this meant cutting out direct one-to-one interaction between a customer and employee. Kiosks, for example. Or mobile ordering. Both touted accuracy improvements. Upselling possibilities through AI. Restaurants discovered kiosk orders to be larger, and frequented by younger generations. The same people who didn’t want to call in a takeout order.
According to a report from Dragontail systems, nearly 70 percent of customers ordered delivery during the pandemic. And of those who said they used aggregator apps more than before, over 70 percent said they would be more inclined to order for carryout over delivery if given the option for a contactless experience.
Contactless carryout offers the same impersonal experience some customers actually seek out. But it provides better food quality, and a more profitable channel for restaurants. Not to mention, it’s most likely going cheaper for the consumer.
So while this “human-less” experience has been a lifeline during COVID-19, it could very well remain a powerful tool for operators after—a preferred pickup option for a new generation of guests. Just because there aren’t face-to-face interactions involved, doesn’t mean it can’t be a brand booster, either.
Ido Levanon, the CEO of Dragontail Systems, chatted with QSR about how behavior is shifting, and why it could provide a lift for restaurants across all sectors.
Let’s start with the report Dragontail recently completed. What were some of the key findings?
The main goal of this survey was to understand consumers’ behavior toward delivery. COVID changed everything and we were curious to see what might be different with everyone sheltered at home.
The survey surfaced some really interesting and vital insights for those in the restaurant business when it comes to consumer expectations. For example, a majority of respondents said that food delivered not using protective gear would deter them from ordering from the same restaurant again. This speaks to the importance of PPE for restaurants’ delivery fleets, but also to the trust these businesses must have in the third-party delivery apps in how they will execute deliveries. Additionally, for those consumers using delivery services (Seamless, UberEats, GrubHub, etc.) more than they did before, a majority said they would be more inclined to order for carry out over delivery if given the option for a contactless experience. This is an important distinction for restaurant owners to understand given the delivery landscape and the opportunity to recoup costs by doubling down on pick-up service.
Another key finding surfaced that many customers are not happy with the current state of their delivery experiences, highlighting issues such as the cost of delivery, meals not arriving hot and fresh, delivery delays and mistakes in preparation.
The carryout versus delivery debate was raging pre-COVID-19. Domino’s in particular was trying to build tech around carryout to encourage more business, given its higher profitability overall. But a lot of that had to do with delivery costs, third-party intrusion, driver shortages, and things of that nature. How has that conversation changed now?
I think that the curbside versus delivery debate is still going on. When COVID hit the U.S., third-party aggregators were exposed for the insane fees that they are charging restaurants for use of their platform. Awareness of the revenues restaurants were losing to these companies became heightened among consumers during the pandemic, when the industry was already being gutted and more people turned to delivery options.
Now that the world is beginning its reopening, I think that consumers are trying to figure out what medium is best for them. According to our survey, many are still unsure about eating in restaurants and would prefer delivery. But we also saw a substantial number of people who would prefer to carry out. With phased reopenings, it will be interesting to see how consumers gravitate towards dining in and whether habits will change in terms of curbside or delivery preferences.
Why do you think customers are gravitating toward carryout?
Carryout is becoming increasingly popular, I believe, because consumers love instant gratification. There’s something about placing an order, picking it up and then you have your food. With delivery, I believe that same sentiment still exists, but there is always that underlying thought of “Is my food going to come early? Is it going to come on-time? Is it going to be late?”
Talk about taking carryout forward into a COVID-19 world. What are some key steps operators need to adopt to ensure a contactless experience?
First thing is ensuring that the kitchen is optimized. When a restaurant is able to have a seamless process from the POS all the way through the order being packed up and ready to go, there is a sense of control that allows managers and owners to shift their focus to serving the customer.
In the case of carry out, restaurant workers should absolutely be using masks and gloves to prep and pack the food, as well as engage with customers. The ability to predict exactly when the food will be ready for pick-up through real-time updates is essential, particularly for contactless “virtual drive thru” and other pick-up options, and highlights the importance of perfect coordination between the restaurant’s food preparation and customer arrival.
Do you think contactless pickup is a preference that’s going to last well past lockdowns?
I do. Like I mentioned, there are a number of factors for why consumers might be gravitating towards contactless pickup, especially as the U.S. begins its phased reopenings. There is still uncertainty as to how that is going to go, but I think consumers are going to err on the side of caution until they are more confident in how restaurants are handling prep and delivery while also starting to support consumers who are dining-in.
What do you think customers can expect from restaurants, like Domino’s and Pizza Hut, in the future?
I think that in order for restaurants to survive post-pandemic, they are going to have to become more transparent in the way they service their customers, especially those who are ordering carryout or delivery. That means letting them know their order status, that it was prepared correctly and proper sanitation measures were in use. Seventy percent of respondents from our survey said that they would be more comfortable with delivery if they were able to monitor their order’s preparation from start to finish.
How can a “human-less” restaurant experience still be a brand booster?
If a restaurant is able to cater to their customers exactly the way they would as if that customer was dining-in, then they are doing something right. By ensuring that the entire food ordering process is optimized, from placing the order to having it picked up by the customer or delivered, there is an opportunity for restaurants to show their customers that they are invested in making their experience the best it can be. This includes ensuring that the food is prepared correctly, that delivery and pick-up times are accurate, and that it is hot and fresh as soon as the customer receives it.
If restaurants can live up to the promise of giving their customers a dining-in experience while they are dining out, customer loyalty is only going to flourish, and in turn, boost the restaurant’s reputation.
Also, how important is it to invest in these systems to lessen some of the third-party delivery costs?
It’s very important. Restaurants, whether they are chains (national or regional) or small mom-and-pop shops have an opportunity to take control of their revenues and their relationships with customers. It’s the restaurant that should have those relationships, not the aggregator systems that are just trying to sell.
Broadly speaking, what do you think is going to be the biggest change to come out of the pandemic?
I think that more and more restaurants will begin to focus on delivery and pickup, which will become emphasis points compared to dining-in. I also believe that consumers will continue ordering online directly from the local restaurants as opposed through the large aggregator marketplace.
As technology continues to evolve in the restaurant landscape, more restaurants will have the capability to process orders directly and possibly even start utilizing their own drivers to deliver the meals faster and more effectively, leading to lower delivery costs for the consumer while enabling the restaurants to turn a higher profit margin.