The Complexities of To-Go, Delivery, and Experience Outside the Restaurant – FSR magazine
Prior to the pandemic, North Italia didn’t even have online ordering, much less delivery. “Off-premises wasn’t a big part of the business prior to COVID happening,” admits DJ Duporte, marketing director of the emerging Italian brand that’s grown to nearly 40 locations.
He continues, “It was such a big opportunity for the team to not just capitalize on this opportunity to get in front of more guests, knowing that we couldn’t get people into the building, but how are we going to personalize that experience and make sure that we’re doing everything in our power to make the experience that you’re getting during takeout or to-go just as incredible as what you would be getting inside in the restaurant? So there are so many processes that got put into place just to make sure that it was seamless.”
Created by Sam Fox under Fox Restaurant Concepts, which was acquired by The Cheesecake Factory in 2019, North Italia is a NextGen Casual brand focused on crafting the future of modern Italian dining. The company has come a long way since the start of the pandemic, and now has a partnership with third-party delivery platform DoorDash. Duporte says the exposure from the platform and the ability to find new guests has been worth it, always with the goal of converting those off-premises guests into in-restaurant guests.
But as most restaurant operators know, offering delivery comes with its fair share of challenges, from elevated costs and food safety concerns to packaging and how to elevate the customer experience outside of your four walls. Those are just a few of the reasons why some larger casual-dining brands like Olive Garden and Texas Roadhouse have refused to do delivery for so long.
“It’s interesting that a lot of full-service restaurants have kind of strayed away from delivery, because I get it—it’s probably not the best representation of your products when you want it on a beautiful plate and people are paying $50, $40 for something that’s coming in a takeout container and they might need to heat up when they get home,” Duporte says.
“But I think it’s recognizing that we have to be where our guests are, right? And unfortunately, that isn’t always inside of our restaurants,” he adds. “Why wouldn’t we do everything in our power to make sure that that delivery experience, that to-go experience, is as close as our in-restaurant experience as possible?”
For Jon Taffer—the star of Paramount Network’s “Bar Rescue,” and founder of emerging pub franchise Taffer’s Tavern—delivery is unavoidable.
“Delivery is too significant, and you can’t ignore it today. The question is, how do you do it in a profitable way? And how do you do it in a way that doesn’t take away from in-person visits?” Taffer says. “If you’ve got the greatest hamburger in town, you really don’t want to deliver it, you really want them to come in and get it, because that’s where you can make your money.”
As far as third-party delivery services go, Taffer doesn’t want to “beat a dead horse, [but] they’re expensive. Sometimes the food doesn’t get there quick enough, we can’t control the temperature of its arrival, etc. So it’s a little shaky. I wish we didn’t have to do it, to be honest with you,” he says, “because sometimes I think that the brand risk and the impact has almost as many negatives as the revenues are positive. But that said, you have to do it today because it is a reasonable revenue source.”
Deciding between third-party delivery platforms and building a custom app ultimately hinges on an operator’s overall goals, budget, and long-term strategy, says Kırımgeray Kirimli, director of New York-based Flatiron Software Co. “Restaurants may choose custom apps when they seek greater control over their brand image and customer experience,” he says. “Unlike third-party platforms that present a standardized interface, a custom app allows them to showcase their unique brand identity, design, and features.”
“For instance, if a restaurant values direct customer relationships and wants to implement exclusive loyalty programs, promotions, or discounts, a custom app becomes a strategic choice. It empowers them to build a direct connection, gather valuable customer data, and adjust marketing strategies based on individual preferences,” Kirimli adds.
However, to offset the challenges of limited visibility and user base up front, brands must implement a robust marketing strategy to drive traffic if they’re going the custom food delivery app route, Kirimli advises. “Strategic marketing, exclusive promotions, and a focus on user experience can help restaurants overcome these downsides and build a loyal customer base on their custom apps.”
Taffer adds, “as restaurateurs, this is the world today, and we have to understand that. But dare I say to us all, if we can’t create the kind of in-house experiences—video, music, pace, energy, fun; or upscale, elegant, slower pace, right environment, intimacy—if we can’t create the environments to get people to get off their couches and come to our facility, shame on us.”
Limited menus and other trends
One trend that food futurist Liz Moskow is seeing in the off-premises space is operators curating smaller format offshoots, as well as “experiential” takeout versions of their menus, that can be heated up at home and not have the flavor suffer. “But the wraparound is that it’s typically going to cost the consumer the same or more to pick up or do that experience through giving up portion sizing,” she says. “A lot of the perception is that it’s not as good as the restaurant, perhaps their to-go packaging is limiting the size and portions, and so it needs to be almost a separate, same but different to-go experience, so they’re shortening their menu of what can deliver and surprise and delight consumers much like they’re on-premises experience.”
Snooze, an AM Eatery, has experimented with a limited to-go and delivery menu to target consumers on their way to work in the morning, enticing them to swing by and grab a cup of coffee and a breakfast burrito. “We have been testing that in quite a few markets to see if that’s going to increase or impact any of our weekday traffic, since weekday traffic continues to be tough and rough for us,” says Jeremy Edmonds, Snooze’s VP of people and culture.
The NextGen Casual brand is also playing around with creating custom catering options. “It’s what you like about Snooze, but [we] put it into what’s traditional with catering, whether it’s breakfast bars, utilizing our oatmeals and our yogurts, or going more to the taco type route or just traditional breakfast,” Edmonds explains. “That’s been successful for us in kind of reinventing or reimagining our menu just slightly to cater to that group of people during the weekday that wants to bring in breakfast for a large meeting.”
The challenge is positioning that offering as an exciting, more premium breakfast or brunch experience that adds a certain luxury factor to a guests’ work week, as opposed to picking up an egg and cheese sandwich they could’ve bought at a convenience store or at a quick-service restaurant at a cheaper price point. “It’s keeping those elements that align with your brand or your menu or what your loyalty customers expect from your brand, and it could be as easy as just a new sauce,” Moskow suggests.
Similarly, Another Broken Egg Cafe is seeing its catering business continue to grow post-COVID, though delivery sales have been flattening out, notes Brandy Blackwell, VP of marketing. “Getting people to think about full-service breakfast delivered to their house—a lot of our stuff doesn’t travel that well,” she admits. “People are savvy. We know fries don’t travel well. So you’re either somebody who’s willing to accept that, or you don’t order delivery and you go pick it up.”
From Greg Graber’s viewpoint, “folks that order delivery are a little more forgiving in terms of quality,” he says. Graber founded Heritage Restaurant Brands in 2016 and has taken its Huckleberry’s Breakfast & Lunch brand from seven to 31 units with plans to grow unit counts 35 percent in the next four years.
“And I don’t think for us it’s a way to source a bunch of new guests,” Graber counters. “I think that it is existing guests that we’re taking care of that use us for different occasions, and that also bodes for a little bit more forgiveness when it comes to maybe premium price or it’s not quite as hot as it would be on the table, as long as it’s consistent.”
Though Huckleberry’s uses third-party delivery providers, the company is working on first-party app development, attempting to reduce costs for franchisees. “That transition is going to take time, it’s a commitment to keep going, but I think that we will stick with it. It’s been successful for us,” Graber adds.
Regarding third-party delivery, Blackwell points out the shift in recent years of restaurateurs inflating their menu items upwards of 25 percent on apps to offset the impact of the platforms’ commission fees. “I think delivery is not going to continue to grow if the inflated numbers that third parties are charging to pay their drivers [continues], and restaurants are allowed to inflate, too, it starts to become, ‘is that worth it?’ So I think that’s an interesting concept,” she explains. “I don’t think we’re going to change our packaging or do anything different to try to get more delivery sales—the numbers don’t work.”
One aspect many restaurants are grappling with is how to direct consumers to their first-party delivery ordering sites, especially when Google can pick a third-party delivery service provider (DSP) it has a partnership with in certain markets, adds Christine Lorusso, senior director of digital marketing at Firebirds Wood Fired Grill.
“So that’s one struggle that we’ve come to find, and the way that we look at it at Firebirds is more like we have to be on all of the DSPs because that’s just the world that we live in today,” she says. “And the guests that are the DoorDash customer or the Uber Eats customer, they’re going to be loyal to that delivery platform because they’re earning those points, they’re not our guests, so we’re going to take them at the inflated price point, [and] we’re going to appreciate their business.”
“But any guest of ours—whether they’re dine-in, whether they’re part of our loyalty program—we don’t even talk about third-party delivery at all. We drive everybody back to our own site,” she adds. “We really focus on crafting a menu and incentives where you can only get certain categories or items when you order directly from us versus from those other partners, and just try to strategically drive them back over to our own channels.”
A large driver of that strategy, aside from the costs and inconvenience, is the ability to access guest data. “None of those partners share the data back with you unless they’re filtering in through our own online ordering system,” Lorusso notes, “so we don’t even have access to that guest data, and that’s unfortunate. It’s a lot to manage and a lot to overcome, but just making sure that we put our brand first and foremost I think is the way to go for sure.”
For Cai Palmiter, VP of marketing at JINYA Ramen Bar, the most difficult part of navigating to-go and delivery is ensuring customers have a similar food experience as they would get dining in.
“With us, we tell you how to eat your ramen when you get to the restaurant. Those bowls that you have are made from Japan that can hold heat; outside, you don’t feel the heat, but inside, your server will ask you to stir it from the bottom so the heat rises, and that’s how you actually fully enjoy the ramen,” she says. “How do you do that [with off-premises]? We have to come up with a little QR code on your to-go bag that says how to eat your ramen, or how to heat up your ramen.”
Are virtual brands still viable?
Geo Concepcion “tried everything under the sun” during the pandemic’s survival mode and subsequent turnaround period—including trying out a couple virtual restaurants and ghost kitchens. “I was a huge proponent and had high hopes for those,” he admits. Concepcion joined the Greene Turtle in 2019 and led the company through the pandemic, positioning it for the most rapid rate of growth in the company’s 46-year history.
But now, the tide is turning. “I’ll call it the trend of, people still love to work in their pajamas, but not spend as much, and so that’s sort of shifting the dynamic,” Concepcion says.
“We’ve seen huge declines in overall to-go sales. The virtual concepts are almost irrelevant right now. And so our focus is sort of much more on the dining experience and bringing people in,” he adds. “I think for us, it’s just been a double sort of shift on the delivery side.”
Moskow previously helped create virtual restaurant companies while serving as VP of brand development for Nextbite, and shares how in the early days of virtual brand creation, “you went in skeptical that this was ever going to work because of all the layers and complications in terms of delivering consistency to the end consumer,” she says.
“Now you have not just the delivery aspect that’s delivering food that’s subpar, you have restaurant operators who are unvetted dealing with concepts that aren’t their bread and butter, so to speak, and so I don’t think there was enough time to work out kinks,” Moskow continues. “The virtual brands, I think, spread themselves so thin and picked sort of any operator to kind of deliver that concept.”
She adds, “circling back from the beginning, the incarnation of the virtual brand is almost just that reduced menu for off-premises of what your core competency really is, as opposed to creating brands that don’t align with what you actually do in-house.”
