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The delivery ROI debate continues

Nice to have | must have | avoid at all cost

The restaurant persepctive

"Restaurants risk cannibalizing their more profitable dine-in sales by encouraging customers to stay at home." Ok, we can start with this ridiculous statement. This thinking is akin to the idea of rewarding bad behavior. Consumers have a choice now whether to cook, dine-out or dine-in, and if it's dine-in, to carryout, use curbside pickup or just takeaway. Excuse me, but , I'm a consumer and I am in charge here. Get real with change and adapt. Oh, and I love this statement from a restaurant chain CEO on if the order takes longer than expected or if the food comes cold and soggy they'll fault the restaurant and may not return - "We encourage all our competitors to do as much delivery as they can, so they can deliver lukewarm food to the people who order it." Man If this was a public company, and it may well be, I'd short that Company's stock right now and fire the head-in-sand CEO for ignoring a paradigm shift in how restaurants operate in 2018 and will in the future.

"By most analysts' accounts, industry-wide restaurant same store sales were flat in 2017. But, restaurant industry analyst, Piper Jaffray projected that $200 billion — one quarter of all restaurant industry sales — will shift to digital ordering and delivery over the next five years."

Oh, and what if customers write a negative review about the wait time for delivery or if the food is cold, it could discourage other people from trying the restaurant. This is just BS and fear of success. Seriously, if anyone believes for a minute that their delivery dining experience is going to be pari passu with a dine-in experience then I they are delusional. It should be packaged well, and delivered in good form. But, I know, as do most reasonable people, that there may be some reheating involved. And, shame on the restaurant for putting a menu item on the digital menu that won't travel well. They are the food experts, right? The delivery vendors just pick up and deliver. Steaks will likely be over cooked. Nachos, well, will need a microwave and never order something that will be soggy, like a pre-dressed salad. Common sense is the key here.

The consumer perspective

I want it when I want it and where I want it. If you can't meet my expectations, then I'll go somewhere else. Moreover, if you tell me no, you have an attitude and I may not even visit your restaurant to dine-in. And frankly, just figure it out because all industries are changing and stop whining already. Time are changing and in business, you have to adapt or die. The restaurant industry is a very mature, modern industry and our recommendation is to embrace technology and automation to re-invent how you serve today's consumers. And, it's not just about blaming Millennials for their digital demands. As a cohort, they spent $78 billion on restaurants in 2017, so what. Boomers spend more. So, my message to restaurant operators is it's your choice, to build a wall around your business and mis-read the tea leaves. TImes are changing. I read that by 2022, over 100 million people in the U.S. will be ordering online using mobile alls and digital assistants, up from 50 million today. So, go figure it out.

The vendor perspective

Restaurants must now either meet consumer expectations or lose business. The trends are very clear that digital ordering and delivery is now the most convenient way to get ready-to-eat food on the table. But, don't think this is Fake News. Just look at the data. Moreover, conversational commerce is a big trend beginning to blossom. Orderscape predicts that over 20% of all mobile digital orders will be originated using voice by 2021.

Noah Glass recently said "By looking at growth trends in digital ordering and delivery, it's crystal-clear that both digital ordering and delivery are reshaping the restaurant industry by capturing an increasing share of the foodservice dollar. Though some industry leadership refuses to believe this is actually an increasing trend, the numbers and the theories behind consumer behavior indicate otherwise."

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