UBEReats kills off instant delivery – April 19, 2016

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Hello everyone.  Sorry I have been remiss with posting.  I’ve been running hard with our growth at The Catering Institute, MonkeyMedia Software and Catering Insights.

Saw this article today:  UBER kills of Instant Delivery

As we all know by now, delivery and logistics for getting our food to consumers is a challenge.  I have always maintained that the business model for off-premise sales is evolving to a place where our restaurant community MUST understand the right business strategy behind takeout, delivery and catering.

As operators, our restaurant community is being bombarded with 3rd party delivery companies who claim to be the “next best thing” for the restaurant industry.  These companies are being funded with millions and millions of dollars of VC capital, and they have spent ALOT on sales and marketing.  Their objective?  To see if they can ramp up adoption of their technology and services by consumers.  This in turn, would provide them with enough business leverage to “squeeze” restaurateurs and force them to list their brands within the delivery companies ecosystem.

I have known for years that the business model for delivery ONLY works with large occasion group orders.  And so, when it comes to these types of orders, I argue that the consumer solution that restaurants need to focus on is “Catering” and not large scale “Takeout”.  Why?  The reasons lie in the subtlety of the business strategy.  

The differentiation between your “takeout” products and your “catering” products is a key component to achieving success with your off-premise business strategy.  If done properly, menu optimization is a critical step towards designing a consumer solution that your brand can scale.  A platter of sandwiches is a completely different product than a single sandwich in a bag, for example.  To continue, a fruit platter requires a completely different manufacturing, assembly and packaging process when compared to making individual fruit cups.

To this end, I am a BIG believer , that because of the inherant risks that come with large value orders, restaurant companies are far better off ramping up and controlling their own deliveries for the catering channel.

This brings up the big question for our community.  How do we manage “delivery for takeout orders?”

Well, one answer might be, focus on defining your catering program and the differentiation between takeout and catering.  Then, when your customers want delivery, drive them to your catering channel for easier and a more predictable experience.

How do you make this paradigm shift in your organization?  Listen to these wise words from Fred LeFranc, the founder at Results Through Strategy.  He specializes in helping companies to make this kind of shift in their thinking.

Your customers and your operations will thank you for it.

Who is driving your off-premise business strategy?  UBER?  Door dash?  Postmates? ….. I hope not.

Let’s talk catering!

3 thoughts on “UBEReats kills off instant delivery – April 19, 2016

  1. Roman Rytov says:

    Very prudent observations. While we’re not doing delivery yet we’re giving a try to uber who debuts in our area and its marketplace is not very crowded. The goal here is to create awareness and the name recognition. We’re willing to give 30% away short term. At the same time, uber only will deliver individual orders and we take care of catering ourselves. Although we recognize possible risks with strangers delivering our food we’re willing to take the risk and give it a try. All the concerns pertinent to 3rd party delivery are relevant for the scenario when you hire the drivers yourself. However clearly the expectation is the optimized model that the 3rd party offer. With your own force it’s inevitable to have too many or too few drivers which either negatively affects the bottom line or the customer experience. Anyway, for us having a sense of demand is the most critical factor and getting exposure through their marketplace plus totally outsourcing delivery makes sense at this point. We’ll share our experience at our blogs.

  2. The sun shines for everyone. It will interesting to see how this all pans out as in on-demand convenience. Too many options in my book at this point.

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