Why food delivery has blown up in 2018 and how it impacts restaurant operators

This week I’ve been thinking a lot about 3rd party delivery and how it impacts restaurant operators.

This massive growth of 3rd party delivery and marketplaces in recent years is very interesting to me – especially the idea of technology companies using their own technology to provide services and create marketplaces for food delivery, which ultimately has given rise to an entirely new community of restaurant operators willing to participate.

Why has this happened and why is it blowing up? Well, it’s been made really, really easy and there’s little barriers to entry. My experience in this industry is that people have often done the easy thing, but the easy thing is not always the right thing.

Looking forward, what I expect to see more of (and something that is already happening) is restaurant operators beginning to see the value in pursuing delivery entirely on their own. High value catering orders, which can be thousands of dollars, are much better handled entirely from the restaurant operator entirely for many reasons.

So – how does a restaurant operator compete in this landscape?

Firstly, they have to become experts at delivery (Pillar #5 of The 5 Pillars of Successful Restaurant Takeout, Delivery and Catering).

The strategy involves proceeding with caution – putting out a limited menu, becoming much, much better at sales on your own, and putting a leader in place for your off-premise operations. Focus on being able to raise prices so that 3rd party delivery companies and marketplaces will make changes that they have to make to allow restaurant operators to flow through so that everyone can make money in the value chain and ultimately the customer can be happy on the other side.

Only when you are doing the business really well yourself, can you really start to deal with the world of partners and marketplaces. I should note that 3rd party delivery is an important component, and it’s not going anywhere – but the economics will shift, and this process will improve for restaurant operators. If you have a partner, you want to have a certified partner that is good at catering deliveries – which is must different than lower value takeout deliveries, i.e. backpack on a bicycle.

This is some of the conversation that will be happening at our 2018 Restaurant Takeout, Delivery and Catering Symposium on June 19th in Denver.

Tickets are still available: Register today.

 

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