Takeout vs. catering: Do you require two delivery strategies?
It’s no secret that the U.S. restaurant and food service delivery model is going through rapid change. It is the advent of technology that is enabling this market to grow because — for the first time in the history of food service — the power of ordering is in the hands of consumers. This connects the consumer to operations and speeds up the entire transaction cycle no matter the service channel being used.
In large markets such as takeout and catering, new entrants and services continue to emerge. The restaurant industry has been trying to monetize a delivery model for decades and it has been a challenge. This is because operators do not have “logistics” expertise and, except for pizza delivery models, the rest of the industry has been slow to adopt delivery.
In the last few years, companies such as Grubhub, Uber Eats, DoorDash, PostMates, Amazon Prime and many others have further confused the landscape for food service and restaurant operators. The goal of these companies is to bridge the logistics gap between ordering and delivery; however, often their strategies are disconnected from the actual restaurant’s strategy around order fulfillment, which fall on the restaurant partner.
If the restaurant partner does not have a clear business strategy for segmenting off-premise transactions, the enterprise often fails. For me, the strategy has always been about segmentation of consumer solutions in the marketplace. When a customer wants to order a delivery, the question is: “What would you like delivered?”
And so, the differentiation in menu and positioning of your products for purchase remains deeply connected to the business strategy. Where does your takeout menu begin and end? Where does your catering menu begin and end? What are the policies and procedures around each menu?
And so, when it comes to delivery, what is the best operational strategy for your foodservice operation? The answer lays deep in the following questions that your brand must ask its consumers:
- Would you like delivery from our takeout menu? or,
- Would you like delivery from our catering menu?
Once you are able to offer your customers those two service and menu channels, then the delivery strategy will become clearer to you. Depending on which service your customers selects, you will either outsource the delivery or do it yourself. What you decide will depend wholly on the transaction risk, which is directly related to transaction size and value. Clearly, as operators, although we need to care about every single meal and order we serve, we may have to care even more about a catering order that is going out the door and has a transaction value of $700, as an example. This brings a whole new dynamic around our attitudes toward delivery.
There is an idea that third-party drivers can be a good strategy for certain stores where orders are consistently sparse, and perhaps for small value orders; however once you get a stream of transactions or for transaction values of higher risk (i.e. catering orders), you probably want to have your own delivery drivers for control, efficiency and brand protection. The number of drivers you hire and their hours should depend on your level of delivery volume and the stream of your business between takeout and catering.
Regardless of the path you take, it’s crucial that you set the right standard for your delivery drivers, including third-party delivery partners. This requires training them on the ins and outs of your brand, how you want your deliveries performed your expectations for what makes a perfect delivery.
Each driver should have a clear set of expectations and should also know what’s needed from them on a daily basis. Some key responsibilities for your drivers should include:
- Keeping their vehicles well maintained and always in ‘ready’ position
- Check daily drivers logs and the logs for the next day, and keep all paperwork in order
- Upon reporting for work, take the orders that have been preassembled and packaged by the kitchen, sort them out for their routes and pass them along to other drivers
- Report all delivery problems back to the director of catering ensure proper follow up takes place
- These functions should take up an estimated four hours of the day. Any other part of their shift should be spent jumping in to help with orders wherever necessary.
The point of distribution is the high-risk point for your catering operation when it comes to deliveries. This is where things can go wrong. Your brand’s reputation and your off-premise experience are in the hands of your delivery drivers once your catering orders leave your four walls,. Therefore, it is imperative that your drivers understand how to properly drop off and set up your orders, and that your presentation and packaging reflects the best of your off-premise operation.
Navigating the world of delivery can be done with the proper thought, planning and execution. Let’s move the conversation from just delivery to “takeout vs. catering delivery.