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March 4, 2016
Many operators have already identified meal delivery as a way to expand their business without having to make a capital investment. But delivery programs must reflect customer preferences if they’re going to succeed.
Foodservice consumer research firm Sandelman surveyed quick-serve delivery customers to find out what they want, and the results could provide useful guidelines for both fast-casual and full-service operators looking to break into or do better in the food delivery game.
Here’s what the Sandelman survey found.
No app, no problem. Despite the seeming ubiquity of ordering apps, restaurants don’t necessarily need one to capture their share of delivery business. Seventy-eight percent of active QSR delivery users told Sandelman they had used their telephone to place an order, 51 percent had gone through a chain’s website and 15 percent had employed a chain’s mobile app. To be sure, millennial-aged customers used mobile apps more than other demographic groups. But only 19 percent of millennials had ordered this way during the previous year.
When asked about their preferred method of placing delivery orders, 53 percent said “calling on phone,” 35 percent responded “chain website” and just seven percent opted for “chain mobile app.”
But the more options you offer, the better, Sandelman suggests. “Giving users a variety of ordering alternatives to phone orders (e.g., website, chain app) could help improve ease of ordering and encourage more frequent delivery orders, especially among younger users.”
Calibrate your service fee. How much extra are customers willing to pay you to deliver their restaurant meal? Sandelman found that $3.35 was the average delivery charge consumers classified as “reasonable.” The highest delivery charge these customers would “consider” was $4.74. However, younger consumers are willing to pay more.
“Keeping the delivery charge within a reasonable range can encourage delivery orders,” Sandelman advises. “Free delivery, perhaps on a limited basis, may be a way to entice trial among nonusers.”
While delivery charges (38 percent) were the top reason quick-service customers said they didn’t order delivery more often, there are other issues.
Speed is of the essence. Three in 10 consumers said that delivery can take too long.
What constitutes “too long”? Current delivery users told Sandelman that 30 minutes is a reasonable wait between placing and receiving a delivery order. What isn’t reasonable? 51 minutes or more.
“In order to give delivery a try, nonusers may need extra convincing that their orders will be delivered in a timely manner,” the firm notes.
Target residential customers. When survey respondents were asked about their likely occasions for ordering delivery, the top two categories by a mile were “dinner at home” (81 percent) and “lunch at home” (65 percent). Half said they would order lunch at work.
It’s no wonder dinner at home won. Fifty-two percent of survey respondents told Sandelman the primary reason they order delivery is that they simply don’t feel like going out. Another reason thought to be a key driver of delivery—lack of time to cook—was mentioned by just 31 percent of respondents. Another 22 percent said they did not have the time to go out. The survey also found that “lack of transportation was also more of an issue for younger users.”
Keep payment simple. A majority of Sandelman respondents—55 percent—prefer to pay for delivery orders with a credit card when they place their order. Thirty-six percent would rather pay in cash when their order arrives. Only two percent want to pay via mobile phone, and only two percent want to pay using their credit card when their order arrives. These preferences were little changed for male/female or aged-base demographic groups.
Meal delivery is an undeniable trend in the restaurant industry . But successful delivery programs don’t happen automatically. Be sure to keep the results of this Sandelman study in mind as you develop or fine tune your restaurant’s approach.
Contact Bob Krummert: [email protected]
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