The rise in home-delivery from restaurants has created a new phenomenon – a popular restaurant that’s thriving, yet has few diners. Whether progress or a blip, Ian Jindal pauses his pork bao and tea eggs order to query whether retail can be split so readily into product and delivery.
As winter nights draw in it’s only human to hunker in front of a computer and order food. Services like Deliveroo, Just Eat and Hungry House have brought ordering takeaways into the Uber age. The modern delivery service aggregates many cuisines and restaurants, consolidates payment, tracks orders and then makes daily suggestions. It’s the new standard-bearer of frictionless commerce. Oh, did I mention Uber? Well, they’ve launched UberEATS with no sense of irony and Amazon has donned a toque blanche with Amazon Restaurants.
Whether in retail or hospitality, there are three levers of differentiation to manipulate, namely: customer connection; product integrity; operational capability.
If you know what a customer wants, how to inspire them, and how to satisfy their needs, address their attitudes and respond to their behaviours, you have a competitive advantage. If you have a qualitatively better product, with clear value, integrity and terroir then you will stand out against poor substitutes or weaker alternatives. If you can deliver repeatedly, consistently and at scale then you have an advantage over those who are unable to execute well.
As with brands who supply retailers, so the impact on take-away restaurants has been an opportunity as well as a challenge. Many restaurants have seen an increase in custom, with a wider distribution now that they are not dependent upon footfall in their physical store.
An interesting phenomenon is the empty, successful restaurant. A popular local, casual restaurant is now only 20% full on a weekday evening – yet the kitchen is busier than ever, feeding happy regulars who have decided to eat at home. The benefit is that the restaurant’s takings and margins are up, however they increasingly will live or die on the quality of the last meal delivered. Furthermore, the friendly and unique experience that forged loyalty in the diners in the first place is now diluted as dining space is converted into enlarged, more efficient kitchens. Customers are tempted to trial a restaurant based on how busy it seems – a herd, social proof approach that’s part of our psyche – and this will become increasingly difficult if the restaurant is empty… Perhaps the new sign will be a buzzing fleet of Deliveroo mopeds at the kitchen door? Much as retailers depend less upon the primacy of physical real estate and more upon being ‘front of mind’ via social marketing and search engine visibility.
The quality of the food and the success of the business now has different signifiers: location, customer footfall and ambience are replaced by readiness of unprompted recall, availability of service and the experience memory. The levers of customer, product and operations are consistent, but the interface and instantiation change with the market capabilities.
Coke’s Robert Woodruff’s aim was to put a bottle of Coke “within arm’s reach of desire”, and he set out to create both the global desire and the global delivery. Since many retailers don’t have product exclusivity, nor unique logistical capabilities, the key to sustained success is to create that desire in the customer’s mind: to make their ‘restaurant’ a desirable, destination experience, where spending time in your company is part of the fun.
We need to engineer, hone and cherish the time with our customers so that the experience we create is more like the best dinner out with friends, or catchup with a mate over lunch, or a landmark dinner with our significant other. If we are to avoid the solo-dining, tv-dinner purgatory of price-war and promotion, we need to re-tool our businesses to tackle the questions of experience and desire, not just of transactions. While there may be successful, empty restaurants in the future, few retailers would relish becoming no more than a gleaming distribution centre.
Retail is a social, engaged, interactive industry and our role is at the heart of it: initiating, orchestrating and interacting. While we may offer take-away, we are still keen to keep the dining rooms buzzing – for they, afterall, form the foundations of our sustained relationship with the customer.
