Why Data Ownership Should Be Key When It Comes to Tech in Foodservice

According to the National Restaurant Association’s State of the Industry 2019 report, “more than 8 in 10 restaurant operators agree that the use of technology in a restaurant provides a competitive advantage, and many are planning to ramp up their investments in technology in 2019.

This is great news for consumers but with so many choices in the technology sector, operators can be left feeling overwhelmed.

What’s important to remember is whichever tech advancement— whether it's their POS, online ordering, smartphone app, mobile payment, or loyalty program— operators decide to prioritize, it must make sense for their type of business and unique customer needs.

Watch the video above to learn how BurgerFi accurately figured out what tech advancements make sense for their business to get a proper ROI and how data ownership must be a priority in this day and age!

Produced and Researched by:

Vanessa Rodriguez

Vanessa Rodriguez

Writter & Producer


VIEW BIO

Third Party Delivery Life or Death for the Restaurant Operator

The conversation surrounding food delivery continues to be a major concern for today’s restaurant operators as they wade through a number of new technologies providing third-party delivery solutions.

GrubHub is up by over 38 percent in sales. The online delivery marketplace has also acquired Tapingo, Eat24, and LevelUp, and recently partnered with Dunkin’. However, not far behind, DoorDash just overtook GrubHub in U.S. monthly food delivery sales. The ever-popular Uber maintains a steady 91 million monthly active users in over 20 countries and provides food delivery for 50 percent of the U.S. population.

Nevertheless, our research here at Foodable Labs shows that there are some beginning signs of fatigue in both the operator and the consumer in terms of sentiment toward third-party delivery. An analysis of over one million conversations about third-party delivery reveals a few key areas that consistently problematize the companies’ claims to convenience.

Top 10 Third-Party By Sentiment Rating

Source: Foodable Labs

The Fees hit both the operator and the consumer. Operators typically pay third-party companies 20 to 30 percent of the base cost of the ordered food. Depending on the delivery service, consumers may pay a yearly fee or pay fees for delivery from certain restaurants. In just this past quarter, there has been a sentiment drop of 3.6 points on the consumer side across the top ten delivery services. On the operator side, the drop is even direr: sentiment fell by 5.8 points.

The Data represents a constant battle between the operator and the delivery service: who owns a guest’s information, order habits, items, and frequency of purchase? The restaurants believe the guests’ data belongs to them because the customer is their guest eating their food, whereas delivery services want to leverage the data to the max with deals, app notifications, and constant marketing.

The Brand is a key area that hits home for every restaurant business. Because the restaurant loses control of the delivery, brand continuity often comes into question. Food safety and new packaging is a constant concern for restaurants to ensure they maintain each customer’s business and overall enjoyment of the restaurant.

The Jimmy John’s sandwich chain, one of the first restaurants to embrace delivery services, has refused since its beginnings to deal with third-party companies due to these issues. “We’ve been researching … what is best for our customers and our brand,” says Jimmy John’s Chief Marketing Officer John Shea. “In our exploration, we came to the conclusion that we do it better.”

The question still remains whether food delivery companies like GrubHub and UberEats can come up with a program to solve these issues. My take is that the industry is incredibly complex: businesses range from independent to franchises to emerging chains to Titans of QSR, and each business has different needs and complaints regarding the current model of third-party food delivery.

Some members of the industry are seeking the bottom line of profit, while others are looking for top-line sales and incremental lift. The brand also comes into play, and profit is always a factor. The guest connection could also change the entire landscape of food delivery over the course of the next few years.

A few brands are taking matters into their own hands. Third party delivery can deeply cut profits, so fast-casual restaurants like Modern Market and Panera Bread are investing in their own ordering and delivery platforms. This move is risky, as it could limit the company’s competitive potential. But the choice ensures that the restaurant can maintain brand continuity and better address customer concerns regarding the food delivery process.

Third party delivery providers have a fiduciary responsibility to grow the business and create stockholder value. And history shows that pushback from the community can be a deterrence to the growth of these companies. The real difference here is that the dynamics of the restaurant industry does not fare well for third-party deliverers. The real future for the third-party delivery companies lies in the development of their own foodservice brands —whether they are cloud and virtual kitchens, or full on commissary systems that can meet massive demand. In my video report from last November, I break down the idea of how third-party restaurant brand development is the real gold rush for likes of Uber and GrubHub.

Uber Drone Delivery Begins Testing This Summer

Your next takeout order could be delivered by drone in just a few months. Uber is performing drone delivery test trials in San Diego this summer, pending approval from the FAA.

The drone will not deliver food to customers’ doors during these preliminary trials. Instead, the drone will arrive at a designated safe landing zone where an Uber courier will retrieve your order and complete the delivery. Uber Elevate, the team handling drone delivery, intends to use this method to reduce the chance of noise pollution, collisions, devices and packages falling midair, and other safety concerns. Delivery boxes are crafted with carefully selected packaging materials that keep food warm throughout the trip.

Uber appears confident that the technology will become the new norm. According to data from previous company tests with McDonald’s, drones are three times as fast as other modes of transportation. Drones can travel 1.5 miles in seven minutes. With a driver or cyclist, such a trip takes about 21 minutes on average.

According to Eric Allison, Uber’s head of aerial projects, the company has invested in this technology in large part because of the growing popularity of Uber Eats. Allison believes drone delivery will give Uber Eats the edge over its competition, with “selection, quality, and efficiency” drastically improving thanks to the advent of drones. Uber analysts predict that within the next ten years, fast food restaurants will have completely remodeled their kitchens to better suit the needs of drone delivery.

Not far behind, Google has already been performing drone deliveries in Finland and Australia through its offshoot Project Wing. FedEx is developing a food delivery robot, and intends to partner with Pizza Hut, Walmart, and Walgreens in the endeavor.

Ever looking forward, Uber Elevate is also in the process of designing flying taxi technology. Test flights are tentatively planned for 2020 with an anticipated commercial launch in 2023.

Research by:

Paul Barron

Paul Barron

Editor-in-Chief/Executive Producer


VIEW BIO

3 Tech Companies Revolutionizing the Restaurant Industry

Modern consumers expect restaurant operators to use and fully integrate cutting-edge technology into their business model. However, most restaurant operators in the industry find themselves unable to keep up with today’s constantly evolving tech trends.

On the latest episode of The Barron Report, host Paul Barron chats with three emerging companies that are handling the necessary tech shifts for operators so that the restaurant industry can focus on doing what it does best: making delicious food.

Sterling Douglass is the co-founder and CEO of Chowly, a first-of-its-kind company that helps restaurants lower the cost of labor and improve margins by fully integrating a restaurant’s third-party online orders into its point-of-sale system. Simon Bocca, the COO of Fourth, has helped his company grow into a comprehensive provider for practical restaurant and hospitality management solutions. As the founder and CEO of next-generation software platform Harri, Luke Fryer is dedicated to finding employee-facing solutions for labor-related challenges in the hospitality industry.

Douglass notes that third party delivery companies are beginning to consolidate and become more amenable to restaurants. “Third parties are moving away from the growth-at-all-cost phase. Tech companies have tried to get into the virtual kitchen space and fail—they have much more success helping restaurants and using technology. You need a marriage of both.”

“Restaurants need to differentiate themselves by making the customer experience right for that business,” says Bocca. His company, Fourth, provides data dashboards for restaurant operators so that anyone at any level in the company can examine the data, troubleshoot problems, and plan accordingly. “Everyone is fighting for the same customer.”

“All of us, regardless of age, have been incorporating these trends and behaviors into our daily lives,” says Fryer. He contends that operators need to start treating employees as consumers to help stabilize the industry-wide retention problem. “The issue is that if we’re not putting technology in front of our employees that engages them and satisfies them, then that has a direct correlation to retention. It’s the industry’s biggest challenge by far.”

Learn more about these three breakthrough companies and how restaurant operators can address today’s tech challenges in the above episode of The Barron Report. And if you would like to keep listening, check out The Barron Report on iTunes Now!

Produced by:

Paul Barron

Paul Barron

Editor-in-Chief/Executive Producer


VIEW BIO

Amazon Discontinues Its Restaurant Delivery Service

By the end of this month, Amazon Restaurants will be no more. First developed in 2015 as an Amazon Prime perk, the food delivery service was designed to compete with the likes of Uber Eats, Seamless, Postmates, and DoorDash. Current Amazon Restaurant employees have been moved to other roles within the company or will be supported in the process of securing employment elsewhere.

Analysts have been quick to note Amazon’s recent $575 million investment in the British food delivery service Deliveroo in May. During its four year run, Amazon Restaurants expanded from its hometown Seattle to more than 20 U.S. cities and briefly entered the U.K. market before closing the latter development in 2018. Deliveroo has successfully expanded to a number of countries including France, Germany, Spain, Australia, and Hong Kong.

With over 91 million monthly active users, Uber Eats is poised to take the lead in on-demand delivery. Like Amazon Restaurants, Uber Eats was established in 2015 — unlike Amazon Restaurants, it has continuously grown since its launch. Uber Eats currently services over 20 countries, in part thanks to its lucrative partnership with McDonald’s.

And the delivery platform will continue to be a threat to Amazon: Uber Eats intends to add grocery delivery options, putting AmazonFresh on the defense. AmazonFresh has been around since 2007, but its growth has been slow. In recent years, the company has abruptly dropped service in multiple U.S. states. The Uber grocery development team is already in the works, and will likely be based out of Toronto.

Despite its success, Uber Eats has struggled to establish a consumer-friendly fee structure. The structure was recently updated in March to address these concerns, but the update appears to be more confusing than the original design. Fees now vary depending on your location and courier availability, and a 15 percent service fee is applied to the subtotal of all orders. In The Barron Report episode below, host Paul Barron unpacks the new Uber Eats fee structure and predicts what may be ahead for the growing company.