Why Millennials are Still Willing to Pay a Premium for Food Delivery

We know that the Gen Y crew is using delivery services in massive numbers. So, what can restaurants do to hold onto sales? Or, better yet, grow those sales that are being driven around in the backseat of a Prius?

In some segments, delivered meals are hovering around 30% of top-line sales versus 10% just two years’ ago. The conversation is real and there are only semantic distinctions between sales within the brick-and-mortar and those that are on the road.

But why?

Looking for insight, go to the source. It’s not always having the answers, but merely asking the right questions.

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Shutterstock

What is it about delivery?

It's all about convenience, duh!

From skipping traffic to getting food from A-list restaurants but avoiding the crowds, leisure time is in the balance.

“I prefer the privacy of eating at home after a stressful day, knowing the bathroom is clean, and the amount of time [delivery] can save me,” says Samantha, a 23-year-old in Portland, OR, when asked about her decision to stay home.

“Delivery apps allow us to see all of our food options in one place without searching through Google maps or Yelp.” Solo diners chime in, as well. “I want to enjoy food from my favorite restaurants without having to leave my apartment. I’ll also [order] on work trips if I’m running low on time,” says Jacqueline, a 26-year-old recent transplant from Houston, TX.

Collective dining is still witnessed in the wild by the ubiquity of sharing plates and communal seating. Some have a better time than most can dream, so they stay home - together.

“[We] don’t have to worry about finding a place that everyone likes. We can all order from different places and it will come right to us. My one friend, she gets Chili’s delivered to her house!” says Abby, a 23-year-old in New Castle, DE.

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Shutterstock

Why not go to a restaurant for a meal?

The digital natives appreciate being unplugged from their surroundings. Interaction, though, is what happens behind a screen. So uninterrupted time matters. Abby jokes, “I don’t like servers constantly bothering me; if I want a refill or if I need something, I’ll let them know. Or I can just get it myself.”

Samantha, chimes in, “Crowds, wait times, not being asked for my ID respectfully - or being asked for it before I even order anything - is super annoying. Sometimes I feel like waiters and waitresses assume that we won't tip well because we are young and we receive poorer service than others.”

“I don’t like dining in [a restaurant] when I don’t want to deal with people or would rather [...] eat at my own place,” says Celine, a 25-year-old in Newark, Delaware.

The cost of dining on site has an expense that can be buffered by avoiding the restaurant. “Two pints of beer in Portland [Oregon] are equal to the cost of a six-pack. So for the cost of having drinks for two, you can buy beer for a week. When you order food in you also have your at-home entertainment, like Netflix or Hulu, which is also a big factor, and you drink whatever you want to,” says Samantha.

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Are the costs that ride along with the order an issue?

“Costs can be a problem depending on the restaurant, with many online sites such as Uber Eats, GrubHub, and Seamless; they add extra [fees] for delivery and have more out of pocket for a tip, like spending $25 on a $15 meal,” says 23-year-old Jamil.

Samantha adds, “Certain apps do not explicitly tell you the delivery fee price until you are about to click 'buy.' I think they do this so you are too decision fatigued to go back and pick something else, but we always do. Especially if it’s a place we have never tried before.”

Does the charge sway the decision? Apparently not. “I’m content with paying delivery costs, especially if it’s a restaurant I frequent,” says 26-year-old Fortuna.

While some delivery services put quite a pinch on operators to pay 30% of a sale, the customers placing the orders are an adaptable breed. “It’s still usually less than what you would tip a waiter. It’s still more convenient to stay in. I’d rather pay the delivery fee,” says Abby.

Is the trend going to last a thousand years into restaurant life? We only know as much as the tweezer-wielding cooks and the baked-Alaska chefs that redefine what’s hot and what’s not.

Until then, pack it to go and don’t forget to staple the dupe onto the environmentally friendly bag loaded with Brussels sprouts, fish tacos, and quinoa bowls. So, yes, Netflix and Chill is a real thing for millennials and it’s often paired with food delivery.

Packaging is a Key Differentiator to Off-Premise

The wrong packaging can make or break your diner’s experience. With a growing demand for takeout, delivery, and catering, restaurant operators should embrace an increase in packaging costs. Something so little as a higher quality material, or something innovative like an indicator to let consumers know their food may have been tampered with in transit is critical.

On this episode of The Takeout, Delivery, and Catering Show, Valerie and Erle speak with Jennifer Crawford, director of off-premise sales at Fazoli’s System Management, an Italian quick-service restaurant, and Ernie Davis, National Account Manager for Accurate Box, a box manufacturing plant that produces high graphics boxes. The group discusses what is quickly becoming a true differentiator for brands as more and more product is going the way of takeout, catering, and delivery.

Be sure to stay tuned for the next season, and if you have questions for Erle or Valerie, please reach out to us at producer@foodabletv.com!

SHOW NOTES

8:43 - The Challenges of Corrugating to Franchisees

11:39 - The Challenges In The Delivery Channel and Packaging Innovations

16:02 - Fountain Drinks and Sabotaged Delivery

24:14 - Off-Premise 2.0

28:19 - Marketing Tips for Packaging

34:15 - What is Accurate Box?

:50 - Packaging Is Critical to Off-premise

2:36 - Welcoming Ernie Davis, and Jennifer Crawford

2:57 - Fazoli’s Off-premise Over the Years

5:35 - Strategies Regarding Packaging Costs

7:15 - Packaging Continues the Consumer Experience


Synopsis by:

Rachel Brill

Rachel Brill

Social Producer


VIEW BIO

Your Takeout, Delivery, and Catering Questions Answered

The off-premise paradigm shift continues to force restaurant operators to change their operations or risk being left behind. Erle Dardick, a foodservice takeout, delivery, and catering expert and CEO and Founder of Monkey Group, and Valerie Killifer, editor of Catering Insights both know a thing or two about helping multi-unit restaurant executives create successful off-premise revenue channels and have been sharing their knowledge in The Takeout, Delivery, and Catering Show podcast. The idea is to provide you, the operator, with strategies and insights that will help you leverage your brand and make your off-premise initiatives smart, fast, and profitable. As a restaurant operator, if you have not listened to The Takeout, Delivery, and Catering Show, then you are missing out on the only podcast that is tackling the many questions and challenges in the off-premise space.

We are nearing the end of the first season, so in this episode, we decided to answer some of your questions. From food safety issues in the delivery channel to social media marketing, we cover the gambit of the most significant problems facing operators today.

Be sure to stay tuned for the next season, and if you have questions for Erle or Valerie, please reach out to us at producer@foodabletv.com!

SHOW NOTES

26:48 - Question 5: What will impact the future of your off-premise business more, automation or AI?

36:35 - Question 6: What is the biggest challenge to growing takeout and delivery sales?

39:06 - Question 7: How does takeout fit into off-premise and how can it best serve the customer?

50:27 - Question 8: Who are my biggest competitors in off-premise?

00:42 - Welcoming Paul Barron, CEO to the show.

01:19 - Question 1: When it comes to delivery, how do you protect your business from a food safety issue?

07:22 - Question 2: Is there a way to reduce the costs of these third-party services.

17:42 - Question 3: Do you trust Facebook or Linkedin as a real catering marketing solution

21:25 - Question 4: Should we incorporate a pick-up counter in our fine dining restaurant? Take out is
exceeding 11% of sales.


Food Delivery Discount Service Increases Sales During Restaurant Off-Peak Hours

Food Delivery Discount Service Increases Sales During Restaurant Off-Peak Hours

hough delivery has proven to be a huge market with the likes of UberEats and Grubhub snatching up restaurant dollars, it has also proven to be extremely expensive for operators and, consequently, for consumers.

According to Forbes, Restaurants could pay anywhere between 11% and 45% commission on each order if they sign up for a delivery service. And while restaurants admit that adding these services improve order numbers and total revenue, these rates are huge. And the delivery fees on the consumer side aren’t tiny either.

Two entrepreneurial brothers based in NYC noticed this issue while scouring for promo codes and coupons to lower their delivery order prices. Wondering, ‘why isn’t there some sort of food delivery happy hour’ Mohamed and Sidi Ahmed Merzouk set out to create this type of app.

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Restaurants Pinky’s Space & Cosa Buona Improve Packaging and Hold Times to Win Delivery Dollars

Restaurants Pinky’s Space & Cosa Buona Improve Packaging and Hold Times to Win Delivery Dollars
  • These restaurants are upping the ante when it comes to food delivery.

  • Colorful to-go boxes and menus cultivated for transit are methods to stand out in the food delivery industry.

Diners these days are looking for ease and convenience. They want food right from the oven to their door. With apps like GrubHub, UberEATS and Seamless delivery options are easy to find.

According to a study, the number of deliveries has risen ten percent. As a result of consumers craving convenience eating at home offers over eating out, restaurants are changing the way it does business.

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