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Restaurants sidestep delivery fees with enhanced carryout programs

Delivery has been getting a lot of hype lately, but there’s another opportunity for growth that restaurant operators should not overlook, according to officials at market research firm The NPD Group.

“By far, over the last five years, the greatest source of growth [in the industry] is digitally ordered carryout,” said David Portalatin, vice president and foodservice industry advisor at Port Washington, N.Y.-based NPD.

Carryout orders placed digitally are up 279% in the last five years, NPD found. And the digital aspect is essential for off-premise growth. In contrast, non-digitally ordered carryout and non-digital delivery are not growing, NPD found.

“The thing about [digital] delivery is that there is a cost, which is right now either being absorbed by smaller margins for operators, third-party delivery firms that aren’t yet making money, or by the consumer in the form of delivery fees,” Portalatin said. “At some point, to be sustainable, that has to go away.”

In the meantime, online carryout orders give consumers a convenient, friction-less ordering experience without the added fees — all they have to do is pick it up.

“It’s the digital element that is the key driver,” said Portalatin.We can apply that to all aspect of the restaurant experience, whether it’s delivery, carryout or even on-premise.”

For operators to make this change, though, there are a lot of things to think through, Portalatin noted. For example, when adding incremental capacity operators need to think through how to execute that in a way that serves all consumers well, be they on-premise, taking out or getting delivery.

Among the brands testing strategies to better manage increased capacity of digital carryout and delivery orders are Conshohocken, Pa.-based Saladworks and Winston-Salem, N.C.-based East Coast Wings and Grill. Here’s how they’re doing it.

Saladworks: Rapid pickup is “Good to Go”

Takeout orders at Saladworks, once inefficient and varied by location, now are greatly improved thanks to redesigned stores with designated rapid pickup stations, part of a program the chain calls “Good to Go.”

“Carry out orders that don’t have a designated space end up everywhere,” said Jena Henderson, Saladworks vice president of growth.

The addition of simple shelves situated out of the way of regular service, often at the end of the line allowing staff to stock the orders from behind, has enabled the growing number of takeout guests and third-party delivery carriers to grab and go with limited human interaction.

But systematizing digital orders so the stores could manage it all wasn’t easy. Saladworks addressed the challenge with a “rotational service flow” model in which a staff person handles each order — whether digital or in-person — from start to finish down the line, as opposed to several staffers building part of each order.

saladworks-kiosk_0.gif“Rotational service flow has allowed us to scale up as businesses need,” said Henderson.

Just five years ago 60% to 70% of Saladworks’ business was eat-in, now that has flipped, Henderson said, with 60% to 70% of business now made up of carryout and delivery.

The nearly 100-unit chain is also meeting consumers’ convenience demand with non-traditional locations such as full-menu locations inside the JP MorganChase office building in Columbus, Ohio, and inside two Philadelphia grocery stores.

“People have had placemaking and consuming food in a million different places,” said Henderson. “We’re going to make ourselves in those places.”

East Coast Wings + Grill: Testing takeout stations

Similarly, East Coast Wings + Grill, which has nearly 40 locations, is experimenting with adding dedicated space to carryout orders in two locations.

The 2018 remodel of the Kernersville, N.C., store included a designated takeout area with a separate entry door and staff and reserved parking spaces.

IMG_2213.jpegFollowing the remodel, the Kernersville store experienced double-digit sale increases and an increase in the average ticket prices. Digital orders have grown from 10 percent of takeout business to 16 percent this July. The success has prompted the store’s owner-operator Angela Townsend to move up the remodel of her Greensboro, N.C., location to this month, up from 2020.

Townsend attributes part of the success to creating a “Takeout Specialist” position, staff members who are paid above minimum wage (plus tips) and take special training related to their position.  

“In addition to better service for our customers, creating this position provides a career path within the restaurant for those who want to move up from the host position,” she said.

Other contributors to success include having a pickup confirmation sheet to use with credit card chargebacks and training.

“Mistakes at takeout are hard to forgive” Townsend said. “Train staff to use packing checklists and have a regimented checkout process.”

When customers can expect to see similar takeout stations in their nearby East Coast Wings + Grill remains to be seen.

“We are happy to see the results so far that may ultimately lead to incorporating dedicated space for carryout/delivery as the sales continue to grow,” said a spokesperson for the chain. “As consumer purchase behavior changes, we have worked hard to make sure that we are available to our guests through whatever channel they choose for their dining experience.”

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