The pizza industry has proven both pandemic- and recession-proof, with sales in the U.S. alone topping $55 billion in 2022.
Widely considered one of the most convenient, affordable, and crowd-pleasing meal options, pizza is synonymous with delivery and a standalone category ripe for optimization. The emergence of specialty pizza shops like D.P. Dough and Blaze is creating more options for diners and restaurant operators, especially in local markets. At the same time, big players like Pizza Hut and Papa Johns seek to stay relevant and deliver the best customer experience that keeps diners coming back.
According to Square’s latest “Future of Restaurants” report, nearly 70% of customers prefer to order from a restaurant directly. In order to win market share in the competitive pizza category, it’s imperative that businesses have the right resources in place to nail the delivery experience in order to build brand loyalty, ensure customer satisfaction, and drive repeat purchases.
Combining delivery models to win market share
Demand for pizza isn’t going anywhere, which means outsourcing delivery, while convenient, will only become costlier in the long run. Maintaining an in-house delivery operation also comes with complications, especially as labor costs rise amid limited driver availability. “Hybrid” might be a word familiar to most in the context of cars or work schedules, but when applied to pizza delivery models, it can be a winning strategy, providing the best of both worlds.
While third-party services make delivery convenient for restaurant operators, sole reliance on outside partners can have downsides — namely lack of control over the brand experience and unpredictable reliability.
A brand’s social reputation takes a big hit when customers post about a poor third-party delivery experience, with ratings declining as much as 1.5 stars when an outside service is mentioned, per Service Management Group. There’s also the fact that since these delivery drivers are not your actual employees and are managing multiple orders from multiple restaurants, you have little to no control over delivery outcomes and customer experience. A smushed pie or unpleasant interaction between driver and customer could ultimately lead to lost future business.
Hybrid delivery models, on the other hand, allow pizza restaurant operators to launch a self-delivery program alongside their third-party partners. This means restaurants can self-select certain priority orders for self-delivery and outsource the rest to third-party services at peak times when they lack in-house drivers. By rewarding high-value, repeat customers with the fastest, most convenient deliveries, this model can boost customer loyalty and retention, while also providing restaurants with a hedge against the rising costs of outsourcing.
Here are three ways innovative hybrid delivery strategies can help pizza restaurant operators set themselves apart from competitors.
Balance costs and resources
Deciding whether to use your own drivers or outsource delivery can be drilled down to a science with the right technology.
You need to determine a delivery profitability ratio and stick to it to ensure you maintain margins on deliveries via third-party services. Self-delivery through a hybrid model helps restaurants avoid price increases from these services. Look to technologies that allow you to set automatic rules for which orders you want to self-deliver based on size, tips, and distance — such as only delivering up to five miles if the order is over $100 — and which ones to send to a delivery service partner.
A hybrid model can also help you maximize efficiency by allowing you to cross-train employees in different facets of your operations, such as in-house or a delivery network.
Ensure consistent, efficient delivery
For the average pizza restaurant, deciding whether to manually send an order to in-house or outsourced drivers takes an average of 10 minutes. It doesn’t seem like a long time, but the added minutes can be all it takes for a customer to become unhappy with the quality of their food and experience.
Hybrid delivery technologies allow you to streamline local delivery, taking locations and partners into account. In this way, it offers the ultimate flexibility and control. Algorithms help automatically dispatch orders to either in-house or outsourced drivers almost instantaneously.
This helps improve food quality — because who wants a pizza that’s been sitting in a car for an hour — and increase repeat orders when customers get their food on or ahead of schedule. You can also optimize delivery times by comparing pickup ETA between in-house and third-party drivers and then choose the fastest option from there.
Pizza Hut, for example, has deployed third-party delivery as a service models across about half of its locations. This increases delivery capacity, but comes with the challenge of manually deciding which orders to outsource. The company recently acquired technology firm DragonTail to help make this process more efficient.
Provide an ideal customer experience
Whether you’re a niche player or a franchisee of a big chain, personalized service tailored to the local market and its customers helps you stand out.
Consider using tracking links customized with your restaurant’s logo and promotional messages to maintain brand awareness on both in-house and third-party delivery orders. This lets you promote special deals that increase revenue and repeat orders by familiarizing customers with your business. Some solutions also offer reputation management optimization, encouraging customers who leave four- or five-star reviews to share their feedback on Google, increasing positive visibility. These important touchpoints ensure you remain in control of the customer experience, ultimately leading to increased customer satisfaction and a better brand reputation.
Want to offset the rising costs of delivery and maximize efficiencies while growing market share? Consider going hybrid to manage costs, streamline delivery, and keep customers happy.
As a business leader and entrepreneur with over ten years in the delivery space, Alex Vasilkin has a passion for transformative technology that fuels business success. Vasilkin is co-founder and CEO of Cartwheel, the leading technology provider powering the delivery operations of top restaurants like Portillo’s, P.F. Chang’s and Potbelly, where he is responsible for the strategic vision and day-to-day operations that drive Cartwheel’s impressive growth. Prior to founding Cartwheel, Vasilkin launched a restaurant with celebrity chef Govind Armstrong (quickly becoming the top delivery restaurant on GrubHub in LA) and founded delivery service Gourmet Runner (serving hundreds of restaurants in Los Angeles).