Published on: April 4, 2019
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Hi, Kevin Coupe here and this is FaceTime with the Content Guy.
I’m coming to you this week from the Food on Demand conference in Chicago, a show I’ve never attended before, but thought worth visiting because the restaurant business and the technology sector - which are the show’s primary constituencies - are facing many of the same issues as the supermarket industry. The most pressing - how to handle consumer demand for delivery, and all that this demand entails.
We heard some success stories and some skepticism, but what stood out to me is the fact that, unlike supermarket chains, restaurants often work with multiple delivery services to satisfy consumer demand; I’d never really thought about this before, but one restaurant or restaurant chain might be doing business with GrubHub, DoorDash, UberEats and maybe even Amazon.
This is unlike the supermarket industry, where if companies want to outsource their e-commerce and delivery functions they often will choose one vendor - like Instacart … and you all know how I feel about Instacart’s potential for siphoning off customers and diluting a store’s brand identity and equity.
But some of the restaurant folks whom I heard speak seem to be very much aware of the fact that they are putting their brands at risk by dealing with so many vendors; there is a worry - justified, I think - that they can become a me-too offering that is completely undifferentiated within a digital environment.
One executive from GrubHub seemed to be very much aware of this concern when he assured the audience that he has absolutely, positively no intention or desire to open his own restaurant chain under the GrubHub banner; he emphasized that he knows logistics, not the restaurant business, and said he wants to be in the business of serving restaurant brands. But he did concede that GrubHub might well get into the so-called ghost kitchen business, creating a commissary facility where multiple restaurants could fulfill digital orders away in an environment more specifically engineered for this purpose.
Differentiation also comes where you can get it. A fellow from a delivery business called BiteSquad pointed out that while his company has a tiny percentage of the delivery marketplace, it is top-rated (at least in one survey) for the cleanliness of its trucks. But what was even more interesting about the claim is what he attributed it to, which was that BiteSquad pays its drivers by the hour, not by the delivery, as one way of getting them invested in the culture and going above and beyond to keep the trucks clean.
There’s a lesson in there somewhere for every marketer, I think - that saving money with one policy can hurt your broader bottom line in ways that you should be able to anticipate.
The only person I heard with whom I completely disagreed was a fellow sitting at our lunch table who is a franchisee operating a number of formats such as Einstein’s Bagels and Moe’s. He was a little cranky about the whole Food on Demand concept, and said it would never really matter to his business, and certainly would never amount to as much as 50 percent of his stores’ volume. (He ate quickly and left before the lunch speakers. Go figure.)
He may be right or may be wrong … but I certainly think that it makes sense to plan for what can happen, not what you think will happen. Planning for the latter, I think, limits your options if you are wrong.
I also think that I can make a case that at some level, retailers - including restaurants - should want delivery to go to 50 percent. If you have a strong enough brand that people want your products in their home, and go through the process of placing those orders, I would think it indicates a certain level of loyalty. You can’t take it for granted or be complacent about it, but it is an important step in creating a sustained relationship with the consumer. And that strikes me as worth nurturing.
That’s what’s on my mind, reporting from the annual Food on Demand show. As always, I want to hear what is on your mind.
- KC's View: