Article

Ramping Up Off-Premises Sales

As gyms have closed, restaurant industry "thought leaders"have turned to prognosticating as a popular exercise these days. And, dang it, we don't have a crystal ball. That said, we feel safe in making the following predictions:

While it is not the proverbial magic bullet for every concept, few operators can afford to ignore it.

First, government-backed funding is going to dry up at some point. Second, independent operators will always have to fight for extra points of margin. And, finally, demand for delivery and takeout is likely to remain constant going forward, based on our research, regardless of the course of this pandemic.

If you are reading this article, it is likely you have adapted your business model to accommodate increased delivery and takeout sales. A number of independent operators claim these were the saving grace in 2020, keeping them in business as government-mandated shutdowns and consumer fear of gathering took their toll on in-house dining. While it is not the proverbial magic bullet for every concept, few operators can afford to ignore it.

Consultant TJ Schier, of OffPremisesDomination.com, is exploring a novel "hybrid" model he hopes will solve some of the problems that operators encounter with third-party delivery.

In this article, restaurant consultant TJ Schier of OffPremisesDomination.com discusses what is required for independent operators to go from nearly no off-premises to 25% or more of sales. Schier brings to the table 35 years' restaurant operations experience including multiple franchised units.

Integrating the Brand

Not every concept can easily shift to delivery and takeout, at least, not to a meaningful level, says Schier. "Clearly, quick-service and fast-casual concepts are best-suited for off-premises dining services," he says, noting this style of service is most likely already part of their business model. "But it's harder to translate the guest experience of an upscale concept to delivery and takeout," he adds. "These concepts are popular for special occasions and they put a lot of time and effort into creating a special dine-in experience," he says.

For any concept, it is important to integrate the on-premises brand to the off-premises message. For one, with increased promotion of off-premises dining, a concept doesn't want to lose the value of its brand, which in some cases, has taken years to build in the community. Operators need to understand delivery and takeout are not just about convenient quick food. Casual concepts can and do replicate their on-premises experience to off-premises dining. "Family-style" restaurants have created meal packages for four to six diners. Sports bar concepts can create "game day" specials timed with sporting events, says Schier.

Essential Technology

While some guests will phone in their orders, most delivery and takeout business is coming via online order- ing. Operators who want to get in the game need to have an app. The good news is there are plenty of vendors to provide this technology. What is trickier is finding an online ordering app that integrates with your point-of-sale (POS) platform, says Schier, adding, if it is any consolation, this is a frustration for many operators, independents and chains.

Some online order app vendors have done a good job for the independent offering robust POS integration and other valuable tools, including email marketing and loyalty program capabilities. Schier notes Lunchbox (lunchbox.io) as a good solution for independents. Clover and Square are also good solutions for independents, although, says Schier, you are required to use their credit card processing.

Schier recommends benchmarking online ordering processes from local competitors to see what you like and don't like from the guest's perspective. One of the benefits of working with a consultant like Schier is to avoid overlooking capabilities you will want, but not discover on your own until you've committed to a solution. "We help you figure out what you want to be the perfect off-premises experience."

What More Can We Say About TPD?

Independent operators are still facing high fees and some loss of control over service once the order leaves the restaurant. Nevertheless, operators need to offer third-party delivery (TPD) to be competitive. "You have to be available through their favorite third-party delivery app. You need to be on those platforms," says Schier. "You can't change consumer behavior in an era of Amazon Prime.

That said, Schier is exploring a novel "hybrid" model he hopes will solve some of the problems that operators encounter with TPD. By hybrid, he means a combination of self-delivery (such as Jimmy John's does) and the rest TPD.

For Schier, the key to making self-delivery work is to limit the hours and locations. He has developed relationships with nearby hotels and hospitals, where there is concentrated demand for food. He charges a nominal $2.95 delivery fee, and offers the service only several hours a day, during times of peak demand. For other delivery, he uses TPD services.

Schier uses Google analytics tools to find out who is searching for information on his restaurant, and from where they are seeking directions to his business. "I know where they are coming from," says Schier, explaining this can help him determine where he might offer self-delivery.

As always, the devil is in the details; more specifically, in this case, the financial details. This includes analyzing the cost of overhead, such as special liability insurance if required, and additional labor. Because of the system Schier created, including limited locations and hours, he says he has been able to keep these costs low.

New Normal Marketing

While TPD has challenges, it can create opportunity. "I would sign up my restaurant with all the TPD services," he says. "And with each order, I would put something in the bag to get them to order from me directly." Schier suggests a $5 discount as an incentive, and even a message that explains to the guest takeout saves independent operators money and helps them have more control of the service. This is the time to appeal to consumers' support for small business.

The goal is to convert your customers from TPD to take-out. "Use SMS text and email lists to communicate with your guests. Promote the fact you are an independent operator who needs their support," says Schier.

He also is a fan of restaurants that support the community in return through donations, such as food for front-line workers. This promotes your brand in a positive manner and encourages others to promote you via their social media feeds.

On-premises Dining is Not Dead

Schier believes there is still a market for on-premises dining, even at his fast-casual concept with a drive-thru. That said, he is bullish on off-premises because it is critical for many concepts to remain profitable, particularly in the wake of the pandemic. In fact, he offers free 15-minute consultations to operators who want to take advantage of this shift.

KEEP LEARNING...

WEBINAR: A Practical Blueprint for Takeout Success: How to Compete with the Chains & Capture More of the To-Go Business in Your Market

Frustrated with a lack of off-premises results? Tired of hearing about big brands' sales success in off-premises? Struggling with where to start?