The Future of Local Restaurants

In this “new normal” that we all currently find ourselves in, the foodservice and restaurant industry is getting hit particularly hard. Nearly half of independent restaurants are forecast to close, says Restaurants Canada, if revenue doesn’t increase over the next few months.

Restaurant owners, without precedent or preparation, are urgently trying to follow safety protocols in order to protect their patrons as well as their businesses from insolvency.

Now, with everything moving towards online, it’s no wonder that so many restaurant owners have questions about online ordering systems.

One thing is clear though: the world’s never going to be the same. And that’s okay.

With change comes opportunity and for businesses able to embrace change and remain agile and flexible despite the uncertainty, the future looks bright.

So how do local restaurants keep pace with new demands for contact-less convenience without overwhelming their staff, crew, or their pocketbooks?

This article aims to shed some light on this new reality and suggest some ideas to put restaurants squarely on the path to recovery.

The new reality

More than just a health crisis, COVID-19 has shown just how intertwined public health is with the economy. Here in Canada, we’ve been able to contain the virus well enough to begin allowing for reduced-capacity dining in much of the country.

While this does offer some hope for restaurants, the reality is, life is not going back to normal anytime soon, if ever again, so to survive and thrive in this new reality, it’s much better to be proactive rather than reactive when approaching decisions.

Restaurants need to realize that they are now running e-commerce businesses and they need to act accordingly.

Collin Wallace, former Head of Innovation at GrubHub

Before COVID-19 hit, restaurants did not need to rely on online ordering for their main source of revenue. To supplement their income and to meet the growing demand for online delivery, many restaurants partnered with 3rd-party delivery services like Skip the Dishes, DoorDash, and UberEats.

Unfortunately, and as restaurant owners already know, these services charge per-order commission-fees in the ballpark of 10-35%, and as one local restaurant owner attests, using these services as a means of delivery just isn’t sustainable.

Many restaurants have to pass those prices onto their customers just to make a profit, and to top it off, these services usually cause more headache than their worth because these gig-employees aren’t really connected to your business, so mistakes happen, things get overlooked, and the care just isn’t there.

Most consumers prefer to think and buy local and 70% of consumers say they would rather order directly from their local restaurant instead of ordering through a 3rd-party service like UberEats, so why not give them that option?

A commission-free online ordering software is an affordable, practical solution that can end up paying for itself after about 7-11 orders placed, the rest is pure profit going back into the business.

Online Ordering Systems

Online ordering has been growing steadily since the pandemic broke because it offers both the convenience and necessary safety to allow people to order food online.

Online order sales volume since the pandemicImage source

On the flip-side, new research shows that consumers are increasingly cutting back on dining out due to COVID-19.

Online ordering was already gaining popularity before the pandemic but now more than ever, it’s essential that restaurants implement online ordering as a way to stabilize operations and grow other streams of revenue.

To the younger generation, your business is virtually invisible if you’re not online. Beyond improving efficiency and reducing waste and errors, offering customers the convenience of online ordering, say psychologists, results in 20% larger order sizes overall.

Online ordering creates the bridge and allows restaurants to pivot to new online streams of revenue. More specifically, a good online ordering system allows restaurants to offer pickup and curbside pickup, contactless dine-in and table service, and can even take the place for coordinating and executing delivery in-house (albeit you have to supply the drivers!).

What’s more is that a good online ordering software comes with built-in customer analytics, marketing, and customer loyalty tools to help increase loyalty among existing customers and generate more engagement and return business from new ones.

The best businesses pay attention to or even obsess about customer data because they know it’s the key to driving value and increasing revenue.

Technology innovation is further strengthening our brand, improving our efficiency and in-store execution, increasing our profitability and most importantly, enabling us to deliver an elevated Starbucks experience to our customers, particularly to Millennials

Starbucks CEO Howard Schultz on how in-house online ordering has helped see a 12% increase in profits

All of this can be easily and intuitively managed from a centralized browser-based dashboard that can seamlessly integrate with existing POS systems.

For customers, they receive a branded mobile app experience – in the browser, without any download – that allows them access to a restaurant’s menu and provides for secure, PCI-compliant online payment. Paired with a scannable QR code that can be on the outside of the establishment, passers-by can quickly scan and instantly load the menu on their phone.

If you aren’t already online, now is the best time to get started.

Taking Delivery In-house

As we’ve already seen, third-party delivery services like DoorDash and Skip the Dishes have been shown to provide spotty service and ultimately don’t offer a sustainable solution for restaurants that want to deliver because of their high commission fees.

This lack of accountability and profit margins don’t just hurt the restaurant but can hurt customer expectations as well. However, delivery and the convenience that it provides is not going away.

Convenience is currently the most important factor influencing the food industry, say scientists. And there is nothing more convenient than a restaurant coming to you!

“Millennials want a good experience. They want efficiency and they want to order online. You have to adapt to them. Restaurants can’t be scared to use technology because it’s something that can only benefit them by saving time and eliminating errors.”

Kenji’s Ramen

So for restaurants that want to provide delivery, thankfully, now is the best time to do it and online ordering technology exists that can make supporting in-house delivery a snap.

For example, you can easily set up delivery zones, minimum order sizes, and delivery charges from the central dashboard and manage all your delivery orders in one place.

Some restaurants are re-positioning their furloughed waitstaff as delivery drivers as a creative way to save jobs and meet the demand.

What’s more is that studies show that customers who order online takeout or delivery are more likely to reorder within 60 days than walk-in customers so it’s more important now than ever, for restaurants to corner their delivery processes.

Pizza joints and Chinese restaurants have been doing it for years. Why can’t you?

Sanitation Protocols

Ever since COVID-19, safety is top of mind for restaurant-goers, especially as restaurants start to slowly re-open; 76% of respondents to a recent survey about restaurant sanitation procedures said cleanliness and food safety will matter to them more after COVID-19.

As a restaurant operator, it’s a good idea to demonstrate to your customers and people passing by that you are taking safety and sanitation precautions seriously; this silently communicates care and responsibility, not just for the restaurant’s wellbeing but for the wellbeing of its patrons.

Your takeout and delivery customers are your most loyal, so take visible steps to show them you care and by offering curbside pickup, contactless payment, leave delivery orders on the porch, minimize direct communication, and other safety best practices.

As we’re all figuring this out and people’s knowledge and perspective on safety, illness, and the novel coronavirus evolve, the fact of the matter is, customers are looking at eating out a lot differently these days.

These precautions may not always be here but for the time being, go the extra mile to show your patrons and staff that health and safety are top of mind, and your profits will reflect that.

Go Green

Today’s consumers are more value-driven, health-conscious, and connected as ever, with an abundance of choice, high expectations, and less time and attention to go around. 

That said, now is a great time to go green (if you haven’t already) and make a value-driven switch to environmentally-responsible packaging. It makes sense now, particularly, because restaurants can expect a steadier and greater need for takeout packaging in the years to come.

Importantly, this helps the environment but it also lends itself to the values and belief systems of an increasingly health-driven and environmentally-conscious younger generation, and sentiment can drive brand loyalty.

If you haven’t already, decide to make a switch to environmentally-friendly packaging and material that you can rely on and feel good about in the future. Your customers will thank you!

Conclusion

COVID-19 is going to be here with us for the foreseeable future. For restaurants to survive and thrive, they will need to adapt to new technologies like online ordering systems to reduce costs and bring popular processes like delivery, in-house.

Restaurants will also have to recognize that the mentality around eating-out has changed and with that, the behaviors and demands of customers are now more squarely focused on online ordering, and contactless takeout and delivery.

By focusing on providing value and engaging in sustainable and health-driven practices like proper safety protocols and environmentally-responsible packaging, restaurants will develop stronger loyalty and customer engagement that can see them through these uncertain times.

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