Welcome to the Spring issue of Phil’s Field Notes (PFN).
Greetings from Boulder,
It looks like the temps will stay above freezing this week in Colorado. For me, that means excellent running and biking weather. I hope things are warming up a bit for you too.
We’re feeling cautiously optimistic about things warming up for the restaurant industry as well – especially for dining in and to-go orders. However, we don’t expect delivery to lose as much steam as you might think.
Restaurant delivery, apps, and third-party services were among the industries that defied the negative economic trends of 2020. The industry has produced some dramatic data this past year, some of which we’ll discuss in this month’s PFN.
The bottom line: we might just be turning the corner to a brighter outlook. So let’s dive into this month’s stuff.
Why I’m generally optimistic about the industry
A common theme regarding 2020 is that while some industries suffered greatly, others were catapulted a decade forward in technology and business advancement. Restaurant delivery was certainly among the latter. For example, DoorDash was one of the biggest IPO’s in 2020.
According to Second Measure, meal delivery services increased by 119% year over year for February. That’s massive!
We all have big questions in mind.
For example, how much of this momentum will continue once the weather warms up and people are no longer stuck at home?
Will business return to pre-COVID levels or continue to increase?
If there’s one lesson we’ve learned, it’s that predicting the future is dicey. But there are some positives, like this one: According to Technomic’s 2020 Delivery and Takeout Consumer Trend Report, 38% of consumers say they’ll order more takeout and delivery than they did before the pandemic.
My sense is that demand will level out somewhere in between where we were in 2019 and the spike of 2020. The great news is because of the huge disruption and the fact that it required us to adapt, we’ve built a solid foundation for what’s ahead.
It’s also important to remember that once people get used to a convenience, they are very reluctant to have it taken from them. Folks are more comfortable with food delivery than they’ve ever been. Studies have shown that Millennials and Gen Z’s are the most eager adopters.
As shared in this report on consumer spending from JP Morgan Chase, there are also positive indicators on the economic front. Household savings nearly doubled in 2020, and when you combine that with “pent up demand,” the implications are that 2021 could mean good news for hospitality and restaurants.
Restaurant DIY: Deliver It Yourself
As Market Watch points out, food delivery apps are a viable solution for many small restaurant owners who aren’t able to fill their dining rooms. Especially for those who can’t afford the hefty delivery fees of the big guys like DoorDash and Grubhub.
Self-delivery may also be a necessity in those states where the restaurant seating capacity is limited. But it might be a strategy worth considering even if there are no mandates.
The good news is that in addition to saving money, delivery software can relieve you of much of the cognitive load involved in delivering your own orders. If you’re using spreadsheets and calendars, and text messages to manage the process, you’ll be surprised at how much easier and efficient you will become with software.
Run the numbers. If you can invest in a software package for $100 a month, and you’re spending more than that in hourly wages, it’s a no-brainer. The efficiency trade-off alone is worth it.
But consider the less tangible side of the equation too. How much is your time worth?
If the volume of deliveries increases, you’ll be glad you made the change sooner rather than later.
As for our RDS friends
There are distinct differences in the delivery experience when comparing the big players like Grubhub or DoorDash with smaller third-party services like yours. And, you want to make those distinctions stand out even more, no?
The most obvious difference is the high delivery fees. But there are other ways to differentiate yourself apart from being a lower-cost alternative.
Your theme for 2021 should be to build relationships. Restaurant managers and owners have many decisions to weigh right now. They need partnerships with folks they can trust. For example, some “DIY” restaurant owners might be considering a switch to the RDS model. You can be a trusted advisor.
Help them think it through by making them aware of what’s involved. This is your domain of expertise, and it’s valuable. But resist the urge to stack all the factors in your favor. Remember, those who aren’t ready to outsource right now are likely to remember you and your honesty later when they are ready.
Also, consider doing some good old-fashioned cold calling. If you’re out of practice, this is the time to polish up. An excellent book on the topic is “The Introvert’s Edge” by Matthew Pollard.
Another factor to consider in 2021: YOU!
One area where pent-up demand appears strongest is vacationing. Not overly surprising, right?
I don’t know about you, but for me, this feels like a good time to reflect on the past year. Take a breath. And there’s no better way to do that than get away from the hustle-bustle and defrag. Journal. Take long walks. Enjoy family. Do nothing. Maybe even get a little bored (I’ll have trouble with that last one).
We all want to make the most of the positive momentum in the economy and the industry right now, but sometimes the best way to do that is to reset. Even if it’s just a long weekend or stealing away for a few days on a road trip.
Don’t forget: you are the primary agent in your future success. A little self-care now and then isn’t just enjoyable; it’s wise.
What are your thoughts and/or tentative predictions about the year ahead?
We’d love to know!