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Monday, July 25, 2011

Door Delivery - Why every new restaurant gets it wrong?


Almost every new restaurant that opens, typically announces that they offer "Free Door Delivery" within a few weeks of operations. Invariably, they make a mess of it, primarily because of extensive delays in fulfilling the orders. "Door Delivery" will undoubtedly feature as one of the most messed up initiatives a new restaurant business undertakes - the complexity is grossly under-estimated, possibly due to the seemingly simple nature of the task. Here is a high level overview of the key issues.

1) The 30-40 Minute Issue: Some quick research indicated that customers who order food to be delivered to their homes/offices, call in about 30-40 minutes to check the status of their order. Invariably, they tell you that they placed the order about an hour earlier. Even if you have the call data, there is no way that you can really tell the customer that it has only been 30 minutes since he/she placed the order without pissing them off. This is despite you telling the customer in the first place that the order will take 45-60 minutes to be delivered. So if you really believe that "Door Delivery" is going to be a critical part of your business, you better be prepared/set-up operationally to actually deliver the order to the customers in about 30-40 minutes.

2) The Order Concentration Issue: Most restaurants will tell you that their delivery orders are very concentrated into a 45-60 minute window - i.e. lunch orders are placed between 12:45 & 1:30 and dinner orders between 8:00 & 9:00 PM. This means that you need to prepare the food, package it and deliver all those orders around the same time - difficult to execute (especially the delivery piece). So if your business forecast is for fulfilling 20 orders per hour during dinner (a 3 hour window), you need to be operationally set-up to fulfill 50-60 orders (as all your orders will come in the same one hour). This means you need a lot more delivery guys than your total business volumes can justify.

3) In-Restaurant vs Delivery Orders - Kitchen Prioritization Issue: Invariably, your kitchen staff will struggle in fulfilling all the orders they receive. So when you have 3-4 waiters in the kitchen shouting for their orders to be completed, the delivery orders will take a back-seat - kind of like a "Out of Sight, Out of Mind" issue. Also, you cannot tell a customer in the restaurant why an order takes 60 minutes to be served. While for a delivery customer, he can either shout at the delivery guy or on the phone - definitely easier to manage than a customer who is physically present in the restaurant. Unfortunately, the restaurant also gets busy at the same time that the delivery orders are placed.

I can keep writing about "Door Delivery" issues and how to plan for this - it will consume several pages. So I will try and break the article in several smaller future postings to make it easier to folks to read and understand.

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