Anyone knows that delivery service is an interesting aspect of the current trends in restaurant industry. Most brands collaborate with third-party delivery service to get the orders right to the customers. As a result, online food ordering becomes increasingly popular, since the consumers do not need to go out for foods anymore. Accordingly, UBS predicts that this trend will keep increasing up to 2030. Similarly, analysts at Morgan Stanley are convinced that online food ordering could make up of up to 40% of the restaurant sale.
Delivery System in Restaurant Industry: Panera
However, Panera made a different decision. It handled its own delivery service, instead of partnering with a third party. It introduced its own delivery service in 2015. At that time, similar service was available only for few restaurant chains like pizza. In other words, such service was still relatively rare in restaurant industry.
Actually, Panera tested several models of delivery service before arriving at a decision to use its own delivery fleet. The restaurant had several reasons for this. They include:
- Ability to meet the customers’ expectation in a faster way
- Ability to control its own delivery system directly
- Ability to get feedback from the customer experiences and to take corrective measures, when necessary
- Ability to drive more volumes, thus yielding more profits
- Being more economical than paying third-party fees
Panera’s decision to use its own delivery system is a success. Several factors contribute to its success. They include its massive 2.0 investment. This business is based upon e-commerce platform that makes it easy to handle online orders and delivery. The company can track the customer purchase and history. They can identify customers with repeated orders.
Reasons behind Panera’s Success in Restaurant Industry
In addition to massive 2.0 investments and e-commerce platform, Panera actually has several advantages that contribute to its success. The company estimates a sale of $5,000 per week for each location. This is attributable to the system it uses to track the customers’ engagement. The return of using its own delivery system is very clear, thanks to the visibility. This is certainly not available when it uses a third-party company.
Now, Panera achieves huge growth in its business. In November 2018, it expended the delivery service to breakfast. This shows that the company is increasingly confident with its business system to give the consumers what they need. Panera is creative in seeing any chances in the rapidly evolving marketplace.
Of course, running a restaurant with its own delivery system is not free of challenges. No one can predict how delivery space will play out in the future. The customer needs and expectations are rapidly evolving. In addition, running a delivery fleet can be additional tasks for the company management. They have to manage the drivers and the fleets.
Managing the delivery fleet is certainly different from running a restaurant. Panera have to develop a national-scale recruiting capability, develop a platform to facilitate both the consumers and the drivers, build a track system to increase visibility of consumers’ engagement, and develop new operating models for the restaurant.