QSR INSIGHTS

How QSR Operators Can Leverage Delivery to Drive Sales Growth in 2022

OneDataSource Blog Post Brand Mark

The OneDataSource Editorial Team

Delivery is not a new concept to quick-service operators. Some were already making changes pre-pandemic to be more delivery-friendly. When the pandemic hit, it became a clear source of survival. The reality was that dine-in shut down, which meant finding new ways, or doubling down on existing methods, to get food into the hands of customers. Those that had already focused on delivery found it easier to lean in. Those that had not found they had to pivot quickly.
QSR Delivery Options in 2022

Customers of QSR brands have come to love the convenience of delivery.

We explore how stores can use delivery to drive same-store sales growth in 2022.

In the US, delivery sales doubled to more than 15 percent in 2020. Though, the question is what delivery will look like in the future. The good news is that delivery is expected to grow, and quick-service restaurants are in the best position to take advantage of this. Solid growth is expected to resume in 2022/2023, lifting delivery sales to 40 to 80 percent above 2019 levels in most markets.7

Convenience is key. Consumers were already showing interest in greater convenience leading up to 2020. Now that delivery availability has grown and overall delivery quality has improved, interest is here to stay. In fact, according to one survey, nearly 80 percent of current delivery customers plan to continue to order at the same frequency they did in the first half of 2021. The number one reason given was overall convenience.8

We know expanded delivery is here to stay.

But what does that mean for how quick-service operators should think about it going forward? What changes are needed?

To make delivery work for operators and businesses as well as meet consumer expectations, there are a few key considerations. First, there must be a focus on operational processes, including a willingness to make optimal menu decisions. There’s also a significant decision on how to partner with third-party platforms.

The focus is on portability and speed.

Portability, or how well the order moves to the guest, applies as much to guest experience off-premises as it does to the dining room. No one wants to open their order and find something missing or, worse – question its cleanliness. For their part, restaurants have introduced multiple safety measures to combat this notion. They’ve also made packaging changes to increase how well food is transported. Quality has always been important, but as delivery takes up more share of the foodservice market, it requires particular focus.

At the same time, there’s also speed. A trends report from DoorDash highlights that 7 out of 10 customers choose an ordering method based on how quickly it will arrive.9 Exactly how long is too long? Respondents told Datassential they expected to wait 33 minutes or less. Forty-seven minutes or more, and they start to get annoyed. Speed is essential to get it right.10

Optimal menu changes are necessary.

As a result of the speed and portability requirements, many operators have taken a fresh look at their menus.

Specifically, delivery will require menu simplification. Assembly speed is vital. Those dishes that have a greater number of ingredients or longer preparation time won’t cut it. Some chains have already made this adjustment.

For example, Outback released its pared-down, steak-centric menu in August 2021. Early in the pandemic, McDonald’s decided to cut items and remove the All-Day Breakfast, to streamline its menu to make it easier to service customers and operate with greater speed.

Rather than make cuts, some QSRs are opting for a different approach. In the National Restaurant Association’s State of the Industry dive for 2021, 22 percent of quick-service operators said they’ve tacked on menu items explicitly tailored for takeout and delivery.11

Whatever the case, businesses that want operational and customer success when it comes to delivery will need to look closely at their menu.

Nearly 80% of current delivery customers plan to continue to order at the same frequency they did in the first half of 2021.

The number one reason: convenience.

The decision on how (and whether) to partner with third-party food delivery platforms.

When it comes to third-party delivery platforms and restaurant commission rates, there is tension.

Delivery platforms typically charge restaurants about 15 to 30 percent of the price of a meal. Further, McKinsey notes that “during the pandemic, several local and state governments in the United States have imposed caps on these commissions, and some places are considering making these caps permanent. In areas where they are eventually lifted, traditional restaurants will once again feel the commission squeeze—particularly given that third-party platforms themselves are now larger and more powerful than they were before the pandemic.”12

There’s also the issue of wanting to go straight to the source. DoorDash’s June 2021 study shows that 43 percent of patrons prefer in-house delivery services. Additionally, thirty-nine percent say they think direct channels are easier to use, and 30 percent like the familiarity of ordering directly from the restaurant’s app or site.9

Some brands like Dominos have perfected in-house delivery services. Others rely on third-party platforms. Of course, there are pros and cons to both. Regardless, this is an area that may see more brands deciding to control how their product reaches customers.

Faced with a global pandemic, rising food costs, higher labor costs alongside labor shortages, and stress of the supply chain, QSR operators found ways to pivot.

In our 5 QSR Trends to Watch in 2022 Report, we explore how you can navigate those trends to deliver sales growth and improve your bottom line next year.

Get the report today!

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