The health emergency has led to new patterns of food consumption outside the home, whose steady increase has marked the last few years of Italian catering. In 2020, this segment of the national economy will generate revenues of EUR 50 billion, compared to 85 in 2019. In the face of this situation, home delivery of food, via platforms or proprietary apps, is an obligatory step in the digital evolution of restaurants.
For Italian restaurants, the growth in food consumption outside the home has clearly characterized the sector in the last years. A few days ago, however, in the Global Food Service Forum webinar, the 2020 forecast for the OOH (Out-of-Home) market indicated an expenditure of EUR 50 billion, compared to 85 in 2019. A not-so-surprising fall of 41%, as widely expected given the negative effects of the pandemic.
THE ITALIAN MARKET
On lower values, but very indicative of the trend, the B2C E-commerce Observatory of the Polytechnic of Milan quantifies the increase in food delivery demand at a significant + 46% compared to last year. An expenditure of EUR 863 million in 2020, compared to 592 in 2019.
Again, no surprise. The number of orders and towns covered by the home delivery service are on the rise on any online platform −and not just in recent times. In fact, according to the latest edition of Just Eat’s Home Food map in Italy, in the months of the lockdown the market saw a greater territorial coverage, touching all municipalities with more than 50,000 inhabitants and 66% of Italians (about 40 million people).
KEEPING THE HEAD OUT OF THE SAND
For restaurants, the hope of a return to traditional business is largely illusory. While waiting for better times, and without any certainty about future recovery outcomes, there is the need to adapt and respond to changing consumer behaviour, beyond any lockdown that may comes, and decide accordingly. Doesn’t the customer go to the restaurant? Then the restaurant must go to his home.
Online ordering and home delivery of food, via platforms or proprietary apps, is only another aspect of the necessary digital evolution where, also in this case, a step back is not an option.
If, within the restaurant, the customer’s demand for digital services at the table and at the checkout is increasingly growing, from the menu to the order and payment, the ability to deliver food at home is only a further (mandatory) step in addition to the customization of the service and customer loyalty. Even more so with the obligation of early closure. For restaurants, dinner represents on average two-thirds of their revenues, and even more for top-end or starred restaurants.
THE OTHER COMPETITOR
There is not only the pandemic to deal with. The success of companies such as Deliveroo, JustEat, Glovo and Uber Eats has spread a new competing model to traditional restaurants. If these, at a time when the propensity for change is greater, reorganize processes and improve existing spaces to meet the new demand, others are entrusting to external suppliers (dark kitchens- ghost kitchens or cloud kitchens) the task of preparing menus and deliver them to the costumer’s home.
Boosted by food delivery, the number of these shared facilities is growing, promoting the rapid innovation and establishment of a new digitalized catering model, to which the large-scale distribution sector also looks with interest. Already two years ago, according to a UBS study (with a very indicative title “Is the kitchen dead?”), the global food delivery business, which today is worth 136 billion dollars*, will grow to 365 billion by 2030. By 2024, it will also involve approximately a billion customers worldwide. The same study finds that most of the meals currently cooked at home will be ordered online and prepared in dark kitchens.
The restaurant itself can become a digital showcase on an unlimited number of smartphones, gaining visibility and orders. If the showcase is a harmonious part of a digitalized workflow, the level of competitiveness of the restaurants focusing on this could be a decisive factor.
But it is not enough to say “I’ll bring your food home”. To really compete, there is the need to make the widest and most effective use of information, the true wealth of food delivery companies. This rule also applies to restaurants, which need to know the customers’ profiles and preferences. The implementation of an appropriate technological system for collecting and organizing this information allows us to understand what is most in demand in a given period, what is ordered more in the various time bands and how preferences change during weekends and holidays, or even depending on weather conditions.
Restaurants are not take-away food outlets and cannot approach home deliveries with an identity other than their own, as that would be their end. There is the need to stand out with a unique story and produce valuable content. Digital communication − via social media, website or app − is becoming essentialalso for catering, and its purpose is to strengthen the identity, maintain and improve presence and reputation, increase orders. This is where promotions and customer loyalty come into the picture.
RESTAURANTS GO THE CUSTOMER’S HOME
There are different ways, with different costs and revenues, to reach the customer at home. One thing is the mere presence of the restaurant on the app and the website and making the delivery itself, and another is the delivery managed by external couriers. Another, again, is the ordering on the app and on-site collection.
A number of variables affect costs and revenues, such as the rearrangement of the kitchen for this purpose, a suitable menu, food packaging and service conditions. In addition, those who decide to organize themselves independently could use the staff already present and temporarily idle due to lesser activity in the restaurant room.
At this particular time, large food delivery providers offer increasingly attractive service conditions, with lower or even zero commissions in the first period of affiliation. The battle fought in the sector is getting fierce and it is possible to find interesting opportunities for striking the right balance between costs and revenues. Of course, it also depends on the importance of the brand: if the restaurant has a good reputation, it can help achieve better results at the negotiating table.
Catering, however, requires a digital reorganization of the work system, which starts from the kitchen and continues in the restaurant room, at the checkout and on the street. Technology does not simply have to fulfil a function, in this case, ensuring the proper delivery of food. Instead, it must enable a higher and more comprehensive view of the commercial relationship, which purpose, however, is always the same: to give the customer every good possible reason for confirming his loyalty. Whether sitting in the restaurant room or at home, it should not make a difference.