Restaurant Delivery Services – Bad for Business?

With the recent huge increase in the restaurant delivery market in Seattle (and elsewhere) it got me wondering what the effect would be on the restaurant’s business.   On one hand, you can certainly make an argument that any orders are incremental revenue for the restaurants that they can obtain with no operational overhead except the cost of food and prep.   However, I suspect that the restaurant might actually suffer in the long run.

With a restaurant delivery service the restaurant gives up many of the traditional differentiators that it could use to distinguish itself from competitors.   In a world where customers come into the restaurant, the restaurant needs to rely on a mix of quality, service, price, and convenience to get customers – and to keep them coming back.   But when an order comes in from a restaurant delivery service these attributes go out the window.

  • Quality – Food is perishable and most often tastes less good the longer it takes between being ready and being consumed. While the restaurant can still prepare a quality product, they now have a dependency on the delivery service to get it to the customer before it doesn’t taste as good.   Regardless of how speedy the delivery is, it is certain that 100% of the time a delivery service will introduce extra time into the equation.
  • Service – There is no service component at all from the restaurant when providing meals through a delivery service.
  • Price – While not all consumers are incredibly price sensitive, it is a factor for many. With added fees for delivery, any price-sensitive consumer is less served by a delivery model using a delivery service vs. a model where extra delivery fees are not added in.
  • Convenience – Here the delivery service certainly adds convenience to the end customer. However, the restaurant is on par with every other restaurant that the delivery service offers.  So while important to end customers, it is no longer a way that a restaurant can differentiate itself.

What does this leave the restaurant who hopes to create long term relationships (in the form of repeat business) when they use a delivery service?   They are left with the hope that their food, by the time it gets to the customer, is still tasting good – or at least better than the other restaurants the delivery service offers.   But as discussed above, this is somewhat out of their control.  Plus, what kind of standard is it to try to be “at least better than the other restaurants”?   I would argue that the above shows that the restaurant’s that do best with a restaurant deliver service are those with food that ages well and where the prices are low.   Consumers already don’t have high quality expectations when ordering from a delivery service – so not sucking too bad, and providing dishes at a reasonable/low price become the bar at which restaurants must compete in the delivery service model.

Don’t get me wrong.  If customers are using a restaurant delivery service, the need is probably there for the restaurant to have their menu in these services as well.   My point though is that the restaurants need to be also looking at ways to make sure that they drive business within their establishments.   When a customer comes in the door how can the restaurant best meet that customer’s need using the traditional ways in which a restaurant can compete?   How can they best meet the customer’s needs (Quality), at a high level of Service, at a reasonable Price, in a way that is Convenient for the customer?

We believe that Chompadoodle can help with at least three of these things.  We can make sure that a picky customer’s needs are met; that the customer feels like the restaurant is looking after their needs and therefore improving providing a high level of service; and finally giving these same customers a quick way to conveniently find what on the menu is tailored to them.

Jon Clemens
CEO, Chompadoodle

Why I started Chompadoodle

Chompadoodle was formed as a result of frustrating personal experience in trying to eat out.   I have three kids, one with Celiac Disease and two with Type 1 Diabetes.   Because of the Celiac Disease, my son cannot eat any gluten – and for him that really does mean he can’t have ANY gluten.  Crumbs matter.   Cross Contamination matters.   Without extreme diligence, we can count on him being sick.   At home we do things like have separate toasters, butter, peanut butter, condiments, etc.

Going out to eat with my kids is difficult, since we have to make sure there are options that are gluten free (due to the Celiac kid), and be able to understand how many carbs are being consumed for the diabetics.   For a long time, before the gluten-free craze really took off, we had a total universe of 5 local restaurants we could trust to eat at where my son would not get sick.   Couple that with the fact that my son with Celiac is a very picky eater, and our options contract very quickly.

When we eat out locally, at least we could rely on our personal knowledge of restaurants that would cater to our family’s needs.  But when we travelled, it was a nightmare.   If circumstances (or boredom with known choices) force us to try new places – another nightmare.

Our typical process when going out to a new place consisted of:

  1. Getting to at least a moderate level of consensus about what types of food was wanted by all 5 family members
  2. Finding local restaurants that offered that type of food
  3. Going to the website of those restaurants to see if they offered gluten free options. Its important to note that if the restaurant doesn’t explicitly say they support gluten free on its website or menu, we had very little confidence that they would have the level of diligence required
  4. Picking the restaurant
  5. Once there, asking the server about gluten free options
  6. Having to educate the server on what that means for us, and the level of diligence required
  7. Having the server having to go back to the kitchen to talk with the chef
  8. Ordering, getting our food for everyone but my son, whose dish always comes out late
  9. 50% of the time sending back the gluten free dish because its served obviously wrong (i.e. sending back the plate of eggs because they put toast on the side of the plate).
  10. Waiting to see if my son got sick afterward.

Yuck.   This process is not fun or easy for us.  For the restaurants we are essentially just a pain in the ass.

But… once we found a restaurant that worked, our universe of restaurants expanded and we’d end up going back again and again to that place.

Lately, because of all of the people asking for gluten free items, that universe has expanded somewhat (thankfully!).

But I recognized that this process was horrible for us and extremely inefficient for the restaurant.   Plus, while there are many (now millions) who want /need to eat gluten free, there are almost as many who need to eat dairy free or peanut free, or whatever.   Plus there are lots of others that just want to make sure the things they eat are good for them (GMO free, preservative free, organic, etc.)

So I created Chompadoodle.   I envisioned it being a tool for restaurants to better communicate with their customers.   The basic premise:   provide a site where customers could find places that map to their specific dietary constraints before they even step foot in the restaurant, and provide a way for restaurants to better communicate with customers in their restaurants about how their dishes do, or can, conform to specific dietary requests.   Some things that are critical to make this work:

  • Get menus online, labeled against a wide variety of dietary preferences
  • Get the restaurants’ chef or manager to validate that their menu is correctly labeled
  • Make it super simple for customers to get the information they need about what they are going to eat
  • Make the process drop dead simple for the restaurants to use Chompadoodle as a tool they rely on to increase customer satisfaction and to help ensure repeat business.

We are finding that customers and restaurants have really taken to this idea.  There is a strong need by customers to get better information on the food they are going to eat.   Similarly, restaurants are finding a lot of value in having a consistent and efficient way to communicate with these customers.  Thanks for your support!

Jon Clemens