Road-tested strategies for last-mile success.

For many foodservice operators, the focus has now shifted from delivery as short-term survival tactic to evolving, long-term growth strategy. In theory, it sounds easy enough — easier, in some ways, than actually serving in-house guests. But in practice, achieving last-mile success is a complicated endeavor that requires precise, flow-focused analyses; smart menu engineering; operational flexibility; and increasingly integrated technologies. In a broader sense, it also requires a willingness to embrace next-gen notions of brand experience and customer service — and a commitment to ensuring those critical elements don’t fall by the wayside.

“There’s a difficult mental shift that a lot of restaurant operators, especially those outside of QSR and LSR segments, have to make with delivery,” notes Sean Reiter, director of brand revenue at San Francisco-based fast-casual The Melt. He has also worked as a consultant for fine-dining operators on delivery. “How do you have that same connection to boxes and bags that you have to watching a customer enjoy what you did? How do you have that same pride and instill that same pride in your crew?”

For its part, The Melt is working hard to rise to that challenge. The seven-unit chain works with several of the leading third-party delivery service providers (DSPs), Local Kitchens digital food halls and the ghost kitchen space via an arrangement with DoorDash Kitchens. The company has seen delivery grow from 15% of order volumes pre-pandemic to more than 50% as of December 2021. While indoor dining has recovered to pre-pandemic levels for The Melt, delivery remains 500% greater than what it was prior to the pandemic. Reiter credits a relentless focus on testing and process and The Melt’s mission of “delivering an ‘I love it here’ experience to every guest, every time,” whether on- or off-premises, for its sustained delivery growth.

A sharp focus on testing, process, technology integration and guest experience, both on- and off-premises, has helped The Melt grow delivery volume to more than 50% of total sales. Photo courtesy of The Melt

Top Delivery Challenges

In a Datassential survey of 400 foodservice operators in December 2021, respondents ranked the toughest challenges they face in executing delivery orders from their current locations. Here’s where the road gets rough:

• Staying in contact with customers and delivery drivers when issues arise (40%)
• Needing to “throttle orders down” when the kitchen has too many orders at once (37%)
• Aggregating and expediting orders from in-store, phone orders and multiple apps (37%)
• Managing inventory and updating online offerings when menu items go out of stock (34%)
• Making delivery work out of a physical building not originally designed to handle it (33%)
• Buying and streamlining the right technology stack (22%)
• Procuring enough packaging (17%)
• Handling marketing resources and spending in a new way (17%)
• Making sense of transaction data produced by third-party and digital orders (16%)
• Training kitchen staff to cook new items for delivery (14%)

Data Drives Process

All menu items considered for delivery from The Melt, for example, go through a 45-minute hold test from packaging to consumption to evaluate the impact on quality. And the process of online order fulfillment receives constant scrutiny for opportunities to improve. “We went from having 15 or 20 online orders a day in some units before the pandemic to suddenly getting 200 a day,” Reiter notes. “That really made us focus on process. When you forget to give someone a Coke on-site, that’s an easy fix. But with delivery, if the driver shows up and you don’t have your Coke, that really sucks. So we treat delivery errors like 1- or 2-star Yelp reviews and respond accordingly. And fortunately, the DSPs now do a much better job of providing data that supports our ability to coach our teams. By 10 a.m., seven days a week, our managers have a report that shows how many delivery errors their store had the day before, what the errors were when they happened and who the customer was. That’s not all in the standard reports, but it’s in the dashboards and easily accessible if we look for it.”

Among the important process steps The Melt has taken to help ensure last-mile success is to have one employee physically check off each item on a receipt as it is put into a bag. Further, the company has appointed a dedicated delivery coordinator in each store with sufficient delivery volume (currently all but one). That associate’s job, considered supervisory, is to double-check and finalize all orders before stapling the bags and applying labels that show exactly what’s in each one before placing them in the pickup area.

The company has also integrated its various online order systems into its core POS system, eliminating the need for employees to receive and reenter online orders coming in via multiple tablets. That move alone dramatically reduced delivery order errors, according to Reiter. “Previously, about 20% of our issues were due to someone entering something on an order incorrectly,” he says. “Integration was a game-changer. Almost overnight, we saw our errors go down even as our volume was going up.”

A digitally focused “micro food hall,” Local Kitchens licenses multiple popular local restaurant brands, providing consolidated orders for delivery and takeout, as well as limited on-site seating. Photo courtesy of Michelle Min

Technology was tapped to improve The Melt’s order pickup area too, in the form of large digital screens that update in real-time with order status information organized by DSP. “It lets a driver walk in and from 15 feet away see if their orders are ready or not,” Reiter notes. “On the surface, it looks cool and is convenient, but it also dramatically reduces conflict and tension in an area that can be a source of both. Everything’s clear for the person handing out orders, who no longer needs to constantly be checking to see if something a driver or guest is waiting for is ready, as well as for the people on the receiving end.”

Matthew Rudofker, head of operations at San Francisco Bay-area Local Food Group, agrees technology and data are as important as process and operations for smoothing out last-mile potholes. Founded by DoorDash alumni, Local Food Group licenses The Melt and numerous other leading local restaurant brands in its four Local Kitchens micro food halls. Digitally driven, the concept offers delivery, takeout and limited on-site seating and is geared for rapid expansion. Two additional units are under construction, and the company recently announced it has raised $25 million to fuel its growth.

Using Local Kitchens’ customized online ordering and kitchen display system, guests can select items from any of its licensed restaurant brand menus for consolidated delivery or pickup. The system also enables the operation to collect valuable data that drives decisions about how to improve quality and service times.

“One of the most important, fundamental things in delivery is making sure the time between completing an order and getting it to the guest is as short as possible,” Rudofker says. “That’s critical to the quality of the food and, ultimately, to guest confidence in your brand, especially when you’re quoting them order-ready times. We’re constantly looking at data and how that information is given to our teams. It helps us figure out what we need to do better. Maybe it’s using equipment differently, or different equipment, to meet or reduce our execution-time goal of less than five minutes per item. If there’s a dish that is taking more than that, we reengineer to figure out how to do it faster without sacrificing food quality. So a lot of it is studying the data, building algorithms to ensure — based off of the brand mix, basket size and overall volume in the kitchen — that we’re accurately quoting guests the correct amount of time and delivering excellent quality.”

In some cases, Rudofker adds, menu optimization comes into play. Local Kitchens’ culinary operations team works with its brands to test and refine menu items to ensure each dish is optimized for delivery or pickup and that quality will remain high while in transit. While the company strives to offer as many options from brand partners’ core menus as possible, not everything makes the cut. That may be due to infrastructure limitations in Local Kitchen’s microkitchens, but more often centers on quality concerns.

“We try to execute items that we think will be the highest quality,” Rudofker notes. “That’s really the first thing any operator looking to build delivery volume needs to think about and test for. What’s the stress level of each dish? Is it in the right container? Does it have a value perception to the guest? When you serve something for delivery that you know isn’t going to be great by the time it gets there, and you accept that as just being a consequence of delivery, you’re doing a disservice to yourself and to your guests.”

Inevitably, just as with dine-in, delivery mistakes do happen. And just as with dine-in, how they’re handled is crucial to a brand’s ability to achieve last-mile success. Both The Melt and Local Kitchens take similar approaches, assuming full and immediate responsibility and making things right for the guest. Says Reiter, “It might not even be our fault. The DSP may have been short on drivers, and an order that we prepared on schedule took way too long to be delivered. But it’s still our responsibility to fix it for the customer and later address responsibility and accountability. All of the DSPs are very good about taking fiscal responsibility in such instances, but it does require active monitoring and participation on our part.”

Q&A: Scott Landers, Figure 8 Logistics 

Scott Landers, Figure 8 LogisticsTwo years ago, Scott Landers founded Figure 8 Logistics, a consulting agency based in New York that works with small- to mid-sized restaurant clients to design and implement “first-party” delivery systems. FE&S ordered up some fresh, hot insights on making the last mile a smooth one. 

Q: What’s the most vexing challenge operators face when trying to establish their own delivery systems?

A: Right now, it’s finding drivers, making sure that you have the right people with the right equipment when you need them. There’s nothing like a rain shower on a Friday night to make everyone decide to order restaurant delivery. You can go from needing one driver to a dozen really quickly. That’s always tough, but in this acute labor shortage, it’s really tough, and you have to plan for the possibility or your guest experience suffers.

Q: You advocate “white glove” delivery. What do you mean by that?

A: It’s about having the right tools and systems in place, both in the kitchen and in the last mile, to enable a seamless, pleasant experience. It means delivering a real quality experience: The food is packaged well, arrives at the right temperature and nothing’s missing from the order. But it goes farther than that. Does the driver smile and know your name? Is he or she wearing a branded shirt or hat or something that identifies with the restaurant or delivery service? Is it a user-friendly app or online experience? Is the customer communicated with and thanked? Think about all the things that happen in the restaurant when someone dines on-site, and try to recreate that in the delivery experience. It can be easy to forget, but it comes down to remembering that there’s a person — a guest — on the other side of that delivery and hospitality still matters.

Q: What innovations are you seeing that enhance odds for last-mile success?

A: There’s a lot happening in holding equipment and in packaging and tools to help maintain temperatures during transit. They go beyond traditional insulated bags to actually add gentle heat. As consumers start expecting higher-quality delivery, those things become more important. Also, with delivery and takeout growing so quickly, there’s great concern about waste. We’re starting to see companies introduce reusable packaging. There’s one in New York [DeliverZero], for instance, that has a network of restaurants that deliver food in reusable containers. The drivers simply pick up previously used containers and bring them back to any of the participating restaurants for reuse, or customers can drop them off. There’s a lot of room for innovation there.

Q: What’s one thing that many operators drop the ball on with delivery?

A: One thing that often gets missed, because they’re so focused on simply getting the food made and delivered, is feedback. With delivery, usually you only get and act on feedback when things go wrong, but that’s not a great way to run a business. Feedback, good and bad, is really important, and you have to actively seek it out. The goal is to create easy ways for guests to give it to you, whether that’s calling them, sending a quick survey or including a feedback card with the order that they can send back. Use technology or go old school, but don’t miss the opportunity to reestablish the connection to the guest and gather valuable insights.

Q: Many operators work with at least one third-party partner for delivery. Any advice on ensuring accountability, especially when things go wrong?

A: At the end of the day, it’s your business, your brand and your customer that have to be protected. The restaurant should own the relationship with the guest, starting with having its own online ordering system. But also, know your contract terms with the delivery service provider. They all have very specific reimbursement and refund matrixes, so make it your business to know those policies, monitor them and enforce them. FE&S