The pizza industry has been a standout performer in recent years, with sales in the U.S. alone reaching a staggering $55 billion in 2022. This is primarily due to the convenience, affordability, and widespread popularity of pizza as a meal option, particularly for delivery. The rise of specialty pizza shops coupled with the efforts of big-name players like Pizza Hut and Papa Johns to maintain their relevance has created a dynamic and competitive landscape ripe for optimization.
The Importance of Direct Delivery
A recent “Future of Restaurants” report by Square reveals that nearly 70% of customers prefer to order directly from a restaurant. With this in mind, it’s critical for businesses to have the right resources in place to deliver an outstanding customer experience, build brand loyalty, and drive repeat purchases.
Why Hybrid Delivery Model is Key
Demand for home-delivered pizza isn’t going away, and outsourced delivery costs will continue to increase. On the other hand, in-house delivery operations come with their own set of challenges, particularly with rising labor costs and limited driver availability. The Hybrid Delivery model is the answer, offering the best of both worlds.
Third-party delivery services offer convenience for restaurant operators, but relying solely on outside partners can result in a lack of control over the brand experience and create unpredictable reliability. For example, according to the Service Management Group, poor third-party delivery experiences that damage a brand’s reputation can lead to rating declines of up to 1.5 stars. Additionally, these drivers are not employees, which means brands have little control over delivery outcomes and customer experiences.
With the Hybrid Delivery model, pizza restaurant operators can launch a self-delivery program alongside their third-party partners. This means that priority orders can be self-delivered, while peak times can be partially or fully outsourced to third-party delivery services. By providing fast and convenient deliveries to high-value repeat customers, Hybrid Delivery increases customer loyalty and retention while mitigating the rising costs of outsourcing.
Here are three ways Hybrid Delivery can help set pizza restaurant operators apart from the competition.
Balancing Costs and Resources
Technology can help determine the best delivery approach, whether in-house or outsourced. A delivery profitability ratio should be established to ensure margins are maintained through third-party services. Hybrid models allow restaurants to avoid price increases by self-delivering specific orders, such as those over $100 and within five miles.
In addition, Hybrid Delivery allows for employee cross-training in different aspects of operations, such as in-house and delivery networks, to maximize efficiency.
Ensuring Consistent and Efficient Delivery
The average time it takes for a pizza restaurant to decide whether to send an order to in-house or outsourced drivers manually is 10 minutes. While this may not seem like a long time, it can be the difference between a satisfied customer and a negative review online.
Hybrid Delivery technology streamlines local delivery by taking into account locations and partners. Algorithms dispatch orders automatically to in-house or outsourced drivers, improving food quality and increasing repeat orders. Delivery times can also be optimized by comparing pick-up ETAs and selecting the fastest option.
Pizza Hut, for example, has deployed third-party delivery services in about half of its locations. While this increases delivery capacity, the manual process of deciding which orders to outsource can be challenging. The company recently acquired the technology firm DragonTail to improve efficiency.
Providing an Ideal Customer Experience
Personalized service tailored to the local market and its customers is vital whether you’re a niche player or part of a big chain. Use customized tracking links with the restaurant’s logo and promotional messages to maintain brand awareness on both in-house and third-party delivery orders. This increases revenue and repeat orders by familiarizing customers with the business.
The Hybrid Delivery model is an effective solution for pizza restaurants looking to win market shares in this competitive industry. By balancing costs and resources, ensuring consistent and efficient delivery, and providing an ideal customer experience, restaurants can set themselves apart from competitors and build strong brand loyalty.