The rapid growth of online delivery apps in the UK has left many restaurants wondering how to work with them and beat the type of disruption that has decimated other industries.
At AlixPartners, we have seen two common reactions from operators in the face of these threats and opportunities – ‘doing nothing’ and ‘jumping in’ without planning. Both can be disastrous to sales, operations and reputation, so where should you start?
An ever-changing dining landscape
Changes in consumer behavior and the rise of technology platforms have caused new market structures to emerge. These pose both challenges and opportunities for operators.
The emergence of online platforms has seen the gig economy gather momentum. Technology has enabled new business models, platforms and sales channels, with platforms placing themselves between the service provider and the consumer.
As more digitally native Millennials and Generation Zs become economically active, these means of selecting and transacting with restaurants, pubs and other food establishments will continue to accelerate.
“The approach to online delivery is front-of-mind for private equity that already own businesses in the sector, or those weighing up a new investment. Companies seeking investment that are able to demonstrate a credible, earnings accretive and future-proof online delivery strategy should prove attractive to potential investors.”
-Craig Rachel, Senior Vice President, AlixPartners
Why online platforms are a critical channel
Following the rapid growth in online delivery and consolidation in the sector, three powerful players have emerged. All have strong brand recognition and consumers are exceptionally loyal to their platform of choice.
While online delivery offers opportunities to restaurants as a new sales channel, it also raises new business challenges.
Carefully assessing how, and if, delivery fits with your brand promise, food concept, and customer expectations is the first critical step in determining how delivery might fit with your business.