Elevating the Off-Premises Experience

Print

Off-premises dining may have peaked during the pandemic, but consumer trends suggest that it’s here to stay — and customer expectations are changing.

By Raghav Srivastava

With the height of the COVID-19 pandemic in their rearview mirror, restaurant operators are thrilled to be welcoming guests into their establishments once again. However, consumer behavior suggests that off-premises dining is here to stay, yielding a critical opportunity for operators to attract new customers and open additional avenues for business growth.

Online orders currently represent 40% of total restaurant sales, and 61% of Canadian consumers ordered online the same amount or more in 2023 than they did in 2022. Recognizing the business impact of this development in dining behavior, the Canadian food industry is investing $12 billion to develop online platforms that will accommodate off-premises dining in the future. As takeout and delivery continues to become a more popular dining option, the following tactics can help operators grow their business, drive customer satisfaction and secure diner loyalty.

  1. Diversify Ordering Capabilities

In most cases, customers can place takeout and delivery orders over the phone, but restaurants that provide additional ordering options can ensure customers are aware of their off-premises offerings. In fact, more than 80% of people who use food delivery services say they are likely to try restaurants they have not visited. However, profit margins are often lower for orders fulfilled via third-party apps. These platforms may expand the consumer pool, but some operators are opting for restaurant-direct deliveries to accommodate ordering preferences without sacrificing profitability. Meanwhile, older generations still prefer to place off-premises orders by calling in.

These insights reveal a key takeaway: Offering multiple ordering options can appeal to evolving consumer preferences while increasing sales and diner accessibility.

2. Expand Offerings for Off-Premises Dayparts

According to DoorDash, late-night and breakfast food orders increased by 68% and 53%, respectively, in 2023. This growth suggests a prime opportunity for operators to expand delivery and takeout menus that fulfill off-premises dining demands throughout the day. If you can deliver when consumers are hungry, there’s a good chance they’ll order from you again — and again.

3. Invest in Quality

Most consumers expect their food to be ready in 30 minutes or less. Moreover, they expect that food to be warm, fresh and exactly what they ordered. Unfortunately, quality control is a common issue with off-premises dining, and failing to fulfill consumer expectations can compromise a restaurant’s hard-earned reputation. That’s why it’s important for BOH staff to prepare off-premises orders not only quickly and accurately, but also with products that are designed to go the distance.

Take french fries for example. This high-margin menu offering is the second-most popular food item ordered by Canadian consumers. However, traditional fry products are designed to be eaten immediately, not after sitting in a delivery car for 30 minutes, slowly collecting moisture. Fortunately, operators can avoid the pitfalls of soggy delivery fries by trading up to a product that’s designed specifically for off-premises dining: McCain® SureCrisp® fries.

SureCrisp® fries are prepared with two different batters that keep them crispy throughout the delivery process. By investing in SureCrisp® fries and other off-premises products that bring on-site quality to the comfort of the couch, operators can give delivery and carryout diners the off-premises dining experience they demand. And who’s more likely to place repeat orders than a satisfied customer?

An increasing number of Canadian consumers are embracing delivery and to-go, making off-premises orders your chance to secure their business and loyalty. Whether or not you can meet their expectations will directly impact their satisfaction — and your bottom line.

 

Wendy's embrace of dynamic pricing a game changer

Print

How Wendy’s adoption of dynamic pricing will affect the food industry and consumer perception

By Sylvain Charlebois

Dynamic pricing, which adjusts prices based on demand, is poised to become a more prominent feature in our daily transactions, particularly in the food industry.

It is not a novel idea. Dynamic pricing has long been employed in sectors such as airlines, theme parks, and hotels, where prices fluctuate to either entice customers during off-peak times or capitalize on high-demand periods. The acceptance and understanding of this model as a means to optimize sales are well-established in these non-food domains.

The food service and retail sectors are no strangers to dynamic pricing either. With the advent of digital price displays, many retailers have been quietly implementing this approach, adjusting prices multiple times a day as needed.

However, the sensitivities surrounding pricing in the food industry are distinct. Food is not just another commodity; it is a necessity, and the ethics of its pricing carry a different weight than selling tickets for a vacation to Honolulu.

The recent announcement by Wendy’s in the United States that it will adopt dynamic pricing during busy hours marks a significant moment in the food industry. This public declaration stands out in a sector where price changes are often made discreetly. Wendy’s is essentially advising its customers to visit during quieter hours to save money, which some might view as an inconvenience. It’s akin to transforming its operations into a stock exchange, where customers are encouraged to ‘buy low and avoid buying high.’

This move is particularly intriguing from a public relations perspective, given that Wendy’s competitors have not made any public announcements regarding dynamic pricing.

The power of dynamic pricing lies in its ability to bring predictability to the inherently unpredictable business of selling food. Factors such as weather, local events, or even celebrity comments can drive consumer behaviour in unpredictable and sometimes irrational ways. By implementing dynamic pricing, businesses can achieve a more optimal balance between supply and demand, thereby gaining more control over their operations, including inventory management, staffing, and other aspects of the business.

Moreover, dynamic pricing can potentially reduce food waste, a critical issue in an industry characterized by low margins. According to a study published in Marketing Science, dynamic pricing can reduce waste in food retailing by 21 percent.

But while this model can create a better equilibrium between supply and demand during operating hours, it is not without its challenges for consumers. For example, during the empty shelves phenomenon of March 2020, dynamic pricing could have led to immediate price spikes, pushing food inflation to unprecedented levels when many were seeking to stock up and stay safe.

The increasing availability of artificial intelligence and other technological tools has made dynamic pricing a more viable option for food executives. Wendy’s decision to publicly embrace this strategy could be seen as an attempt to demystify a practice that has already been in use, albeit quietly, within the industry. As consumers become more aware of time-based pricing, they may realize that many prices have already been affected by such an approach, even if it was not explicitly known.

The repercussions of Wendy’s announcement will be interesting to observe. Customers may choose to penalize the chain for its transparency on dynamic pricing and opt for competitors, unaware that these alternatives have likely been employing similar pricing strategies for years.

In the end, the public’s response to this shift towards more dynamic pricing in the food industry will provide valuable insights into consumer behaviour and the acceptability of such practices in the context of essential goods like food.