Pizza Restaurant's Dilemma - Deliver Or Don't?
It all began with that ad.
You know the one I mean: "We'll deliver your pizza to your house in 30 minutes or it's free!"
It was a great idea at the time. Something that added real value to the product. Free Delivery. And with gas prices so low and labor so cheap it was very cost efective too.
That was then. This is now. And now labor is not so cheap and gas prices are going through the roof. And yet, your customers expect and often demand delivery.
What should you do?
A quick analysis of Pizza Galaxy's clients show that most of the online orders are for delivery. In one case, Vinnie's Pizza in Jersey City, 95 percent of their online orders were for delivery. True, there were other factors. Vinnie's is in a heavliy urbanized area. They have no parking at all and are surrounded by businesses and apartment buildings on a heavily trafficked road.
On the other hand, Pizza Serena of Kent, Ohio and Fast Eddie's in Collingswood, NJ are both in more suburban areas. Pizza Serena gets 65 percent of its online orders for delivery, while Fast Eddie's gets 75 percent. It is no coincidence that as gas prices rise, more and more customers want to let the restaurant bear the burden of getting their meal to them.
In some cases the decision to deliver or not is out of your hands. If Vinnie's Pizza did not offer delivery, they would lose most of their business. Even when a restaurant has a significant carry-out business, it is typically less than their delivery sales.
Granted, carryout is the least expensive proposition. You don't need to worry about driver salary, insurance or delivery subsidy costs when the customer comes to you to take their meal home. Carry-out customers don't need dishes and flatware, air conditioning in summer and heat in winter. They don't need tables and chairs, Their dishes don't need to be washed or their tables bussed. they don't need to use your bathrooms, they don't take up space for hours at a time. If all your business was carry out then you would have it made.
I'm not suggesting you throw out your furniture and fire your busboys and wait staff, but it is important to keep in mind the different expenses associated with each component of your business.
Delivery is no different. Like carry out, it is separate from your dining room business. Your challenge is to make it affordable.
If you analyze your delivery expenses you will probably find that it costs more than $3.00 to deliver a pizza. This includes wages, stipend, insurance, matching social security and related expenses, based on staff members who perform other duties when not delivering and who use their own cars.
In many cases the costs of delivering can be reduced. Here are some strategies that have worked for others:
- Ray Bari Pizza in Manhattan, NY cut their delivery costs by delivering on bicycle. This works because they are located in a heavily urbanized area, and their customers are relatively close.
- Rocco's Pizza and Deli in New York, uses their catering van to make deliveries. This eliminates the stipend they would otherwise have to pay their drivers for using their own cars.
- Al Bacio's Pizza, Tampa Bay, Florida, outsources their delivery. This tiny pizza shop, run by two people, is so small and so efficient that hiring additional staff for driving, plus insurance and so forth was not feasible.
- Remember to use your delivery vehicles as advertising. Car toppers and magnetic signs keep your name in front of the public, and they do it in places where you are already delivering.
- Train your drivers to leave door hangers with the next door neighbors when they make a delivery.
Offering delivery for the first time can be a daunting experience. While it sounds simple, just get into a car and take the order to the customer, it has to be managed, just like every other aspect of your business.
Here are some of the more ghastly errors that others have made: and you will hopefully avoid:
- Don't pull employees off your production line or counter to deliver. You will pay for this by reducing kitchen efficiency and making your live customers wait, and wait, and wait, until they go somewhere else.
- Know your delivery area and Stay inside it. With a delivery distance of 2.5 miles it is a 5 mile round trip for the driver. At 30 MPH it will take 10- minutes just to drive, another 5 or 10 minutes to deliver the pizza. You do your best to bunch deliveries according to location, but ultimately it depends on when the customer orders and where they are located. Offering delivery in too wide an area quickly leads to slow and inefficient deliveries. Some operators overcome this obstacle by offering more remote locations a preset delivery schedule. For example if there is a large trailer park or camp ground some distance away with a lot of potential customers, drop off some flyers stating that all orders received between 5:00 and 7:00 will be delivered at 7:30. When these customers know the rules ahead of time, the convenience of having delivery at all at their location vastly outweighs the limitations of the schedule.
- Don't force your dine in and carry-out business to subsidize delivery. If you offer free delivery, but your total prices are higher than your competitors this could badly impact your dine in and carry-out business. Institute a delivery charge. Blame it on gas prices and rising labor costs. Your customers may grumble a little at first, but most people are fair minded and long term this is a far better strategy than eating the loss or losing business.
- Streamline your production and dispatch process. You have to cook the pizza, package it and get it out the door for a ten minute drive to the customer. For the customer to get his pizza in a reasonable time you will need to pre prep your pies. When a delivery order comes in, your production line can grab a pre-sauced and cheesed pie off the rack, top it in one minute, bake it for 8 minutes and have it in a box and ready to go within 15 minutes of the call.
Whether you provide delivery or carry out or both, Pizza Galaxy can help you set up your online menu to cover your situation. We can automatically apply a delivery charge, help you create special coupons and provide you and your customers with a fast and friendly ordering experience.
