At the top of the year, the National Restaurant Association predicted $899 billion in restaurant sales by this year’s end; however, total losses in sales across restaurants surpassed $185 billion between March and August 2020. While losses are high, we’ve continued to see small sales gains as restaurants bounce back. E-commerce saved many restaurants when brick and mortar operations were shut down, and has continued to lend a necessary lifeline to independent restaurant owners worldwide.
While e-commerce may not come to mind when you think of restaurants, it’s the underlying technology powering curbside pickup; delivery; and buy online, pickup in restaurant services. As environmental factors—like colder temperatures in the coming months— build up, we can expect to see a surge in restaurants relying on e-commerce functions well into the new year. Looking ahead, I expect pandemic dining habits to change purchasing behavior for the next few years—with delivery and curbside pick-up becoming lasting conveniences for customers.
Local restaurant owners don’t have the financial resources of larger chains, and with an uncertain future of in-person dining, they need to be strategic. Here are the key trends and tips that local restaurant owners need to know to continue growing their businesses into 2021.
The Delivery Dilemma
When many independent restaurants became de facto ghost kitchens this spring, they either relied on third party delivery apps or implemented their own in-house delivery. While the pre-existing infrastructure of a third party delivery service can seem enticing, they typically charge heavy fees that add up to 15–30 percent of order prices. By looking into various e-commerce platforms, many of which have free plans or trials for small businesses, smaller restaurants can break free from their harmful relationships with third-party delivery services, and launch an online storefront in a matter of hours.
As delivery becomes an increasingly important lifeline for local restaurants, businesses need to promote their in-house offerings. Many restaurants have become increasingly vocal about the high fees charged by delivery apps, and even instances of restaurants attempting to steal customers, and are pushing their customers to order from them directly. Adding a printout into delivery orders highlighting the high fees and including information on how to order directly, as well as offering promo codes to do so, will further incentivize customers.
Contactless is King
Since the beginning of the COVID-19 outbreak, 67 percent of restaurant operators have added curbside pickup, and 44 percent have added new local delivery capabilities. To keep these options as safe as possible, restaurants should continue to offer contactless fulfillment by dropping orders in trunks of cars or leaving orders on doorsteps. For states where safer, outdoor dining is available, there are additional ways to keep the experience as contactless as possible. For example, creating QR codes to redirect diners to online menus helps eliminate the need to sanitize and share physical menus. Many restaurants are taking this a step further, and blurring the lines between online and in-person commerce: even for in-person dining, restaurants are keeping their menus online, and having diners order directly from their website, or use contactless options like Apple Pay and Google Pay, to avoid exchanging cash or credit cards. Ultimately, even the smallest restaurants should have a system in place to provide the most frictionless and contactless experience as possible to their diners.
To-Go is the Way to Go
New York City, which formerly was an epicenter for the pandemic, announced that it would allow outdoor dining year-round. With tent enclosures and heat lamps, some restaurants will be able to continue offering a hybrid of outdoor and indoor seating. That being said, with the weather starting to turn, most restaurants should anticipate a spike in online and pickup orders. Many restaurants have turned to creative solutions like shifting from prepared meals to selling alcoholic beverages and meals kits. From bars selling to-go cocktails to Mexican restaurants offering taco kits, local establishments are even engaging customers who are cooking more while at home. We can anticipate that meal kits will be a long-term fixture in restaurants’ online offerings. Think of the families that typically avoid the stress of holiday meal prep by dining out. By offering them ready-to-bake meal kits or full family-style packages for pickup, restaurants can help recoup sales.
Lean on Local Love
Communities are coming together to support local businesses during quarantines and limited indoor operations. To ensure that locally-owned restaurants can take advantage of this attention, operators need to have the right tools in place. Having a tipping feature is important to help support employees and delivery staff that work on the frontlines. These teams are making a personal sacrifice, and having a direct tipping link, instead of relying on those managed by third-party services, helps maximize the amount of money given directly to staff. On a similar note, restaurants should set up direct donation pages on their websites. While sales have marginally increased, many small restaurant owners are behind on recurring expenses like rent. Owners should make it as easy as possible to receive local support to help ease the burden of recurring bills and expenses, while customer traffic is still lower than usual. Lastly, using products like gift cards enables restaurants to collect sales in the moment, whether customers plan to redeem them now or in the future. For example, Facebook’s Support Local initiative enables small businesses to share digital gift cards across Facebook and Instagram.
Know Your Neighborhood
An important part of getting on the radar of local diners, is making sure a restaurant’s presence is known online. Without being a part of third-party delivery services, restaurants need to prioritize discoverability. Setting up an account on online business listings, like Yelp or Google My Business, can help showcase local restaurants. It’s important that restaurants double check that business listings link back directly to their online ordering page to boost sales. Search engine optimization, SEO, is another major player in getting in front of potential customers. There are a host of tools that assist with discoverability, such as Google Shopping, which offers both free listings and paid advertising services. Additionally, as owners update or build out their websites, it’s important to use keywords that might show up in customer searches. Keywords can reflect a restaurant’s cuisine, the kinds of services and meals served, outdoor ambiance and capacity, and more. Technically speaking, smaller restaurants also need to make sure that they update their local mapping capabilities. Not only is this helpful with neighborhood brand awareness, but having a mapping feature on a website makes delivery capabilities more accurate and efficient.
There are still unknowns regarding what the future of restaurant operations will look like. To stay in business and stay competitive, restaurants need to bridge their online and offline presences to offer the safest and most efficient experiences for diners.
Erik Suhonen is Vice President of Operations and Product Partnerships at Ecwid, a global SaaS e-commerce platform established in 2009. Ecwid provides online selling solutions for small businesses in over 175 countries and in 54 languages. At Ecwid, Erik leads strategic product partnerships globally— cultivating App Market partnerships and relationships with Facebook/Instagram, Google, Apple, Pinterest, and Snap. Erik also manages global operations, including investor relations, Board Of Directors activities, investment and strategic due diligence, as well as compliance. Erik holds an MBA from USC’s Marshall School of Business.