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Optimizing for off-premise

Photograph courtesy of Noodles & Co.

Shareable bowls of queso are a top seller with dine-in customers at Moe’s Southwest Grill, but those same bowls can be a delivery disaster. Two- or 6-ounce cups of the stuff, on the other hand, are steadfast travelers and work to boost the check.

That was just one of the lessons learned during Moe’s quest to ramp up delivery at 80% of its 720 franchised locations, says Tad Low, director of off-premise for the fast-casual chain. “Everybody wants to do [delivery], but nobody has it figured out,” he says. “There are menu items that are operationally challenging and others that are poor travelers. It’s a work in progress.”

“Operators need to curate the delivery menu, focusing on items that travel well and are easiest on the prep team,” says Sterling Douglass, CEO and co-founder of Chowly, a company that streamlines delivery orders with POS systems. “The overarching theme is simplification.” 

Editing the menu

Customization is an expectation at Moe’s, where diners have a choice of more than 21 ingredients to build a bowl or burrito. But that wide of a selection jacked up the cost of goods 3 to 4 points on third-party delivery menus, Low says. “So we looked at the top items people were ordering and cut it down to 12.” 

Moe’s is currently testing a modified third-party menu that offers just those ingredients and has created a second line in many of its locations to prevent delivery orders from interfering with in-store orders. This line operates just six hours a day, during rush periods. The chain is also testing eliminating sides from the delivery menu (they slow down the line), as well as tacos (corn tortillas don’t hold heat) and the kids menu. “We didn’t want to lose those customers with kids, but they don’t seem to order from third-party delivery,” he says. 

The delivery menu does include signature burritos, but “customers tend to order the first one they see,” Low says. So Moe’s is testing offering just the best-selling burrito for delivery to make it easier for customers to order. 

Douglass supports a move like this. “Delivery customers can suffer decision paralysis when confronted by too many options,” he says. “Figure out what’s most important and organize the menu accordingly.”

Pricing it right

Profitability continues to be a challenge, as third-party delivery companies typically charge as much as 30% commission on delivery orders. In response, some Moe’s franchisees have priced delivery items 10% to 15% higher—but Low says parent company Focus Brands has also been able to leverage its volume to reduce those commissions, driving more money down to the bottom line.

“Delivery guests are not as price-sensitive as customers in other channels,” says Dave Boennighausen, CEO of Noodles & Co. “But we are currently doing research on the value guests place on delivery.” The company started testing different pricing strategies in May, looking at raising prices on delivery items. It’s also working with a tech partner to tweak the online-ordering experience to be more efficient for both operator and customer. In addition, it’s evaluating the installation of pickup windows in some locations.

Delivery now accounts for 5% of Noodles’ sales, “but it’s getting more traction, and we really want to push it for 2019,” says Boennighausen. “I don’t think there’s been a more dynamic trend in the 15 years I’ve been at Noodles.”

Testing texture

Noodles’ menu is very adaptable to delivery, Boennighausen adds. Sauces, pastas, and even zucchini noodles travel well and retain heat. “Our biggest concern is moisture, so we’re looking a lot more closely at sauce ratios and absorption. And whenever there’s ideation for new dishes, we test it in the container, determine the right level of sauce for holding and see how well it holds up over time,” he says. Noodles is also working on a more effective beverage delivery strategy.  

“We consider delivery whenever developing new items,” says Craig Rispoli, executive chef of Fresh & Co., a New York City-based fast casual with 19 locations. For example, he is composing salads with crisp greens and ingredients such as jicama, sugar snap peas, almonds, candied pecans and hazelnuts that don’t lose texture during travel. Salads made with soba noodles and roasted curry cauliflower are listed on the online menu, but those that combine warm and cold components are not. “Customers can order custom bowls for delivery, but we make recommendations on the menu so we don’t set them up for failure,” Rispoli says. 

Dividing the dayparts

For daytime delivery orders, Fresh & Co. relies mostly on third-party vendors, but from 5 p.m. on, the locations deliver food themselves. In test now is Fresh & Co. After Dark, an exclusive delivery dinner menu that customers can’t get in the stores, says Sandra Pope, director of marketing. The scaled-down menu includes composed salads prepped for travel, such as Chili Lime Shrimp Salad and Salmon Avocado Caesar (without the croutons); both $13. Also available are pasta Bolognese made with plant-based meat and herb-roasted chicken with sweet potato wedges and broccoli over brown rice, as well as a few desserts and small plates unique to this menu. 

“During the day, delivery creates another revenue source and reduces lines in the store,” says Pope, noting that lunchtime is extremely busy. “Delivery allows us to do three times as much business.” The After Dark menu is a way to capture that dinner customer. “We would like for digital and delivery to become 40% of our business so we can serve more people.” 

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