By Lisa van Kesteren/ SeeLevel HX CEO
The growth of third-party delivery services both threatens and provides opportunities for the dramatically changing QSR industry. But the good news is that the larger retail industry has already been dealing with a similar dramatic change for some time, via ecommerce.
As a result, QSR leaders now have something akin to a textbook of teachings about this kind of game-changing disruption that can help guide the path forward for quick-service brands with a quick-response mentality. Here are five main take-homes from the retail sector about this increasingly pivotal game of delivering what customers demand in delivery services.
1. Watch those "upstarts" and embrace disruptive change.
It’s tempting to think you’re on top of the latest industry innovations, or even to scoff at those entering the industry along with their offbeat ideas. But the truth is that real industry-changing disruption is only disruptive for the businesses that don’t keep up with change.
Fiercely protecting existing business models puts the focus on the old and keeps innovation out. Disruption happens when those in the business lose the ability and thirst for envisioning and enacting change. Just look at Amazon, which started out selling just books. Today, through Whole Foods, Amazon owns more than 450 retail outlets that sell meals and they started delivering meal kits last month, as we learned in this article on QSR Web last week.
2. Keep your ears and eyes open around your customers.
Do you really know your customers? Do you know why they bought with you today as well as why last year’s customers are no longer buying with you?
Customer habits can change as fast as iPhones and apps. Staying on top of those changes is critical, just as is also staying on top of your competitors and what they are doing to respond to new customer preferences. Remember, many retailers long held on to the belief that customers would always prefer buying in a physical store over online shopping, and we know how that turned out.
3. Understand the 'why.'
Why are your customers buying certain new products and services? You must ask to know, making the idea of surveys one worth considering as these tools can provide vital insight into what customers are buying, as well as why and why not.
Capturing changing customer motives should be a key component of your market research and should include competitors and newcomers that you might not have previously considered. For instance, a recent SeeLevel HX Food on Demand survey found that one in three people uses a food delivery app to avoid having to call to order because it's more convenient than interacting with people — something retailers underestimated for years.
4. Are you delivering on your brand promise?
In times of change and innovation, new products and services can take time to implement system-wide, so while you’re at it, make sure your customers appreciate and value your changing promises. A radical change in the brand promise can backfire if not communicated and executed well, as the longtime retailer, JCPenney might attest.
5. Reconsider vertical integration.
Disruption changes traditional power structures so it makes sense that QSR leaders consider that nothing is "set in stone" when it comes to laying a good foundation for an atmosphere that promotes radical change. As mentioned above, Amazon started out in books and is now a vertically integrated behemoth that runs it’s own data and distribution centers, as well as an increasing part of its delivery network.
Are your partnerships strong enough to innovate with you, or should you consider more vertical integration? Third-party delivery services are the best example of the vertical integration challenge. Can you do without a third party? Can you create your own? Across brands? In today's business environment, the old saying, "Never say never" has never meant so much to so many.
Lisa van Kestersen is the CEO and founder of the mystery shopping agency, SeeLevel HX, with more than 600,000 mystery shoppers, covering QSR, retail and financial services nationally.
Topics: Business Strategy and Profitability, Catering, Customer Service / Experience, Delivery, Equipment & Supplies, Food & Beverage, Franchising & Growth, Marketing / Branding / Promotion, Operations Management, PCI Compliance, Trends / Statistics