Whatever you call it—click and collect; buy online, pickup in-store; curbside pickup; or drive-up pickup—omnichannel methods of online ordering and receiving the goods in-person have flourished as retailers have committed to improving the customer experience.
These flexible options that are offered by big box stores like Target, Home Depot, and Walmart, are getting new life lately as consumers want to save on shipping costs or have a spur-of-the moment need but are wary of shopping in-store due to the pandemic.
Takeout Is Evolving
Takeout is nothing new in the restaurant industry, but buy online, pickup in-store models refined by retailers are also having broader applications for food service. Dining rooms have closed across the country, which has spurred the uptake in delivery and takeout.
Because of the proliferation of digital ordering platforms, the number of US consumers relying on food delivery and takeout has been on an upward trajectory for the past few years. The global pandemic has only added to the popularity of off-premise dining during 2020.
Just because food service options have been closed to dining-in across much of the country, doesn’t mean consumers have lost their appetites for restaurant-quality food. In fact, consumers are placing online orders like never before, and restaurant chains have reported record levels of digital sales growth.
June 2020 data from POS platform, Toast, shows the marked shift in dine-in vs. off-premise revenue. In early March, the split was roughly 84% vs. 19%. By late April, there was a reversal where around 72% of revenue came from off-premise sales and dine-in revenue hovered around 31%.
The Pickup Pivot
Both consumers and food service operators have become disillusioned with the high fees charged by third-party delivery apps. To say there’s a backlash brewing is an understatement.
Amidst the pandemic-related consumer behavior shifts and business model tweaks, there has been one distinct trend to emerge: a customer preference for pickup.
According to Rakuten Ready, order for pickup volume was up 202% between March 2020 and May 2020, and 30% of those orders came from customers who were new to using “click and collect” for restaurant orders.
In a recent earnings call, Chipotle reported that its digital pickup business was up 140% compared to pre-pandemic levels, a larger bump than the 125% increase in delivery orders experienced by the national chain.
The Road Ahead
Similar to the early days of retail “click and collect,” food service pickup is not without its own unique challenges.
Most food businesses didn’t have time to do extensive testing and learning before implementing an ad hoc takeout solution. Front-of-the-house staff handing out orders or writing names on bags and placing them on a table near the entrance might be sufficient for now, but can it scale?
If it turns out that online food ordering for pickup is here to stay—and we believe it is—food service operators will soon need a more robust solution for handling the demand.