Andrew Charles of Cowen & Company outlined the state of the delivery business at the Food On Demand Conference today.
Owning the customer is critical for restaurant operators as the delivery and mobile ordering business evolves, said Andrew Charles, senior analyst for Cowen & Company, in opening remarks at the Food On Demand Conference in Chicago today.
“The best thing that restaurant operators can do is they need to own that customer and the customer experience,” he said. In May of 2017, he said, 52 percent of customers Cowen surveyed said they placed their orders through the restaurant’s app or websites; now it’s down to 30 percent as third-party platforms rise. “Restaurants, this is your wakeup call,” he said, and operators should look at delivery companies as their partners.
He pegged delivery as a $40 billion industry, 7 or 8 percent of the entire restaurant business and set to rise to $60 billion.
He chronicled the rapid progression of development. “Think about the first day, in 2015, it was kind of like caveman discovering fire. What is this? Is it a tool? Is it a threat?” he said was the attitude. “I’m reluctant to say we’re at the halfway point to this though because there are so many restaurants getting into it. I would say we’re in the third inning.”
Tom Kaiser, editor of Food On Demand, noted “the insane amount of money that’s flowing into the space,” as he welcomed attendees to the FOD Conference, the second annual event. A sister publication of Franchise Times, Food On Demand publishes a weekly e-newsletter on the intersection of food, technology and mobility, available at foodservicenews.com.
Nicholas Upton, news editor of Food On Demand, had interest elsewhere. “Money is cool but what about robots?” he said in opening remarks. “I’m kind of a geek with this kind of stuff, but it’s more than a nerdy outlet for myself. The pace of proliferation is fascinating,” he said.
The Food On Demand Conference continues through Tuesday at the Marriott hotel in Chicago, including sessions on ghost kitchens, the future of the convenience economy, profiles in delivery courage, and the real cost of outsourced delivery.