Hospitality Speaker Series


May 6th, 2019


Topics for Discussion: Delivery: Market Insights & Trends

(From Left to Right) Adam Eskin, Alex Blum, Andrew Peskoe, Andy Appelbaum, Krystle Mobayeni, Noah Glass

Panelists:

Andrew Peskoe (Moderator), Co-Head | Golenbock Eiseman Assor Bell & Peskoe, LLP

Adam Eskin, Founder & CEO | Dig Inn

Noah Glass, Founder & CEO | Olo

Alex Blum, Founder | Relay Delivery Krystle Mobayeni, Co-Founder & CEO | BentoBox Andy Appelbaum, Managing Partner | RiverPark Ventures, Co-Founder | Seamless

The latest installment of the E.B. Cohen Speaker Series took place on Monday, May 6th at City Winery in New York City. Over 100 Hospitality industry leaders, CEOs, and CFOs gathered to learn, and share thought leadership regarding the complicated area of delivery for restaurants. The Hospitality Speaker Series event is held every six months in an effort to bring together the hospitality industry to learn from each other.


Andrew Peskoe, the moderator for the panel, opened up the discussion on delivery by citing a few significant statistics relevant to the industry. He went onto explain, “Nationally, off-premise dining is about 35% for all restaurants, and that is estimated to grow to 50% by 2024, with all of the growth from 35% to 50% being in delivery, not in pick-up, not in catering.” However, the next fact that was revealed showed that operators may disagree with the upcoming growth, stating, “A majority of operators surveyed believe they lose money on delivery.”


The conversation was then turned over to the panelists, who educated the audience by describing the arrival of the current state of delivery affairs, the various options for delivery, and each of their roles within the restaurant delivery system. Quickly, both the panel and the industry addressed the reality that some of the traditional marketplace delivery models are simply too expensive. Andrew Peskoe noted, “This is why, as you can see from our slide, there are many ways around the traditional marketplace models.”


Simplified Delivery Universe Slide

Andy Appelbaum discussed that costs, historically, were not always what they are today for the marketplace model, in fact, he cited, “Seamless, which began as a marketplace for businesses, was actually at a price point far less than today.”


One of the critical themes throughout the discussion highlighted the tension between restaurants versus marketplace technology companies. Restaurants want to own and control the customer experience and data while marketplace technology companies want to assume ownership of the customer when an order is made through their platform, especially given the large fee that they take.


Alex Blum advised restaurant owners and operators to offer consumers a way to order that is directly through the restaurant itself, rather than from a third-party platform, where there is the possibility that they may lose the consumer altogether. He declared, “It is the marketplace platforms that should be paying the restaurants for the customers, not the other way around.”


The panelists detailed valuable solutions for restaurants to consider for their delivery options.


Noah Glass described the ways that Olo partners with its clients to better capture the correct data for constant growth. He suggested that restaurants are at a significant disadvantage from a technology perspective when competing with larger technology marketplace companies and that restaurants need to capture the value of their customer data. He explained, “One of the big challenges with the rise of third party delivery marketplaces is that they’re fundamentally disrupting the restaurant’s relationship with their consumers who want to order their food and consumers are being retrained to think, ‘I want delivery, let’s see what looks good,’ rather than, ‘I want a specific brand, let me place an order from their site or app.’”


Krystle Mobayeni commented how BentoBox supports restaurants from a technology perspective. Through this technology, restaurants are able to reduce the costs related to the delivery transaction. In particular, the technology behind online ordering through a restaurant’s website may not be as complicated and expensive as one might expect. She stated, “We built a really streamlined system to be able to quickly and efficiently translate the restaurants’ brand online.” With a deep background in web design, Mobayeni went onto explain how the system is an affordable option for restaurants to use in order to translate their brand from their brick and mortar property onto their digital property.


The only restaurant operator on the panel, Adam Eskin, acknowledged that the challenges related to delivery are significant. The high costs, the impact on the in-restaurant dining experience, and the need to give customers convenience when they want it has led him to develop an entirely new approach to restaurant delivery. Eskin determined, “Even the smallest details need to be carefully considered to execute delivery properly. When we tested, it was summer and the temperature of certain items from the time they left the restaurant to the time they arrived at a delivery destination, needed to be adjusted when we began beta in the winter.”


The panelists agreed that consumer behaviors are trending towards increased delivery levels and that the market share of restaurant food delivery is rapidly increasing relative to in-restaurant dining. In fact, Appelbaum noted, “Post earn-out rates went from seven and a half to ten to fourteen to eighteen and now as high as twenty-three to twenty-five percent.”


“Restaurants reacting to these trends in many cases in lieu of developing a delivery strategy that works are missing an important opportunity to create value for their brands,” Glass noted.


The 5th Speaker Series panel was followed by a question and answer segment, allowing for the audience to receive personal advice from the panel. To view the full gallery from the event, please go to www.cohenins.com/speaker-series.

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