The fast-food industry has changed radically in the recent years to keep up with technology in people’s pockets. Some restaurants are recognizing that tradtional services such as serving food may be redundant…
Previously: Discovering DELIVERY-ONLY pizza
An example of this business-model is Bianca Pizza which is a small delivery-only resturant in Adelaide. Last week When I discovered it, I was not to happy that I had to wait on the street for my pizza (as they had no room inside for customers), however I was impressed the efficiency of the business. So I’m going to look at the business model in a little more detail to determine if a delivery-only resturant is a suitable investment.
There are many savings that I could spot in why this business model could be competitive against traditional fast food. Some of the benefits include:
|Order Automation||All orders processed through automated systems; app, website.|
|Cheaper Overhead||Less electricity, services used, cleaning as no customers are visiting the store|
|Cheaper wages||No staff needed to serve customers|
|More kitchen||As no store space needed for dining/waiting|
|Less rennovations||No signage or cosmetic rennovations required to the property, as it will never be seen by customers!|
|Cheaper locations||As all business is driven by online sales, the location is not as important as it isn’t consumer facing.|
These are huge savings for a business, which means they can pour more money into more important things LIKE THEIR PRODUCT! … asside from focusing on making better pizzas, they can also spend more money on online advertising and web development too.
This all sounds great right!? Well as with any business, it’s important to analyze the risks, especially internet based businesses. And an online business has quite a few. Some risks include:
|Less Personal||Do to all sales and feedback being online, the business needs to work to know it’s customers|
|Delivery Time||Due to the temporal nature of pizza, delievery is a crucial part of the business|
|Internet Uptime||The business is 100% reliant on an active connection between them and their customers. If ethier one goes down, so does that sale and possibly reputation.|
|Quality Feedback||All customers will likely see reviews of the store (as they are online anyway), so negative online reviews will have an enormous effect on the sales.|
So it is clear theat compared to a traditional pizza shop, there are many risks that could affect the business.
There are many reasons that a business might want to use this model.
|Less Costs||Reduces initial investment on property, less employees, less running costs.|
|Greater Quality||Due to the higher emphasis on the online reviews, there’s a bigger incentive on the quality of the product.|
|Better Online Presence||More focus on a web presence|
It seems that the main benefit is that the business it self is not costumer facing. So only the product and delivery service needs to be focused on, rather than the look and hospitality of business.
I believe this model would be ideal for businesses looking to franchise out in certain areas as all the benefits apply and most risks are mitigated; due to the established brand and reputation.
In the future I believe that many of these little online-only kitchens will exist scattered around highly populated areas. The incentives are high are running costs are low.
It may even be a market that could be led by chefs and delivery drivers themselves. Imagine if chefs could clock and in and out of work just like Uber drivers!
Thoughts? Let me know if I missed anything in the comments.