What’s the point in dining out when we can have whatever meal we crave delivered to our homes as we watch movies on our giant flatscreen TVs?

Credit Netflix and Amazon for shifting consumer habits in a way that is significantly affecting the restaurant industry.

[source: Forbes] Consequently, statistics in support of off-premise dining are staggering – 86% of consumers are using off-premise channels at least once a month, and a third of consumers are using it more than they did a year ago, according to Melissa Wilson, principal with Technomic, and reported by Restaurant Business Online.

A recent study conducted by CHD Expert shows that restaurant brands are pushing down the accelerator in these channels:

• Takeout for pickup is projected to generate $124 billion in sales this year
• Takeout with direct delivery from a restaurant: $32 billion
• Takeout with delivery from a third-party delivery company: $13 billion
• Catering for pickup or delivery: $40 billion

Most restaurant companies are chasing these trends simply to keep up with quickly changing consumer demands.

“As the industry evolves to meet the needs of consumers who are accessing virtually everything through Amazon and Google, we’ve found it vital to partner with third-party delivery services to stay relevant and competitive in today’s hyper-competitive marketplace,” said Blythe Grates, senior marketing director at Firebird Restaurant Group.

Off-premise, Grates adds, is a necessity to gain share as trends shift away from dining out.

“Part of the stay-at-home movement is due to the prevalence of in-home entertainment, as well as the Amazon effect – where virtually everything, including food, can now be delivered – grocer innovations like curbside pickup and delivery, inflation and the ‘home cooking’ trend spurred by HelloFresh, Blue Apron, Plated and others,” she said.

Firebird has driven its off-premise sales through promotions such as free or $1 delivery to coincide with food holidays like National Taco Day.

“On these days, we see approximately 4 to 5% of sales driven by our delivery service,” Grates said.

Paul Mangiamele, owner/chairman and CEO of Legendary Restaurant Brands, says such incremental sales growth comes at a price, but may be worth the potential gain in market share.

“We know that every incremental dollar in delivery is a dollar not going to a competitor,” he said. “In these competitive times, off-premise is certainly an area to gain market share. It’s a reality of growing business.”

Fazoli’s has spent the past two years investing in its drive-thru, carryout, catering and delivery businesses. In addition to online ordering for catering, Fazoli’s has also integrated an individual online ordering system and third-party delivery and has launched a new loyalty app aimed at making carryout orders easier. According to Jennifer Crawford, director of off-premise sales at Fazoli’s, these initiatives have paid off so far – off-premise sales are up 18.5% over last year for the company.

But, she notes that sales aren’t the only benefit to prioritizing these channels.

“Off-premise is a great opportunity to communicate and connect with a new consumer segment,” Crawford said. “Many of our off-premise guests have not dined in a Fazoli’s or experienced our menu. With options like third-party delivery and online ordering, we have the capability to tap into potential new guests.”

Some challenges persist

Sales lifts and new customer potential are strong incentives to be sure. But that doesn’t mean implementing off-premise channels comes without challenges. Crawford said a big one is the lack of control and maintaining the guest relationship.

“When a guest dines in, we can provide a level of service that enhances the consumer dining experience,” she said.

That lack of control extends into the digital experience, as third-party apps can also be an issue.

“Orders are not often processed properly due to the drop-down menus and default orders in third-party software, as opposed to when a guest gives their order in person, which gives the operator a chance to ask questions about details, like desired temperature of a burger or ingredient substitutions,” Grates said.

Grates adds that staffing issues can also arise when heavy delivery periods overlap strong in-restaurant traffic and maintaining food quality and integrity during drive time is tricky with certain dishes. The latter issue could even defeat the purpose of initiating delivery at all, Mangiamele said.

“Delivery is an expensive proposition and must be studied thoroughly before implementation,” he said. “The juice has to be worth the squeeze.”

Crawford believes that squeeze is very much worth the effort.

“Across the industry, dine-in traffic continues to decline or remain flat. If brands are not driving sales through catering, carryout and delivery, they are missing out on revenue,” she said. “Delivery and technology are key drivers to the stay-at-home economy. Brands have to make off-premise a part of their plan to survive in this ever-changing consumer landscape.”