Delco model adoption, Rain clouds at Cloud and an NFT Marketplace. All these headlines and more represent our thoughts and views on the world of restaurants, technology and off premise food in our round up of the last week’s hot news stories - subscribe today to the Monday Minute and register at www.learn.delivery for more bonus content.
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TRANSCRIPT
Carl: The Delco model adoption, Rain clouds at Cloud, and an NFT marketplace. That's all ahead on this week's Monday Minute.
Monday Minute works like this. We're gonna ask each other five questions about headlines that have caught our attention about the worlds of restaurants, off premise and technology, and in some way tie back to our book Delivering the Digital Restaurant. Are you ready? Let's go.
Meredith: All right, Carl, the first question is for you - it was very cute, your clever intro talking about what's going on with all of these new models. But now give us a bit more: both Chilis and sweetgreen have opened what you and I would refer to as a Delco location. What exactly is that and what's going on.
Carl: Very interesting question, Meredith. For many, the answer to your question is, well, isn't a Delco like a ghost kitchen? And I guess in a way you could say it is in the sense that what it's allowing restaurant groups like Chili's and sweetgreen to be able to do,
is expand their reach without necessarily having to build out a 5,500 square foot full restaurant. Because a lot of these locations, in fact, the one that they reported was under construction back in August, over in Southern Methodist University is about 1600 square feet. And so it's enabling folks to be able to get access to Chilis in locations that perhaps before they weren't able to.
And be able to go and collect it for pickup, but also have it delivered from that location as well. So in that sense, it's actually addressing a similar benefit to what Ghost Kitchens are bringing to the industry, but it's doing it under one unit where actually customers can still come and visit those locations.
It's not like it's necessarily gonna be hidden off behind a, a factory somewhere. And you know, I think it makes a lot of sense. And when the likes of Brinker, who we know are very forward thinking in this space are doing it. I suspect it will be a model that we see proliferate across the industry in the years ahead.
Meredith: Hmm. Interesting. And so, based on your answer, I'm going to guess that Delco stands for delivery- carryout. So a focused off premise location.
Carl: There you go. And gosh, you came up with this term, I'm sure you should be credited with Delco. You've been talking about Delco for years.
Meredith: I just quote the smart people all over at Yum.
I think the first place I heard it was from David Gibbs.
Carl: Wow.
There you go, David. That one's for you. Alright. Second question this week, Meredith. Is it starting to rain at Cloud? Cloud Kitchens announced some layoffs this week, or at least Nancy Luna at Business Insider talked about it.
So is this the start of a perhaps down turn in the ghost kitchen market or perhaps just for Cloud?
Meredith: My goodness. You are just full of the puns today. . Hey, you're in a good mood. All right. So, yes, so cloud, according to this article is laying some folks off and I thought what was most surprising in this article is they said they were going to get to profitability by next year, which seems hard to believe.
But you know, they have a really big software business and if they slow down the pace of growth, which is usually what drives software companies into the negative, then maybe that's possible. But we will see if they achieve their objective here. I think it's just a reflection of what's going on in the overall macro environment with financing and funding availability.
And they, like many others, are starting to transition their company from a hypergrowth phase into a more sustainable one. As it relates to ghost kitchens generally. Does it signal any challenges there? I don't think so. I think it is merely the overall macro environment equally affecting everyone in the space.
Okay. So DoorDash, there's just add on features left and right now they're getting into reservations. Tell us about that.
Carl: Yes, this was first revealed by Kristin Hawley, who does a great newsletter called Expedite if you haven't seen it, it's all about restaurant tech. But DoorDash are getting into at least piloting in app reservations.
Ooh, watch out, Open table, Watch out. Yelp. Is DoorDash becoming a competitor in this regard? Now according to what Restaurant Dive talked about seems it's been appearing in the app for New York and Chicago consumers, although it's also appeared, I think, to a few folks in LA. So it's, it's been explored across the board, but this isn't DoorDash doing it alone.
This is a partnership that they're working on with Seven Rooms. So it seems to be powered by that kind of technology. And again, it makes sense, right? I think DoorDash wants to be the place where a consumer is thinking about food on any occasion, and if they think DoorDash, whether it be for food delivery or for pickup, or now perhaps for going out for dinner, then they want customers to think DoorDash first.
And so I suspect this will be quite a interesting one to monitor. Whether the restaurants are gonna be happy about it, whether the fees are gonna be competitive to what OpenTable offer, which of course also aren't necessarily always particularly welcomed by restaurants. Time will tell, but certainly DoorDash are continuing to power ahead and be in a force in our industry.
Meredith: Yeah. And in addition to being the one stop shop for consumers, all things restaurants, they make themselves into more of a one stop shop for restaurants who need all kinds of services. Right. It's a very interesting move for sure.
So, there's a Cornell professor who is starting to write about dynamic pricing. And Carl, of course, this topic is near and dear to your heart. So, I expect you have very interesting things to say about these articles.
Carl: I do Meredith, but this was your question that I was going to ask for you, You see. And so , I really appreciate you asking me to give you my opinion. I have plenty of opinions about dynamic pricing, but why don't we ask you first. What did Professor Kimes talk about with regards to dynamic pricing?
We're going to keep this in. We're not editing this out, by the way though. That is definitely staying in this week.
Meredith: Well, I thought what was most interesting about it is that she's starting to see a shift in how restaurants view dynamic pricing and how consumers of restaurants view dynamic pricing. I think she, like we, have heard from people in the past, Oh, you know, dynamic pricing works for airlines or hotels, but it, it won't work in my industry.
Whatever, fill in the blank industry is and in particular, restaurants. And I've always thought that was a little funny because first of all, restaurants have been doing dynamic pricing forever in the form of things like LTOs and blue plate specials. They just weren't called dynamic pricing, and they didn't go into place digitally, they were a little bit more manual. And then secondly, the platforms themselves are already using dynamic pricing in the form of manipulating the delivery fee in an effort to move around and smooth it out demand. So, I always thought I was quite curious that anyone would say it will never work in restaurants because it already is.
And it would seem that that is what Sherri is finding, that there's starting to be a change in attitudes as people are realizing an incredibly peaky business needs a way to sort through its demand. And maybe that way is dynamic pricing.
Carl: We were on the Medallia Sense 360 podcast a few weeks ago, if you recall, and they did a survey about it, and they said 73% of the 2000 folks that they interviewed actually liked the idea of it.
But I think Sherri went into a bit more detail in the sense that it's about giving consumers choice. If consumers really, really want to order for a restaurant that's particularly busy and they really want that particular dish at that restaurant, then they might be willing to pay an extra 50 cents for it.
But similarly, for those customers that perhaps might be a bit more value orientated, maybe there are times of day where they know that they can get , that same food item, perhaps a little bit less, and I think the world of dynamic pricing clearly is ramping up. It's been all over our world at Juicer for the last couple of weeks in terms of social media references, which is, which is great.
Saves on the PR budget. Mm-hmm. But it, it's also great in the sense that there are lots of restaurants asking about it. So I think we're moving away from. Is it coming to, When is it coming and how is it gonna come to restaurants? But also the fact that this idea of the consumer acceptance, I think restaurants are realizing that consumers are more likely to accept it perhaps better than some of the initial naysayers.
So time will tell. Alright. Well, Now I get you to ask me the question this time, this time, if that's okay. And I'll give you an answer just, you know, how this works. We've done this for over a year now.
Meredith: Yeah. I know. This question really is for you, Carl. And you can tell because it's about NFTs and no one wants to hear what I think about NFTs.
So an NFT marketplace for restaurants called the NFT table has shown up. What does
that mean?
Carl: Yes, you keep on asking me these questions. What does this mean when on the world of NFTs? I'm talking at the Global Restaurant Leadership Conference in Dubai before our next episode, and I'll be talking about the elephant in the metaverse.
And part of that discussion is going to be about NFTs Meredith. So unfortunately you won't be there. You'll be on another conference knowing you. But I will try and come back with more notes for you. This particular one I picked up from Matt Newberg's newsletter. And NFT table is a Solana based, which is a type of crypto, marketplace where people are able toauction off reservations at restaurants. There's one he mentioned Tom Colicchio's Craft in New York City, by way of example. And it the NFT table, the actual NFT token entitles folks to be able to get access to a, prime table like that at a particular evening each week.
This is a little bit along the same lines as Fly Fish and Gary V's Initiative. The first auction, to give you an idea was around was just over $4,000. So this isn't something that is cheap. This is actually something about getting exclusive access to the best dining locations and probably a bit of boasting rights I suggest for the, the rich and elite amongst us.
But it does go to show again that these NFTs can be a mechanism to draw attention and obviously also be used in a way that even if you can't attend a particular week, then you can actually use that same marketplace on the NFT table to sell that opportunity to someone else, and then it gets auctioned off again.
So in that regard, it's quite a compelling concept. I think it's kind of interesting, clearly very niche in its area of adoption. And I think more broadly, just to come back to your question about NFTs, I think NFTs are probably going to be the representation for the future of loyalty and loyalty programs.
But perhaps we'll cover that on another edition. All right. Well, you've still got that blank look across your face, so I don’t know whether that helped. We'll, we'll have another swing at another time, but if any of you have got your views on NFTs the Metaverse and helping Meredith get to grips with it, please put your comments below.
Any other questions, any comments about today's edition, we'd would love to hear from you and of course, if there's anything that you would like us to focus on on a future edition. Please send it across to us info@learn.delivery. But until next time, thanks for listening and appreciate your time.