Dive Brief:

• Optimizing menus for delivery is key to driving strong off-premise sales, Uber Eats director of regional operations Bowie Cheung told attendees at the National Restaurant Association Show on Sunday. Cheung said this could be achieved through precise customization opportunities, photos that highlight signature and high-margin items and combo deals. 
• "The average user on our platform will pop in and out of several different restaurant menus before making their purchasing decision. That means you have to invest the time and energy to make sure that menu experience is a frictionless one," Cheung said. He told attendees that successful menus are typically between 15-20 items long and have clearly defined sections and customization options that reduce the opportunity for user error. 
• Restaurants should also avoid placing items that are loss leaders in-store on delivery menus because alcohol — which typically makes up for this gap — is challenging to offer for delivery in many states, Cheung said. 

Dive Insight:

Though a restaurant's delivery business is grounded in its brick-and-mortar brand, diner preferences for in-store meal experiences and ordering for at-home eating can be very different. Because of this discrepancy, Cheung said that it's permissible — and even a savvy marketing move — to create a delivery menu that's different from what's offered in-house. 

"Many of our restaurants that have been very successful since the early days have learned that they might want to have custom signature dishes that might not be the same dishes as the in-store formula," Cheung told NRA conference attendees. Part of these considerations should center on how well food will hold up in transit, he said. 

Third-party delivery also gives restaurants the opportunity to develop an entirely new brand and product suite through a second digital menu, or a ghost restaurant. For example, when Uber Eats noticed that there was demand for tacos in the Salt Lake City area that wasn't being met, the company reached out to partner restaurant La Tenoch to suggest they create a virtual restaurant to fill the gap. The eatery later launched South City Tacos on the Uber Eats app, Cheung said, which doubled its gross bookings on the platform. 

This model gives restaurants the chance to take a bigger bite out of the delivery market, which shows no sign of slowing down. Cheung said that 60% of restaurants report that delivery is driving incremental sales, and that in 2022 digital sales are expected to jump to $53.5 billion compared to a projected $30.6 billion for this year. 

Uber Eats has helped its restaurant partners launch close to 1,500 virtual restaurants in the U.S. and Canada, Elyse Propis, operations lead for virtual restaurants at Uber, told Restaurant Dive in a past interview.

Still, launching an entirely new virtual business isn't feasible for every restaurant brand and requires many operational adjustments. Less intensive menu changes can be costly as well. For example, 22% of operators report that value meals hurt their margins, according to research from TD Bank. Third-party delivery services as a whole can also be a drain on restaurant finances, but off-premise poses significant financial opportunity down the line. 

"It doesn’t matter what your demographic is … everybody is telling us that they are going to use food delivery more and more in the future. We're seeing this trend accelerate," he said.