ShiftPixy Reacts to Covid-19 by Helping Restaurants Keep Their Delivery In-House
What trends or changes are you seeing as a result of Covid-19?
Restaurants across the country are either closed temporarily or permanently, or are offering limited, off-premise services because of Covid-19, resulting in substantial layoffs for foodservice workers. Data from the Bureau of Labor Statistics showed that of the 20.5 million U.S. jobs lost in April, 5.5 million were taken from the restaurant industry. Once businesses begin to open up as stay-at-home orders are lifted, many restaurants will have the costly, time-consuming job of finding an entirely new roster of employees. In the meantime, many furloughed restaurant workers will remain unemployed.
As brands wisely ramp up their take-out and delivery services, understanding it as their only source of profit, we're seeing a growing reliance on third-party delivery companies. With much of their staff laid off or furloughed, restaurants today are leaning on these services to get food to the end-consumer, regardless of the negative repercussions of the partnerships, including unfair fees and loss of brand control.
As the lockdowns started, many of the apps offered free delivery as a way to show their solidarity. However, restaurants have complained that these measures only help consumers, and do nothing to reduce the costs to restaurants. While there is no doubt that many restaurants were concerned about the high cost of using the delivery apps well before the crisis unfolded, we are also seeing a rising concern that these apps, approached as partners at the beginning, were in fact competitors. The relationship between the restaurant and consumer was now being transferred to the app and consumer.
How is Covid-19 affecting your business?
Restaurants relying solely or primarily on their off-premise services are beginning to understand why it's important to use their own employees to facilitate delivery for the sake of their brand, customer engagement, and profitability. In contrast to restaurants depending on these external ecosystems (and potentially being left with very little residual or remaining knowledge or benefit of partnership), ShiftPixy is enabling a digital transformation where the restaurant is in control of the last 30 feet of the customer experience. A lot can happen between a restaurant and the customer's front door, and it can be difficult to capture the quality of the final, delivered product. Our "native delivery" strategy allows a restaurant to capture guest feedback and, more importantly, ensure food quality and safety. Our team of customer representatives is working hand-in-hand with restaurants to get their native delivery operations up and running immediately. We understand the urgency and digital demands of this pivot and are helping restaurants to quickly repurpose their employees to avoid their reliance on third-party delivery.
What are you doing to help your franchisee customers?
To succeed in today's environment, restaurant leaders must maximize the human aspect of their business like never before. Labor, their greatest expense, should also be their most profitable asset, but in most restaurants it is not. Turnover is crippling the industry as many customer-facing employees have not received the training or development needed to ensure successful customer engagement. With restaurants depending on repeat business for survival, curbing turnover must be a priority. While the causes of turnover are widely debated, we have identified a direct link to the growing gig economy. More than 68% of the restaurant workforce is made up of Millennials and GenZers. The ideals of flexibility, independence, and convenience are predominant factors when this group is looking for an opportunity to work, and as customers, to order food digitally and have it delivered to their home or work.
Our technology and team can enable a digital transformation that allows restaurants to tap into this growing convenience economy without surrendering their profits, data, or customer experience and relationships. This can happen within 48 hours and at no cost to set up, restoring profits for the restaurant and allowing them to regain control of their prized relationship with the end-consumer. We also are taking this a step further, working with restaurants to create branded flyers that can be delivered to a consumer's doorstep or mailbox. With communication limited, restaurants must get creative to let the community know they're open for business.
So rather than laying off or furloughing restaurant workers during the crisis, operators can repurpose them for tasks that mesh better with the current situation. For instance, a former waiter or host can begin packaging takeout orders, delivering promotional flyers to the community, or delivering food directly to customers' front doors. Normally there would be risk and liability associated with using employees to deliver. Our approach of creating a co-employer relationship allows a restaurant to remain in control of employment, but able to transfer the consequential risk, liability, and compliance of being the employer to ShiftPixy. Each delivery driver is covered under our hired and non-owned auto (HNOA) coverage for each delivery they take out from the restaurant.
Are your customers changing what they're ordering or cutting back?
Lockdowns across the country from Covid-19 have opened brands' eyes to some major problems plaguing the industry, particularly those related to staffing and delivery. Restaurant operators are now urgently and aggressively trying to reevaluate their operations to keep their doors open. Our two-pronged solution was designed to address the common pain points operators face with a single solution, and we are seeing a positive reception from operators looking to move quickly to switch over to native delivery. We are working tirelessly to facilitate that and are continuing to host hourly demonstration conference calls with brands. Given the current environment, it's no surprise we're seeing more restaurant clients who were already using our employee-sharing functionalities also expressing interest in our driver management platform.
Are your customers requesting special payment plans, deferrals, or other accommodations?
Implementing our solution requires no investment from the restaurant and is an all-in-one solution that can be running functionally in just 48 hours. Restaurants that use the platform have access to its employee-sharing capabilities, AI-driven scheduling, white-label ordering platform, driver management capabilities, and more. It's no secret that many restaurants are struggling financially in this crisis, so we are waiving delivery fees to incentivize consumers to place an order.
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