Ever bite into a pizza puff and think, "Is that it?" Tyrell Reed here, from the Pizza King Podcast, and I'm getting real with you about Little Caesar's new Crazy Puffs—they didn't quite cut the mustard with me. But fret not, dear listeners, because this episode packs more flavor than a stuffed crust, with a deep dive into the pizza delivery scene. We're talking the nitty-gritty of navigating those delivery waters, whether you're a fan of the gig economy giants or rolling with an in-house fleet. And for the pizzeria entrepreneurs tuning in, you'll get the lowdown on how to stay afloat in this mozzarella-rich, competitive market.
Buckle up for a slice of wisdom as I spill the beans on the Uber Eats/DoorDash dilemma. It's a game of percentages and partnerships, and I'm lifting the lid on how this delivery giant fits into our very own pizza paradise.
Ever bite into a pizza puff and think, "Is that it?" Tyrell Reed here, from the Pizza King Podcast, and I'm getting real with you about Little Caesar's new Crazy Puffs—they didn't quite cut the mustard with me. But fret not, dear listeners, because this episode packs more flavor than a stuffed crust, with a deep dive into the pizza delivery scene. We're talking the nitty-gritty of navigating those delivery waters, whether you're a fan of the gig economy giants or rolling with an in-house fleet. And for the pizzeria entrepreneurs tuning in, you'll get the lowdown on how to stay afloat in this mozzarella-rich, competitive market.
Buckle up for a slice of wisdom as I spill the beans on the Uber Eats/DoorDash dilemma. It's a game of percentages and partnerships, and I'm lifting the lid on how this delivery giant fits into our very own pizza paradise.
All right, there we go, we live. We're just going to get right into it. Pizza of the week this week was actually Check that. The smart thing to do is to tell you what you came here to listen to, what we're going to talk about, and then you decide from there if you want to stay. We're going to talk about pizza. That's what we do. Pizza of the week. We're going to talk about my one business building tip or whatever. That's going to talk about pizza. That's what we do. Pizza of the week. And we're going to talk about my one business building tip or whatever that's going to be. But we're going to talk about delivery this week. Should you deliver? Are you delivering? How has delivery changed the pizza business? And then I'm going to give you a team building tip at the end. So if you got 25 minutes 30 minutes to spend with me, let's get right into it.
Speaker 1:
Pizza King Podcast. I'm your host, tyrell Reed. Let's go. Pizza of the week was a good one. I say that every week, right? Pizza of the week was a good one. Actually, it wasn't that good, if I'm being honest.
Speaker 1:
You know the world's been all up in arms over this crazy puff, pizza, puff, whatever. The Little Caesar shit. Right, the pizza cup or whatever it is. They call it a puff, the pizza puff. So the world's been all crazy about that. Saw an article on USA Today that said that this thing and I'm going to pull it up right here, so I so, for context, it said that this thing was the greatest thing to hit the pizza business since no, I need to pull up the quote exactly Crazy puff. I'm going to look it up Because I don't want to misquote it, because the shit was outlandish to me. The headline says Little Caesar's new Crazy Puffs menu item has the internet going crazy. Is it worth the hype? But the line that got me was it said it was. At the end it said the Crazy Puffs may be one of the best things to hit fast food hit the fast food scene since sliced pizza. According to the Internet I don't know who's the Internet repurposing their classic pizza to make it more portable May not seem groundbreaking, but according to the Internet, the crazy puffs may be one of the best things to hit fast. Hit the fast food scene since sliced pizza. That's heavy, that's a, that's a bold statement, right? Slice pizza like all the all the things that have come, since sliced pizza. This is the one, this is the. This is. This is one of the best so I have. I Caesars.
Speaker 1:
Naturally, I had to go to Little Caesars and try it out, so I ordered a couple. They come cheese or they come pepperoni, so I ordered one of each. They come, I think, like a four pack. So I got eight of these puffs and took them into the store so we can try them and it tastes like little Caesars pizza. So why is the internet going crazy over? Why is the internet going crazy over trash ass pizza? Like, seriously, come on now. So we tried them and threw more than half of them in the trash and decided to just make our own and ours.
Speaker 1:
Not that I did that so we can make a video and it was a good content, but we also did that because that's what we do, like we see things, we, we, we want to see if we can do it, if we can make it better, and we're just make it our way, not make it better. I hate to say make it better, cause we're not. Look, I'm not competing with little Caesars on taste, quality, presentation, selection, you know, collection of offerings, things like that. I'm competing with Little Caesars for customers dollars in my market? Yeah, of course, and I ordered it from a Little Caesars that's less than two miles from our restaurant, so I am competing with them for the attention of the customer to a certain degree, but the Little Caesars customer and my customer are not the same on a certain level, I guess. In general, yeah, a pizza eater is a pizza eater, but I'm not selling $5 pizzas.
Speaker 1:
So I wanted to know what the listeners thought about that. Have you tried it? Do you agree that this was groundbreaking? And then, once I did it and I posted that video, people started sending me other videos of people who had been making similar things. I saw somebody did one that was like chicken Alfredo. That shit was dope. I seen, obviously I seen, you know, people just doing the cheese, doing the pepperoni ones. A lot of people you know wanted to see me do oh, let me, you know if you do one with steak or did you do one like this, like so? There's so many different ways to do it.
Speaker 1:
I'm not interested in doing it because, honestly, and if you see, if you read about it or see any of these things, the people who were the team, the Little Caesars teams that were making these things while they're going viral. They hated it. They hated it. My little brother, chris, runs the Little Caesars in Michigan. He's a GM and I've seen some of his posts. He was like to hell with these crazy puss Because, you know, the Internet did go crazy on it and I guess that's the other side of things, even though I thought they were terrible. It really don't matter. It doesn't matter what I think, because if the internet says, go get it, little Caesars won because they sold a ton of them and still selling them Maybe it's the $3.99 price point has it going out the door like that? I guess, and I'm guessing they decided to.
Speaker 1:
You know they added it to be more like an add on to a pizza, but it almost has become a pizza replacement. When you can get these things for three, 99. Um, you gotta be super profitable for them, because it's literally like the tiniest piece. I mean a small, a little. I mean you see me super profitable for them because it's literally like the the tiniest piece. I mean a small, a little. I mean you see me, if you've seen the video, you see me make it a little piece of dough, maybe ounce, maybe a half ounce ounce of cheese, a dollop of sauce. It was nothing too pepperoni in it, like it didn't cost anything to make it, so they had to be killing it from a food cost standpoint. On getting these things out.
Speaker 1:
Um so is it genius or is it the? Is it genius or is it the the just the hot for the moment thing? That's what. That's what I want to know. I think it's. I think it's genius on some level. I mean, however, I feel about the quality of it. I think it's. I think it's genius from a business standpoint.
Speaker 1:
Um, so would you try it? Would you add it? Would you do a similar version or something like that? Do you already have something like that on your menu? Um, I think that would be really pretty cool to find out who's who's doing it, who's who's tried it. And you know, because it's it's not original. You know, people have been doing things like this for a while. You know with pepperoni rolls or you know whatever. There's always been different forms of of pizzas. So even like the little remember the little bagel bites. I don't know if they do, they still sell that in the grocery store. The bagel bites I don't know if they do, they still sell that in the grocery store, the little pizza, bagel things. That's what it reminded me of when I first seen it. Um, but yeah, genius on their part, in my opinion. Genius on their part. Trash ass product. Genius, genius business move.
Speaker 1:
What I wanted to talk about today was delivery and how delivery has changed our business over the last 10 years. I think we're in an environment, in an operating environment, where we are no longer it's going to be. It's got to be hard for folks who don't deliver to survive, and I'm not saying that it means you have to deliver. I mean there's got to be hard for fast food and fast casual places to not offer delivery and survive. Fine dining, casual dining I think that's obviously a lot of those places do deliver. But if it's, you know, for this experience, experiential thing, and people are still packing out dining rooms and I get that, that's a different, that's a different business.
Speaker 1:
I'm not in that business but for folks who are like me in the in the fast casual, in the fast food space, delivery has become like this critical, critical, critical component of the business Right Sales, critical sales component of the business. Right the sales, critical sales component of the business. Convenience is everything these days. So if you're a new pizzeria and you're opening up and you're thinking about delivery, I think there's so many ways to do it now it's got to be a little bit overwhelming to think about from the beginning, and and that's what I wanted to talk through here today was like you know the things that you need to consider when deciding on not if, but when and how you add delivery to your business, cause I think you got I don't know if this is a, I don't know if it's.
Speaker 1:
How do I put this? There's no question on whether you should or shouldn't deliver. Deliveries is the easiest way to reach your customer at this point. Right. The question is how? How should you deliver? How should you deliver? Meaning, should you offer a first party? You know first party delivery, third party delivery Are you, are you interested in? You know third party or delivery as a service? And you know like a, an outsource delivery company, not just like a third party platform, and so there's a few different ways to get into the delivery side of things. Are you somebody like Slice or DoorDash or Uber Eats? How are you going to attack that?
Speaker 1:
When you look at the delivery, the delivery business, and how it has changed. I saw a stat the other day that in 2015, I think I think it says something like and I don't have it in front of me, so I'm just I'm just kind of paraphrasing, or anyways so there was a stat and I don't know. I don't know exactly what it said, but it was something to affect to the effect of in 2015, there was, let's say, $10 billion in online delivery revenue and I think it was about Revenue and I think it was about 20 million or 30 million third party delivery app users at that point. And in 2020, that those both of those numbers more than triple Revenue. Online revenue went crazy. This is this is the effect of the pandemic, right, all of the revenue went crazy. Once everyone had to stay home, delivery revenue went crazy. App users tripled. It went from 20, 30 million users on third-party apps to 100, 150 million users of online third-party delivery softwares like Uber, eats, doordash, grubhub, stuff like that.
Speaker 1:
So what that meant was a lot of folks in the business had to change their business and catch up quickly. Now, it was great in the beginning for pizza, especially folks that were delivering. That first year 10, 12, really first 14, 16 months of the pandemic was gravy If you were already set up for delivery and you had a small operation that could be lean and mean and you could take orders, or you already had a platform for taking orders and delivering without contact, like contactless delivery, if you were ready for that. Killing it, killing it, and we were up. And we were up. Third party was was going crazy. Of course, that's when we, all you know, finally bit the bullet and decided to sign up for the Uber Eats and the DoorDashes of the world and revenue was crazy, going crazy on all of those apps.
Speaker 1:
But on the back end, those guys weren't satisfied with picking up, with just picking up. You know our business. They made it easy for everybody to gain entry into the delivery world. So then. So then you're competing with the gas station, the 7-Elevens, the Wawa's, the you know the Dunkin Donuts. Every, every, every restaurant is now on the platform, so you're competing with them all. So then there's a there's been a sharp decline in in revenue because the market is just super saturated with delivery business. We're trying to find ways to transition from third party to first party delivery by improving our experience, transition from third party to first party delivery by improving our experience right, giving the customers more rewards, you know, tightening up on our, on our radius and making sure we can service it, you know, more quickly, or offer, you know, something that's an alternative to all of the fees that you're paying on on these platforms, because it's it's heavily loaded with fees, right, and it costs a lot to the lot to the restaurant to do it.
Speaker 1:
It seems like the only the only folks making money are the folks that don't do anything. And why? That's just me? I don't, I don't want to, I don't want to get in trouble for that, because we, you know, we do have partnerships with these folks, but with these, with these providers and with these companies, but that shit just don't seem right. The, the tech company that has nothing to offer, but the platform makes the most money. Make that make sense. But that's a whole. That's a whole other discussion to have.
Speaker 1:
But if you're, if you were, somebody who opened during that time and you didn't open with, didn't open with your own first party delivery and you had to rely on these services, what is it like for you right now? Because it probably opened up pretty well? And now, what does that? What does that look like? Are you profitable? Are you seeing year over year increase in sales? Are you picking up new business? How are you retaining? How are you retaining that?
Speaker 1:
Because, to me, the downside of working with these guys is that you have no, you have no data. You get data, as like you get sales data, but you don't get customer data and demographics and things like that. So you don't get to market and retarget these folks without continuing to pay a commission to the platform. Oh, we can do. They'll do some marketing for you, but that doesn't change your fee structure, so it just costs you. It just ends up costing you more dollars.
Speaker 1:
Excuse me, we were looking at a report the other day, just looking at our first quarter sales from Uber and when you, when you break down what we spent in commissions and, and to be transparent, we have an exclusive deal with Uber to, you know, for a favorable commission, so we pay. If you sign up for Uber, your commission is probably going to be somewhere 30, 35%, so we pay 20, 20% or 21%, but as part of that exclusive agreement, we have to commit to at least 3% back in marketing and you always end up doing more. So, however it works, when it was all said and done. Uber collected 41% of our sales between fees and commissions and marketing dollars, and we retained 59. That's not like, that's crazy.
Speaker 1:
And we don't have any of that customer data. We don't have them. They're not on, they're not in our, in our loyalty program. They're not on our email list. I don't get to do any, you know. They're not on my text list, so I don't get to reach these folks. And that's to me, that's the most valuable part is getting that data. The most valuable piece, the most valuable thing is the customer data, because that gives you the ability to continue to continue to market to these people, to these customers, to these guests, to these customers, to these guests. So you don't get that that's, that's a challenge for me. So we're actively trying to find ways to pull people away from those platforms and onto ours.
Speaker 1:
But we had to fix and we're still working on some of these things. We had to fix our ordering experience and making sure that our, our loyalty is, is is clear and understandable and and valuable to the guests to get them off, because otherwise they'll just, they'll just stay right there. We had to have a shift in mindset and look at the third party platform as more of a an introduction to a customer or market, or more as a marketing expense than a revenue driving platform. It's not something that drives revenue for us. It's something that helps us drive first-time orders and gives us the opportunity to pull them off and come back to us for that repeat business. Not an easy thing, not an easy thing, and if anybody knows the best way to do that, let me know, call me. Like, call me because I want to talk about it and I want to figure out what the best practices are for for pulling people away from the platform as as repeat and return customers loyal customers, I think for you know, I wanted, I had a list of a couple of things I want to talk through, the first one being you know just, should your pizzeria offer delivery, first party delivery or third party delivery?
Speaker 1:
The first thing says things you know on the things to consider list. The first thing is location Like is your? Is your location in a, in a deliverable area? Meaning every trade area isn't necessarily deliverable, meaning your, your delivery business may be. And when I say your location in your trade area, like what does that two mile radius look like? Is it? Is it? Is the population dense enough. Do you have the right amount of businesses and opportunities for delivery and for customers to truly service that area, or are you in a remote location that doesn't have people around you to deliver to, or where people come to you? No-transcript is my delivery customer is not near me. I can't service it. I can't staff this place to do that.
Speaker 1:
If folks still want to to get our want to experience our restaurant or our food, folks still want to to get our want to experience our restaurant or our food, the best thing to do is for them to order through this third party platform. That could be. That could be it. So you know it's third party to answer. What does that? What does that look like? Negotiate that, and I only tell you what my rate is, because that that should just let you know that there is room for negotiation. When you talk to whoever these account managers are, when they try to set you up and sell this, do not be ashamed to negotiate. Tell them look, I know that there are folks out there getting a better rate than that. What do I have to do to do that? So it's their third party could be the answer for you. But then there's a. There's another piece that I wanted to to talk about, which is uh, das, uh DAS.
Speaker 1:
Delivery as a service, meaning folks, you, you first party orders come through you but are delivered by third party, and I'm a big fan of it because it helps solve two of the two problems, meaning the cost of bringing on uh, you know staff and training, and you know bags and replacement costs, and you know wasted labor and keeping people productive during non-peak times. So that becomes something that is one of the best things that I've seen come up in the last couple of years, which is delivery as a service. We use DoorDash drive, but Uber also has a product called Uber direct. No, we use DoorDash driving, but Uber also has a product called DoorDash or, excuse me, we use DoorDash drive, but Uber also has a product called DoorDash or Uber direct. I don't know why I want to call it DoorDash direct, it sounds better, but Uber Direct, where order comes in for you first party order, meaning on your platform, on your app, on your site, over the phone, at your place, and then you can dispatch a third party driver to deliver that to your customer. To me, that's the solution, that's the best of both worlds, for a fee, of course, and I don't think that it always, you know, transparent.
Speaker 1:
We pay a fee every time we dispatch a DoorDash driver. It costs us $7. We charge the customer five. So, truly technically, it costs me $2 to dispatch a delivery through DoorDash. It cost me $2 to dispatch a delivery through DoorDash and it's all integrated into the POS. So it's not like I have to jump through a bunch of hoops. It's just as simple as dispatching the delivery with one of the drivers that's on the clock in my place. So we offer first-party delivery and we also have a delivery as a service model with DoorDash Drive and, of course, we still have all the third parties. So we're actually doing all three and, in my opinion, the delivery as a service is gaining.
Speaker 1:
Now most of our deliveries go out first party with our drivers our order, our drivers taking it, with our drivers, our order, our drivers taking it. We use DoorDash as a, as a backup, but it helped us solve some of the hiring problems that we were having with drivers. Now we got some great drivers that have been with us for a long time, but it's hard to find new people you know that that come in and they fit they, they fit into the culture and you know they, they're, they're, they're qualified or they're going to stick around. I mean, it's different. The hiring pool is different nowadays. So having that service really allowed us to to focus on just taking care of the core team.
Speaker 1:
So I would I would encourage you to check it out. All right, team building tip for this week and then I'm going to get out of here is actually a tip for delivery drivers. If you decide that you're going to bring drivers in Nice tip for you is how to keep those drivers productive during off peak times, because that's where, as an operator and an owner, you start to see where is this labor going? Like what, what am I doing? Can I afford to have these people here? This is off peak time, or maybe we don't offer delivery until four o'clock. Look, keep, keep drivers busy, give them you know, make sure that you have clear expectations and goals for non-delivery time. So there's, you know there's a lot of time where drivers are tossed into productive roles when they're not delivering pizza. So you gotta, you gotta, find out what that is.
Speaker 1:
But my piece of advice actually was something that my dad gave me and it wasn't related to delivery, but when I was, it must've been 16, 17,. I got my first car, this old beater. It was a 1986 Pontiac 6,000. And that shit was beat. It was all rusty it was, it was a mess. Loved it though.
Speaker 1:
But my pops told me me and he worked on cars and he was always he's always, he's been always been real handy and things like that and he said look, son, you want this car to treat you right. You're going to have to treat it right. You want this car to run for you and start for you. You're going to have to take care of it. And here's what I'm telling you. I'm like what you mean? I'm like I don't know how to fix anything. He goes don't worry about all that, I can fix anything on this car. He said wait, if you keep those tires clean and you keep those windows clean, this car will always start. You keep your tires clean and you keep your windows clean, this car will start for you.
Speaker 1:
And I took that to heart and I kept the windows clean, kept the tires clean, put some little hood caps on it. Used to get clowned because I had the chrome caps on the rusty car, but it always started for me. It always started, and I think I even passed it on to my little sister because it was reliable. So that's my advice to you for your drivers. And I say and I tell this to my drivers when I'm in a shop, this is one of my, you know, always got my little philosophies and my things I like to teach. But I tell them the story about my dad, you know, telling me to keep the tires and the windows clean. And I tell them and that's the same thing in this restaurant and that's how important you are to our customer experience If you want to help us keep our customers happy, you got to keep our tires and our windows clean.
Speaker 1:
And what's? Our tires and our windows, our tires and our windows, our floors, our windows and our trash cans? We keep our floors clean, we keep our windows clean, we keep our trash cans empty and looking neat. Then our customers will appreciate what we do and they'll love us for that. So that's my advice to you guys. It's like keep your floors and your windows clean, keep your, keep your tires and your windows clean and your and your car will start and your customers will be happy if you take care of that restaurant. So cleanliness is the key Neat, clean, organized. Take care of those restaurants. But that's all I got this week. Pizza King Podcast. Holler at your boy, see ya.
