Inside LaRosa’s pick-up order strategy

​​This is the second of two stories about how restaurants are investing in pick-up windows. Part 1 explored “Chipotlanes.”

Domino’s has been known for delivery for decades. In 1979, it guaranteed that if pizzas didn’t arrive within 30 minutes, they’d be free. But these days, it’s not “bringing pizza to customers” that it’s promoting.

It’s bringing customers to pizza.

Struggling with the labor shortage, particularly with drivers, Domino’s is offering a $3 credit for picking up orders, calling those customers “carryout heroes” in a recent commercial.

But you don’t have to be Domino’s, the largest pizza chain in the US with ~6,700 locations, to get religion about pick-up. You can also be LaRosa’s, a Cincinnati-based chain with 65 pizzerias.

Pete-za: In 2016, a franchisee-owned LaRosa’s in Cold Spring, Kentucky—which is outside of Cincinnati—opened the chain’s first pick-up window, according to Pete Buscani, EVP of marketing at LaRosa’s. The franchisee acted of his own volition, and the corporate office didn’t quite know what to make of it.

“Everybody was all nervous because we didn’t have any procedures and we didn’t have any policies,” Buscani said. “And [the franchisee] said, ‘Relax. They’ll roll up to the window. If they don’t understand it, we’ll explain it to them.’”

So Buscani and the rest of the corporate office did relax, and the pick-up window was “fabulously successful,” he said. But LaRosa’s did not think much about adding pick-up windows to other locations.

Until a couple of years later, when a woman told Buscani that she didn’t want to put on pants.

Slice of life: Around June 2018, LaRosa’s had assembled a focus group of what Buscani called “younger millennials.”

“There was a particular mom—she had three children under nine,” recalled Buscani. “And she said in this weary voice, ‘You know there are days when I just don’t want to even put on pants.’”

She added she liked ordering LaRosa’s for takeout, but that rolling up with her kids in booster seats could be an ordeal.

“‘I can’t leave my kids in the car, so I gotta troop them all in,’” Buscani recalled her saying. “‘So now I’ve got kids that are squirming all over the place, and I’m waiting, and it’s just not convenient.’”

From focus groups, “we really got the message that for several groups of younger people, who are the ones that have the money to spend right now, pizza particularly…is something that happens in the home. It happens on the coffee table while we watch TV,” Buscani said.

That goes for more than just pizza, according to Darren Tristano, a restaurant industry analyst and CEO of Foodservice Results.

“The younger the generation, the more likely they are to be on-the-go consumers,” Tristano told us. “They’re not going to the restaurant to eat; they’re going to the restaurant to buy food and eat it somewhere else.”

Pizza de résistance: For its part, LaRosa’s decided to introduce pick-up windows—just pick-up, not order-and-pick-up—in some restaurants. And that plan became more urgent when the pandemic hit.

“If there was any way of getting a window in, we went to work to get a window in,” Buscani said. “There were places where I thought, ‘Well, they’re never going to do a window here.’ And they found a way, because not only was it a must, but people loved it.”

Seven of nine company-owned LaRosa’s have added pick-up windows, along with 13 of the 56 franchise-owned. Buscani expects three to five to be added this year but said many of the remaining properties would require major modifications or relocations, which many franchisees are considering.

The strategy is paying off for LaRosa’s:

• For 2023 to date, deliveries, the lowest-margin profit category for the chain, represent 42% of total sales, a portion about 5% lower than in the full year of 2022, according to the company.
• Over the same time period, higher-margin pick-up is up 1%, representing 35% of sales.

Pie chart: Bob Vergidis is the founder of The Point of Sale Cloud, which designs POS systems for all restaurant transactions, including virtual. Also based in Cincinnati, he’s worked with LaRosa’s since 2006.

He said the challenge for regional chains is that they’re competing head-to-head with deeper-pocketed national chains like Chipotle. So he needed to devise a pick-up ordering system for LaRosa’s that was as simple and elegant as Chipotle’s (which we wrote about last time).

Essential to the system he built for LaRosa’s, Vergidis said, is that through GPS, it recognizes customers’ locations to route them to the nearest restaurant, simplifies both ordering and payment, and keeps them posted with texts to let them know when their order’s ready.

Customers “expect to never be lost in the journey, to always know what happens next,” Vergidis said.