Let’s Just Stay In
The Wall Street Journal has a fascinating series on “The Delivery Wars,” which I’ll get to shortly, but what makes me most interested in it is a concept I’d not previously heard of: virtual restaurants.
There will be a tie-in of both to healthcare, I promise.
Now what, for heaven sakes, is a virtual restaurant? It’s not, as you might guess, a restaurant in a videogame or virtual reality simulation where you might pretend to eat. It’s not even a restaurant making use of augmented reality (although those probably do exist). It’s not a place you go to eat, or where you go at all.
They are restaurants, and they do cook food, but they exist to support food delivery services, whose users don’t really care where they are or if they also serve food to in-restaurant patrons. NBC News recently profiled how Uber Eats using data on their users to identify what virtual restaurants are likely to be possible:
This is not actually a new concept. You can find articles discussing it two years ago, and by November 2017 Mashable reported that DoorDash, Grubhub, and Uber Eats all were featuring virtual restaurants. A virtual restaurant chain named the Green Summit Group started in 2013 and got a $1 million investment from GrubHub in early 2017.
By last fall Uber Eats had 1,600 virtual restaurant partners worldwide, according to Eater. Jason Drodge, the head of Uber Eats, described them to Eater as follows: “They’re restaurant brands located in physical restaurants. And the brand only exists on Uber Eats,” adding that they “don’t compete with their in-store menu, and so it can be completely incremental to whatever they’re doing in-store.”
Restaurant delivery services are becoming the tail that wags the dog. If valued alone, Uber Eats would supposedly be worth $20b, while Grubhub and DoorDash are each valued at around $7b. WSJ says Grubhub has 105,000 restaurant partners. They predict the online takeout ordering market will triple by 2022, to some $21b, and reach $31b by 2025. Another estimate puts the growth as going from the current $25b to $62b in 2022.
Keep this in mind: a third of all “restaurant” meals are now eaten at home.
It’s not only food from restaurants, of course. Online grocery services are predicted to go from $17b in 2017 to $86b in 2022. John Mulligan. Target’s COO, had this to say to the WSJ about such services: “From a pure relevance standpoint, you have to figure it out, because that’s how shoppers are going to interact with you.”
Both restaurants and grocery chains are relying primarily on third party vendors, such as Grubhub for restaurants and Instacart for grocers.
In something that healthcare would recognize well, the delivery services are seeking to find, and help create, “super-users,” who use their services regularly, even daily. WSJ says:
Food-delivery companies instead need high-frequency, repeat customers — driven by force of habit at least as much as by bargains — as rivals race to amass the widest possible user base before focusing on making each individual order profitable
It’s all about the data. Who lives where, what their dining preferences are, how to maximize choices and minimize delivery time. Get that right, then you win more users and start making them super-users. Get that right, and you can persuade restaurant owners to create virtual restaurants. Get that right, and all those growth figures look not only possible but perhaps even conservative.
Meanwhile, healthcare…
Healthcare has plenty of data, of course, with more on the way all the time. Unlocking all that data from their silos and figuring out what it all might mean are challenges that are recognized and being worked on. Big Data and A.I. are going to be the killer apps that make the data information that the healthcare system can use, hopefully to make us healthier and not just to wring more dollars from us.
But where is the healthcare app that is collecting and analyzing my health needs and preferences? Where is the healthcare app that is using the data to ensure I have the right sets of services nearby, even helping healthcare professionals and organizations create new types of services in order to meet them?
In other words, where are healthcare’s virtual restaurants?
I’m not just talking about more use of virtual care, although my feelings on that are well documented. I’m talking more broadly about data-driven products and services to target our specific needs and preferences, where and how we live. It’s happening for restaurants, it’s happening for grocery stores, it’s happening for online shopping, it’s happening for streaming content services. Where it is not happening, to any meaningful extent, is for healthcare.
How do we match our individual health needs with the right services and the right professionals, in the right places at the right times?
When it comes to our health and our healthcare, we like convenience. We like choices. We like affordability. We like quick service. We like high quality. But we can’t order those up, not like we can our favorite meals. Some would say, of course not, that’s like comparing apples and oranges (or, rather, apples and stethoscopes), but is that reality, or just tradition?
The NBC News report mentioned the issue of how virtual restaurants will ensure that healthy choices are offered along with people’s less healthy preferences, and at least that is something Uber Eats and others are aware of and can help address (unlike some current food deserts). We’d have to do the same kind of balancing to do a healthcare equivalent of virtual restaurants.
Look, I’ve never used a food delivery service. I like eating in restaurants. But when I hear about concepts like virtual restaurants, and start to understand the forces that are behind them, I get why they might work. And I can’t help but feeling there are parallels in other industries, even — or especially — in healthcare.
Virtual hospitals, anyone?
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