Why Can Burger King Do Mobile Delivery Where Its Rivals Can't?

Burger King (NYSE:BKC) said last week that it's expanding its mobile ordering and delivery service to Minneapolis and Spokane, which makes a total of 15 U.S. cities where the burger chain is doing something that simply shouldn't be possible according to conventional wisdom.

The added restaurants that are doing delivery will offer the same limited 13-item menu as the nearly 100 stores already offering the service and require the same $10 minimum order. And at this point, even Burger King's rollout of the new stores is pretty mechanical—it's actually recycling press-release statements and using existing stores that do delivery to train staff for new stores. This is past the new-idea stage and well into the standard-operations zone.

But none of it should be working in the U.S., at least outside neighborhoods in Manhattan where you can expect to have anything delivered. This isn't pizza or Chinese, categories where food is made to order. This is classic drive-through food, and the fact that Burger King has managed to make U.S. delivery work in less than two years may have more to do with the mobile component than anything else.

To be clear, burger chains including Burger King and McDonald's (NYSE:MCD) have been doing delivery outside the U.S. for years. The experience is there. But inside the U.S., McDonald's only delivers from a handful of New York City stores, and Burger King only started testing deliveries in several Washington, D.C., suburbs in January 2012.

Since then, McDonald's has thought about expansion—its CEO, Don Thompson, said in April that it's testing in U.S. cities he wouldn't name. Meanwhile, Burger King has plowed ahead and refined its model. Limited selection is part of it, since only offering items that make the trip well is part of what goes into engineering the service. So is keeping tight track of delivery areas—they don't have to be dense urban areas, but they have to be dense enough with likely customers (including college students) to make the service profitable.

But mobile ordering may be the most crucial element. Mobile has arguably become the new drive-through—order anytime, with delivery replacing a short trip in the car and impulse items as the high-value targets. At a time when U.S. retailers are gingerly trying to figure out how to make same-day delivery viable, this same-hour delivery model may be one they should be stealing from.

For more:

- See this Puget Sound Business Journal story
- See this Burger King news release

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