The coronavirus pandemic has shaken the restaurant industry as we know it. Call it a pressure cooker in a business that was notoriously breakthrough, even before lockdowns forced operators to get creative just to stay in business.
Across the country, diners have seen many of their former vigils going out of business, unwilling or unable to innovate. And we’ve seen survivors across the country embrace digital menus, self-serve orders, QR codes for payment, deliveries and curbside pickup. They have forged difficult alliances with aggregators like Uber Eats and Grubhub. The expression “ghost kitchen” entered the lexicon.
Restaurants have become wiser, smarter, leaner. And the best and brightest of them have taken a page of the retail and travel world, embracing data on an unprecedented scale.
When the dust finally settles, it may be that the most important innovation of all has been a proliferation of loyalty programs, Paytronix CEO Andrew Robbins told PYMNTS’s Karen Webster in a recent interview. They give restaurateurs access to much more information about their customers than ever before, which they can put to good use to make smarter business decisions.
âStarbucks did it, Panera did it and McDonald’s did it; they all got the memo, âRobbins said. âThe benefits are you get to know the customers and then you can start making tons of decisions based on real customer data. “
Further reading: Restaurants can leverage personalized offers to catch big spenders from aggregators
This data lets restaurants know if they can raise prices without scaring customers – or shorten their menus to simplify kitchen operations without eliminating favorites. It can also help them make better strategic decisions – where to open a new store, for example.
âIt all comes down to a strong digital customer experience, so you can collect data and start communicating with customers,â Robbins said. “And guests love to be rewarded for where they spend their money.”
Advantages of the aggregator – and aggravation
In an ideal world, Robbins said, restaurants would see more of that money. But many of them have gone headlong into partnerships with food delivery aggregators like DoorDash and Grubhub to secure more customers.
It may make sense, he said. The apps appeal to consumers willing to pay more and even accept more limited menus in exchange for the convenience of fast and inexpensive deliveries directly to their homes. And they have provided a lifeline for many restaurants during the height of the pandemic.
See more : 25% of restaurant patrons order food at least once a week and spend at least $ 40 per purchase
That said, not all restaurants are willing to cede part of their income to aggregators. Robbins said he’s seen many restaurants deliberately bypass DoorDash, not only because it was better for them, but also because it could be better for their customers, too.
âCustomers know they will get better prices, they can use promo codes and they can get their loyalty points,â he said. âSo there is a lot of motivation for the consumer to go directly to the restaurant. “
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Believe in ghosts
Another innovative tactic Robbins has seen is ‘ghost cooking’ or delivery-only marks, which can be tapped from an existing kitchen to ensure higher usage.
Robbins explained that he loves eating Bertucci’s pizza and pasta, but if he’s in the mood for a burger, he won’t click Bertucci to view the menu – instead, he’ll look for a burger brand like MrBeast Burger. But the consumer does not know much, MrBeast Burger cooks his food in the same kitchen as Bertucci’s.
According to Robbins, a brand he works with has used ghost kitchens to such a good effect that they have sales of 22 restaurants, despite only operating 20 physical kitchens.
âPeople are making a lot of money with this, and you’re going to see more and more of it,â Robbins explained. When an existing brand opens a ghost kitchen, “they don’t have any kitchen build-up, they don’t have to put money aside, they just get 10% more sales everywhere.”
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Flip tables with technology
Technology can help restaurants tackle labor shortages, essentially by changing their culture. With so few restaurateurs, it is not sustainable for brands to keep raising wages. This means fewer hires, so restaurants are turning to technology to make life easier for their existing employees. By having a mobile ordering app, for example, there’s no need for a human to take orders from customers – so staff can focus on cooking food and delivering it to them when it’s ready.
Ditto for the front of the house. Visitors to a restaurant do not have to sit still until the waitress arrives to place their order. They can just pull out their phones and press a button, and someone in the kitchen will start cooking their food. All of this translates into much faster table rotations, which means more customers can be accommodated.
Robbins has seen many restaurants he works with add a quick prompt after checkout, asking customers to rate their experience. He said it works well, with something like a 20% response rate versus around 1% for paper surveys.
Read more: Digital order boom widens gap between big restaurant brands and small operators
âIt’s an extension of thinking about loyalty, and how they can turn that to lock in customers for so many visits per month,â Robbins said. âSo if there’s a downturn later on, they’re protected that way on the downside. “