There are many opportunistic windows that opened during the pandemic that restaurants are not dismissing as a phase. One of those windows was off-premise dining.
Off-premise dining, otherwise known as off-premise ordering, refers to the preparation of food for takeout, pickup, or delivery for consumption at a different location (off the restaurant’s property).
While industry experts may have long predicted a shift to off-premise dining options for fast casual and quick-serve restaurants (QSRs), the forced nature of the pandemic catapulted restaurant operators, managers, and marketers to create new drive-thru, curbside pickup, and other takeaway models. The impetus remains in exploring strategies that preserve the convenience and value of off-premise without sacrificing the personal touch that makes each brand a customer favorite.
Focus on the Flow
Implementing off-premise solutions with the front and back of the house in mind is the first step in creating a more seamless experience for employees and customers. Having the right technology in place that caters to everyone involved in the pickup experience is the key to success – not only from a time saving perspective, but financially as well.
There have been a slew of creative solutions from the likes of Burger King, McDonald’s, Taco Bell, and other QSRs who have honed efficient uses of space at their locations.
Burger King rolled out a “suspended kitchen” design that places the grill area over the drive-thru lanes, maximizing the use of vertical space. Additionally, Burger King’s approach to providing dedicated spaces for various pickup options allows customers and third-party delivery vendors to easily find designated pick-up lockers or separate parking spaces solely for curbside pickup.
Competitor McDonald’s is implementing an express drive-thru that allows guests to skip the line if they order through the McDonald’s app. Taco Bell is adopting a similar approach as an add-on to their existing, traditional lanes. Taco-bout a loyalty-value play.
Battle of the Brands: Competing for Choice
Behold, the paradox of choice. Too many options for consumers can cannibalize parts of the business, but that doesn’t mean brands shouldn’t try new approaches previously reserved for other restaurant categories. Traditional QSRs (a.k.a. drive-thru restaurants) are opening up designated parking spots and lanes for curbside – something that wasn’t a part of their model prior to the pandemic. On the other hand, fast casual restaurants are redesigning stores to include order-ahead and drive-thru lanes, the latter of which was an exclusive feature of QSRs previously. Today, QSR and fast casual concepts are practically one in the same.
“QSRs have focused on getting their drive-thru times down. … If that happens, your curbside pickup is not going to be growing at the same rate that it has in 2020 because if you’re going to drive to the restaurant anyway, you might as well just go through the drive-thru.”
– Jean Chick, principal and U.S. restaurant & food service leader at Deloitte.*
While an argument can be made that investing in different pickup options will come at the cost of the other, it ultimately comes down to choice – and that’s what the customer wants. Diners are in different categories and are not necessarily competing with one another; they’re either on the road and need to grab something spontaneously through the drive-thru, or selections are planned ahead of time and ordered via a mobile app for curbside pickup for family dinner.
It is, however, a conundrum worth considering because resources need to be allocated appropriately. Collecting and analyzing the data around customer visitation and order metrics will be the true test of where to invest.
When it comes to ordering and visitation metrics, much of the same technology can be used to understand when someone arrives on-site to pick up their mobile order, or if they are coming to place an order for drive-thru. Understanding the context of where they are, if they just left their home, if they’re stuck in traffic, and how long they have been waiting on site are all insights that location technology can deliver in order to provide the best experience for customers.
Curbside pickup drives a large percentage of sales coming through digital channels and the more seamless the process, the more likely customers are to return. Industry publication Restaurant Dive predicts that customers will increasingly ditch delivery for curbside options, especially when restaurants provide frictionless pickup.
“Seventy-four percent of diners cite convenience as the top driver of off-premise consumption, and nearly half of diners report they are more likely to order directly from a restaurant if it’s an easy process.”*
Clients who live within a 10-mile radius of a restaurant’s location typically appreciate the chance to avoid delivery fees while exerting control over how quickly they get their food. This also puts the brand in control of the entire ordering process and on-site pickup experience, as well.
Many brands hacked solutions together at the beginning of the pandemic but are improving these services now. Toppers Pizza, for example, had already implemented in-app ordering before everyone jumped on the bandwagon during the pandemic. They swiftly rolled out curbside delivery – which made up over 40% of their total sales by May of 2020 – and are continuing to improve the service.
“There is no way [curbside] goes away. It changes how we do business.”
– Scott Gittrich, CEO, Topper Pizza*
The (Decreasing) Reliance on Third-Party Delivery
It’s unlikely that restaurants will completely get rid of third-party delivery partners, but many will be investing more in their own services. Not only does investment in internal channels and processes allow them to maintain control (as mentioned earlier), but it enables them to own all the data, as well. Generating and analyzing customer data within their own platform allows them to deliver a more personalized (predictive) experience which drives repeat sales and increases the customer lifetime value.
Additionally, as restaurants continue to grow their off-premise sales, operators will increasingly take notice of the problems associated with third-party apps, and be inclined to take back control.
In a recent article from Fast Casual, Rob Kenny, Director of Restaurant Partnerships at Dosh noted, “If a customer has a negative interaction through a third-party delivery service, they may be quick to blame that experience on the restaurant, not the tech. 2020 has shown us how important it is for brands to maintain authenticity and control over the diner experience across as many digital platforms as possible.”
No-Touch New Tech
The importance of embracing new tech when expanding into touchless channels is top of mind for many in the restaurant industry. From digital ordering to digital loyalty programs, convenience is literally at the customers’ fingertips. The resurgence of past innovations like QR codes and beacons as solutions for proximity-focused interactions are also interesting.
Beacons are a great solution for drive-thru ordering and/or pickup. By deploying these at various areas within and outside the restaurant, location-triggered push notifications are sent to a customer’s mobile device that, upon tap, can open the menu – without needing to get up close to a QR code to scan. If implemented for pickup purposes, staff can be alerted that a customer is on-site for pickup and what parking spot they are in. No need to call. No need to check in. No need to tap an email or link upon arrival.
The pandemic has accelerated the adoption of digital technologies so much that customers now expect every aspect of the restaurant experience to offer convenience in every step of the process. As new tech continues to emerge, restaurants will face the pressures of maintaining solutions that meet the needs of their customers.
Multiple Channels, Exponential Opportunities
QSR Magazine stresses the importance of connecting with customers using their preferred method to create a frictionless experience. To truly compete in the new landscape, retain loyal customers, and acquire new ones, brands must offer multiple ordering and pickup channels. These may include online via website platforms (direct and third-party), native app, drive-thru, curbside, and dine-in services. Jeff Hall, founder and president of brand experience and customer satisfaction firm Second to None, put it perfectly:
“You need to execute and operate as the best-in-class omnichannel brands do…that includes reducing customer effort and customer friction, meeting customers where, how, and when they choose to interact with you. You are an omnichannel brand, whether you want to be or not.”*
The days of offering limited options for consumers have spoiled, but that doesn’t mean restaurants have to offer every option at each location. Some QSRs and fast casual restaurants are downsizing certain brick and mortar locations, while others are upsizing to include more lanes for pickup. Some are taking advantage of virtual concepts and ghost kitchens depending on demand in particular regions and for cost saving purposes. Others are opening stores just for takeaway via pickup or drive-thru windows, and some are adopting a mix of both.
It Pays to Have a Loyalty Program
Not only do loyalty programs allow for the collection of insights and data on restaurants’ most valuable customers – arguably a currency in and of itself – but it literally pays. According to multiple research studies, loyalty consumers have historically spent more, sometimes 20% or even 67% more than non-loyalty consumers.*
Whether a program offers rewards at the point of sale or pushes a discount when a customer is nearby, there is a huge incentive for brands to tie these types of programs into their native app experience. Restaurants are also incentivizing customers to place mobile orders through the brand app by offering special menu items not available for dine-in or through third-party apps.
All of this tracks back to offering the most convenient options for customers: understanding how they want to be communicated with (and on which platform), how they engage with the brand, and more. &Pizza does a great job of engaging with their community and understanding the customer journey (watch this interview to hear from &Pizza’s Head of Marketing on the topic).
The Future Is Ripe
The future of off-premise is promising for brands that continue to innovate. Embracing digital tools and implementing the right technology across every aspect of the business are not simply value-adds anymore; they are the foundation to successful operations. These digital strategies are directly tied to brick-and-mortar operations that function as a facilitator of the customer experience.
How will restaurants evolve to create an even greater value proposition through 2021 and beyond? Time and tech will tell.
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