A Fourth Industrial Revolution is upon us, and many restaurant owners and CEOs are struggling to stay relevant. This is due in part to the already existing day to day dealings of running a restaurant, such as labor and food expenses, but mostly due to their struggle or unwillingness to adapt and modernize. With new, robust, and more adaptive competitors, staying relevant is a true challenge if you are too stubborn or too old-fashioned to bring your restaurant into this new age of technology.
The restaurant landscape is evolving and shifting at a faster pace than ever before. Restaurant brands are not only in competition with each other, but also with a vast array of new initiatives and avenues to satisfying hunger. In order to compete or even have a fighting chance at survival, well organized and forward thinking restaurant brands are starting to plan ahead and take proper action. Without having the foresight to position your brand favorably for the future, you are essentially writing your company’s own death certificate. Whether it comes in 1, 2, or 3 years, its coming.
As we all know, talk is cheap. So, how can restaurant brands take proper action to position themselves favorably into the future? Let’s review two similar strategies that have worked well for several brands thus far:
1) Implementing New Technology For Digital Ordering Has Led To Gains On Multiple Fronts
There is no greater success story than Domino’s Pizza when discussing how new technology can improve your restaurant brand and increase your bottom line as a business. Emphasizing new technologies has been a major game changer for Domino’s, and Pizza Hut has followed suit. This forward thinking strategy has boosted Domino’s and Pizza Hut’s market share of overall pizza sales in the US to over 50%! And they are only two brands!
Since 2010, when Patrick Doyle became Domino’s CEO, the pizza brand has only pushed harder and faster when implementing new technologies. Starting about 5 years ago, they implemented ordering via messaging channels that people frequent on a daily, or sometimes hourly basis such as Facebook Messenger. The results were tremendous, as Domino’s enjoyed a 24% increase in their delivery market share, and a stock price increase of 880%! Additionally, they implemented technology to optimize the delivery process, leading to a 17% increase in revenue year in and year out.
As Patrick Doyle recently proclaimed, Domino’s is “as much a tech company as we are a pizza company.” He wasn’t lying, their stock performed at a higher level than the likes of some of the world’s brand name tech companies such as Amazon, Google, and Apple.
But Doyle emphasizes the need for thoughtful, idea driven innovation that is deeply thought through and analyzed. For example, they came together and thought of how to offer a method of ordering that resonates with the consumer, puts the customer first, and allows them to order without downloading or registering anything, making convenience paramount.
That is how they arrived at the decision to implement ordering via messaging channels to their consumers. The lack of discouraging barriers to placing the order (Downloading or Registering) optimized the ordering process for the consumer and lead to more sales, cementing their tech decision as a brilliant one that paid significant dividends. Doyle explained the strategy very simply as, “relentless, meaningful innovation.”
2) The Largest AUV (Average Unit Volume) Increases Are Seen Amongst Chains That Implement and Add New Digital Ordering Technology
Out of all of the QSR chains in the United States, those that have seen the largest AUV increases have two primary things in common:
- Emphasizing new technology, specifically in regards to digital ordering.
- Simplified Menus — There is a direct proven correlation between an increase in menu complexity and a decrease in AUV.
The term “High Tech Innovation” is not reserved only for technology companies anymore. At Chick-fil-A, Michael Lage was hired as the senior manager of digital experience after having previously worked at Facebook and Google. Lage brought his deep knowledge of tech and innovation to Chick-fil-A, leading several initiatives with new technologies. The focus was making the ordering experience as user-friendly as possible, and connecting with consumers for ordering when and where it is most convenient for them (i.e. Facebook Messenger). The value of putting the customer first can not be overstated.
Based off the consistent trends in the restaurant industry as of late, it is abundantly clear that innovation and the implementation of new tech is a necessity. Yet another chain that agrees with this sentiment is Panera Bread, who in April 2012, launched Panera 2.0: strategically planned combinations of several new technologies for digital ordering, payment tracking, and operational organization.
Panera spent $42 million on these initiatives, but even with such a large investment, the results were incredible for Panera as a business. They were able to “double down” on their digital initiatives, increase sales, improve ordering times, and minimize friction throughout the ordering process. Investors saw a 10% return on their investment, all because they offered a frictionless way for their consumers to order. No discouraging barriers, just simplified ordering when and where it is most convenient for the customer.
Proven success stories such as that of Domino’s Pizza and Panera Bread speaks volumes about the future of the restaurant industry and digital ordering. Again, talk is cheap, and throwing around statements about your brand such as “We are Innovative!”, or rushing to launch a dedicated digital ordering app without much thought and analysis will only set you back further as a business. Why would any customer want to download or even keep an App for ONE restaurant on their phones, just for every time they want to order from that restaurant? Let them order the way that is most convenient for THEM and not for YOU.
The future success of your restaurant brand hinges on convenience to your valued consumers, strategically analyzed tech initiatives, forward thinking long term solutions, and always keeping at least one eye on the future, if not both.
Say2eat is democratizing this proven technology by enabling restaurants to have their own brand front and center, while staying on top of technological advances in the restaurant business.
To see Say2eat’s technology in action, click HERE (link to schedule a demo).
Say2eat’s white label solution enables chains and restaurants to create personalized consumer engagements that lead to desired business outcomes.
We are a one-stop-shop for empowering your digital strategy, by providing a seamless solution across all voice and message applications (e.g. Facebook Messenger, SMS, iMessage, Amazon Echo, Google Home, etc.). By implementing core technologies and transforming business operations to scale global loyalty, our omni-channel commerce creates a smart, brand customized and conversational user experience. This leaves brands with an everlasting impression of convenience, efficiency and ease of use that promotes consumer loyalty and retention.