As hard as it may be to imagine, the dark cloud of the pandemic did produce some silver linings for the foodservice industry. Two that come to mind immediately are the off-premises boom and customers’ willingness to use digital means to remotely interact with restaurants. While those trends were already in motion pre-pandemic, the pandemic accelerated them exponentially, generating faster growth than would have been the case under a more normal business cycle.
Juan Martinez, PhD, PE, FCSIOperators with a digital platform that facilitated off-premises dining prior to the pandemic typically thrived during the last year. And with business conditions steadily improving, these operators are ready to seize the moment. Those who dragged their feet with respect to off-premises and digital faced a different reality.
When governments across the country darkened restaurant dining rooms to hopefully slow the spread of COVID-19, many consumers were disappointed. But when off-premises business became the only restaurant dining option in town, they reluctantly got on board and many came to truly value the convenience of drive-thru, curbside and various other forms of delivery. And even as we start to reengage in our pre-pandemic ways, it’s highly likely that although the demand will get reduced from pandemic time, it will still be higher than before.
Now it is time for operators from all segments to reevaluate their digital infrastructure with both an eye on today as well as tomorrow. For fast-food operators it could be digital ordering via kiosks, smartphones, web, or voice ordering options and even smoke signals. OK, maybe not the last one, but you get the point: Anything and everything should be in the conversation at the moment.
For full-service restaurants this means exploring digital menus, pay-at-the-table solutions and other technologies that maximize the efficiency of the time servers and staff interface with guests. This may seem like an option that could erode a brand experience, but if the tableside technology the customer uses is convenient, like calling the server with a touch of a screen or being able to order additional food or drink items the same way, guests will likely appreciate and embrace these options. Nobody complains when they can get more of what they want when they want it. One simple technology application that blossomed during the pandemic is the use of QR codes for everything. They are everywhere now. In one application a sign with a QR has replaced preview boards in the drive-thru.
The application of technology to help drive sales and guest satisfaction can help operators address another significant challenge they face at the moment: labor. Labor represents a dual challenge in that it is both tight and costs continue to rise. Depending on who you ask, a tight labor market may be the new normal for the restaurant industry, at least for a while. Between finding jobs in other industries because restaurants were shut down, or operated at such reduced capacities for so long and various other factors, there has been a mass exodus among the restaurant workforce.
The labor crunch is so tough in some states that many quick-serve restaurants have opted to not open their dining rooms, instead sticking with their off-premises service modes. Coincidentally, even without the dining room side of the business many QSR concepts continue to thrive and drive more sales. That’s because aside from the labor cost of delivering the food, off-premises is more profitable for many fast-food concepts. To compensate for the delivery cost, many concepts charge more for the perceived convenience of delivery. The key word here is convenience. The question remains, though: Is delivery more convenient for the customer or the operator? The answer probably does not matter because in the end consumers continue to show a willingness to pay more for delivery, so everyone is happy.
If the challenges the restaurant industry faces seem daunting, that’s only because they are. Keep in mind, though, many other industries are in a similar situation. And today’s challenges of how to reopen to full capacity are far better than the ones we were dealing with just one year ago.
For the past few weeks I have been looking to purchase a new car, since my lease expires soon. And wouldn’t you know it: There is a shortage of new cars and a high demand for used cars. It took me a while to find a new car but on the positive side, for the first time in my life, I could sell my leased car and get more money than the residual value of the vehicle. So the same tailwind that made it challenging finding a new car helped me get more money for my old one. I asked the salesman that finally sold me the new car about what happens if the dealer has no new cars to sell. His reply: They will sell used cars. This is how car dealers are pivoting. By the way, he also mentioned that except for the first couple of months of the pandemic, they have been extremely busy.
We are in a great place to reinvent ourselves and get on with the so-called new normal by adapting as necessary to thrive in 2021 and beyond. Embrace technology, customer behavioral changes and all the other silver linings of the new business environment.
