Most consumer industries have long embraced digital, spurred by Amazon’s entry into nearly every retail category. Restaurants, however, have been slower in their adoption rate. This is in part because technology solutions aren’t as obvious when dealing with ready-to-consume food, but also because the industry hasn’t faced competitive pressures that have forced its hand.
This is about to change. Many food-industry players are going to learn — just as retailers have — that success requires so much more than just “the next” cool app.
Early digital efforts could be characterized as piecemeal attempts to check the digital box, versus integrated and holistic undertakings that truly improve the dining experience. While I was visiting Houston a while back, an establishment there advertised a new app designed to streamline the in-store experience by allowing users to preorder their meals. The app was sleek, the interface easy to use, and my order went through without any hiccups. At the restaurant, however, I was channeled into the same line as everyone else. When I reached the register, the cashier took my confirmation number and only then told the cook to “fire up the fries.” The benefit gained from this “tech solution” was a soggy bun on a hamburger that sat around while I waited.
When technology works, it can be empowering. When it doesn’t, it’s irrelevant — or, worse, it can create a new source of friction for consumers and operators. Rarely does a middle ground exist. What I’ve found over the past decade is that irrelevancy usually has little to do with the technology itself.
Make no mistake, the tech revolution is coming to the restaurant category. Applebee’s and Chili’s have introduced table kiosks and gaming apps to entertain customers and help turn the tables more quickly; several variations on the mobile-payment app are being rolled out by Wendy’s, Burger King, Starbucks, Dunkin’ Donuts and others; and Chipotle and Jimmy John’s opted for ordering apps to expedite long wait times.
Where will it go next? Literally anywhere — Domino’s customers who drive a Ford can order a pizza through their vehicle’s “sync” app. And don’t think for a second that everyone in the restaurant business didn’t take notice when Amazon’s drone delivery efforts came to light.
The industry has come a long way from the days when Wi-Fi availability was enough to distinguish a concept as digitally relevant. In fact, a real technology platform, along with its supporting infrastructure and inherent costs, has become the ante to operate a national concept today. However, when digital advantage is supported by operational excellence — to actually fulfill the promise of the technology — the integrated offering holds the power to change the customer experience, and thus, the industry.
A chance to markedly alter the customer experience is a rare occurrence in any retail setting. Indeed, new winners and losers will be anointed on the back of the consumer-centric innovation over the next few years. Improvements in technology have made real the ability for restaurants to provide a more customized and personal experience for guests, creating an opportunity set, I believe, on par with the market opportunities we saw decades earlier to offer better food and warmer “gathering place” environments.
Visible to the customer, Panera’s digital offering being rolled out over the next 36 months will include kiosks in our cafes, a new website and a mobile app that together create differentiated and enhanced experiences for “to go” and “eat in” customers. We’ve changed the way guests can order, pay and, ultimately, consume Panera’s food.
The game-changer, however, isn’t what is immediately visible to the consumer. What will matter is that we have also put in place TQM production processes and systems to not only increase capacity and accuracy, but more importantly, to assist our associates and prepare our cafes for the coming digital revolution.
If any concept intends to truly provide a differentiated guest experience, it can be enabled by technology, but it must be powered by operational capabilities. The threat in overlooking the operational component, beyond wasted time and capital, is irrelevancy. In our industry, that’s the greatest risk any restaurant can face.