WILL CONSUMERS EVER COME BACK TO RESTAURANTS?
Updated: Oct 29, 2022
As we head into 2021, hopes are high in the restaurant industry fueled by reports that the majority of customers want to come back to on-premise dining. There is massive pent-up demand for “the good ol’ days” filled with mid-week pizza runs, fancy cocktails and romantic date nights (we’re certainly eagerly awaiting our turn at the bar), but it’s unlikely restaurants will be able to wholly return to pre-pandemic sales channels after so many months of empty dining rooms.
On average, new habits are formed in a couple of months – 66 days according to scientific research. It’s been over 10 months, or 310 days, since the first restaurants were shut down in March 2020. People have baked homemade bread, binged all the shows and even cleaned junk drawers, but most aren’t going out to eat like they used to. The majority of states still have limited dine-in and eating outside is less than ideal while winter weather looms.
To rebound, the restaurant industry needs to embrace what we've learned about how consumers eat when eating out isn’t an option. COVID-19 accelerated many tech-driven restaurant trends like delivery, curbside and online ordering. Understanding these new habits will set brands up for success beyond the pandemic, as it’s likely many current behaviors are here to stay.
What have restaurants learned about consumers during the COVID-19 pandemic?
Deep traffic cuts hit brands hard with stay-at-home orders, but bright spots were found in quick pivots to delivery, curbside and drive-through. For consumers, ordering in is a break from the 28th try at non-soggy chicken enchiladas. For restaurants, it’s a way to continue ringing in orders, even if the tables are empty.
3rd-party delivery offered a fast and scalable response to both local restaurants and chains, with spending doubling by October and November compared to pre-pandemic periods, as reported by Black Box Consumer Intelligence.
Nielsen reported that consumer spending for online groceries peaked in June and July, indicated that people fell into more sustainable habits after the initial hoarding of toilet paper and spending of stimulus checks. Online sales of groceries increased more than 50% in 2020.
As of August, according to data from eMarketer, about three-fourths of the top 50 store-based retailers in the United States offered curbside pickup.
The COVID-19 pandemic has accelerated technology adoption across generations. People have become more comfortable with using technology to stay connected, either communicating with others, attending school or working from home, or shopping for everything from home decor to food.
Limited-service sales have maintained better than full-service restaurants, according to Coresight Research, an advisory and research firm that specializes in retail and technology.
It is more profitable for restaurants when customers order online and pick up from the store via curbside, drive through, or in-store than 3rd-party or self-delivery.
What should restaurants do to be successful in 2021?
Make pick up, curbside and delivery as simple as possible for customers. While you might think the process to order your food is easy, there can be surprising hang ups that cause customers to buy from competitors instead. Go step-by-step through the process yourself, placing an order from start to finish, have a few friends complete orders to provide you feedback from fresh eyes and ask customers for any improvement suggestions as often as you can. Also, be sure to place orders at a few competitors to learn from what other brands are doing well.
Dedicate staff and space to new ordering channels. Create clear processes for facilitating different order types and keep everything organized, especially if there are multiple orders coming in from various platforms. Have a space that’s clearly marked for customers to pick up their orders and remember, the fewer touches, the better. Consider contactless solutions like our Perfect Pickup that integrates fully with existing ordering solutions and secured lockers to provide a seamless, touchless process.
Get more data. When things are in flux, education is key to developing a smart plan for growth. Where are there gaps in your knowledge today? What would you like to learn about your restaurant and your customers that could impact decision making, projections, staffing, promotions, menu strategy, etc.? In the back-of-house with our Perfect Kitchen platform, we measure more than 1,000 data points every single day to make sure orders are prepped with complete accuracy and precision, creating consistent, delicious meals every single shift.
Watch profitability. Three areas of rising concern are high turnover, food waste and increasing costs for things like 3rd-party delivery fees. In today’s highly competitive restaurant environment, every penny is important. Our Perfect Kitchen platform has reduced cost of goods sold by up to 300 basis points (1-3 percentage points) and led to up to $25,000 in annual food cost savings per store based on analysis completed by an international QSR chain. Plus, we’ve delivered 15-20% productivity gains using just-in-time cues and digital recipe guides that keep everyone on task.
Restaurants might be a little down, but we’re definitely not out. By doing much the same thing that consumers have done, like embracing technology and creating new habits, we can see significant growth in 2021 and save a lot of families from soggy homemade enchiladas.