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Food & Dining

How Restaurants Can Be a 
Model for Digital Transformation

Jackie Walker
Jackie Walker
Kent Asaki
Kent Asaki

With recent shifts in customer behavior patterns, there is opportunity for restaurants to reimagine the customer experience, discover value in new products and services, and use data to rethink business models. Agility, efficiencies and strong partnerships through digitally led solutions are all critical ingredients on the menu for any service-based organization. Digital technology allows restaurants to meet diners where they are.

Across all of dining, there has been a massive shift to off-premise service models and self-service ordering, which is unlikely to shift back to pre-pandemic levels. Digitally transformed brands such as Panera, Chipotle, Domino’s and McDonald’s have been reaping the benefits of digital, a key enabler in weathering the storm. Digitally enabled brands like Domino’s, for example, switched to a delivery and takeout only model by promoting online ordering via its app and using the chain’s in-house technology such as GPS-tracked orders. Domino’s revenue is up 160% over the past five years due in large part to this digital focus. For brands that were earlier on in their digital adoption curve, the shift to off-premise was rockier, and the urgency of implementation to get features in market led to less robust long-term solutions.

As restaurant traffic patterns have shifted, restaurants must continue to focus on evolving their off-premise capabilities to quickly respond to customers’ concerns, incorporating emerging experiences such as voice, chat bots and in-car experiences to maximize efficiency.

''We will see more promotions testing core product innovation coming through off-premise and, of course, more creativity in the fight for loyalty and gamification to keep the brand top-of-mind and highly competitive''
Dan Lubetsky, Senior Director, Customer Experience and Innovation

U.S. online restaurant delivery revenue is projected to hit $66.56 billion in 2022, resulting in a projected market volume of $96.37 billion by 2026, according to data from Statista. During COVID-19, 13% of the entire US restaurant market was taken up by online food delivery. By 2025, delivery is expected to grow to a 21% share of the restaurant market. This represents a key area where restaurants can do more to diversify and maximize revenue by owning more of the delivery experience.

According to Publicis Sapient’s Digital Life Index, released during COVID, 74 percent of respondents said health and safety ranks as one of their top three factors influencing their choice of restaurant. At the same time, some 55% of respondents also said contactless technology ranks as a top three factor influencing restaurant choice, another area where digital can make the customer experience safer and more efficient.

Exploring digital technology advantages

As restaurants diversify and maximize revenue through improved customer experience, new product innovation, and data and business model innovation, they must ask themselves:

  • Why should we consider investing in changes and/or new services?
  • Where should we invest in exploration of new services and/or exploitation of existing service efficiencies?
  • What opportunities will likely provide the best return on investment for the hypothesis?
  • Which initiatives can start now, and which need a bit more investigation?

The following chart addresses the actions restaurants can take to get started on each route to diversification and new revenue streams:

 

Improve convenience and crew efficiency by introducing contactless touchpoints both on- and off-premise, leveraging digital to eliminate high-touch moments in the customer’s journey.

Be where your consumers are by ensuring frictionless delivery and a seamless omnichannel experience between digital and physical, removing friction and scaling curbside.

Build trust and confidence by leveraging digital to bring transparency into capacity and queuing in compliance with social distancing needs.

 

Use digital channels as a new avenue to merchandise products tailored to an off-premise consumer such as markets, meal kits, gift cards and merchandise.

Develop the ability to adapt rapidly. One thing we know with certainty is the situation is constantly evolving.

Accelerate new or evolved products and services.

Focus on core products and harness innovation efforts from the core to extend the reach of popular, high frequency items.

 

Use data to engage the customer with more precise marketing and merchandising of new products and services—either at the DMA or local level.

Lean into loyalty to drive reoccurring sales by keeping the brand top of mind and driving customer-centric campaigns across digital channels.

Use data as a predictor of supply and demand. With supply chain issues still challenging the market and the threat of another wave of COVID looming on the horizon, it is more important than ever to accurately predict demand for goods.

 

Pivot into areas that unlock new revenue sources such as meal subscriptions and consumer packaged goods.

Platform strategies tap into adjacent partners in the customer value chain, such as meal and wine curation, or partnerships with third parties that cater to commercial consumers.

Assess market trends and look outside the restaurant industry for new strategies, whether for efficiencies, growth or reinvention.

Build a diversified revenue model

People will always need to eat and restaurants need to offer options. Digital brings the necessary agility and speed to pivot with evolving needs.

“Whether drive-thru, curbside pickup, delivery, walk-up, grab-and-go or hotspots, food will be prepared and delivered to customers differently and menus may evolve as well to connect products fit for each delivery channel,” said Dan Lubetsky, Publicis Sapient’s Senior Director of Customer Experience and Innovation.

As country music star and TV personality Jimmy Dean said, “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” Harnessing the power of digital technology enables restaurants to address concerns about safety and serve consumers where they are. And all the while, they’ll be deploying speedy, innovative goods and services at once-unimaginable costs, while collecting valuable data.

Jackie Walker
Jackie Walker
Senior Director, CX&I
Kent Asaki
Kent Asaki
Executive Client Partner, Food & Dining