“Daniel," a French fine-dining restaurant on New York's Upper East Side, shut down in March due to COVID-19. Suddenly, Daniel Boulud, its owner and chef, had no customers.
Yet Boulud, who as an immigrant from France built an empire of 18 restaurants and bars worldwide, is no stranger to unearthing business opportunities. To quickly make a shift for the new commerce landscape, he opened Daniel Boulud Kitchen, a delivery service with menus that change by the week via an online delivery and carryout platform.
Among the items on its menu one week: a Sunday brunch for four, designed to be eaten al fresco, available for pickup. For delivery, there was a bouillabaisse for up to six, to be prepared in the home, and a three course pre-fixe menu.
Boulud's pivot to reach his market shows how some restaurateurs have faced new circumstances with remarkable resilience and innovation, as they reconfigure their businesses for different rules of engagement with customers, which feature more social distancing and less (or no) contact, and an increased reliance on digital solutions.
With the need for more digital engagement, operators have accelerated their reliance on restaurant technology, such as upgrading to systems for online ordering, delivery tracking and messaging capabilities, email communication about offers and promotions and accepting contactless digital payments via mobile wallets and QR codes.
“In response to the changed environment, the first thing restaurants are doing is purchasing a digital point of sale," says Andre Nataf, Senior Vice President of Point of Sale at Global Payments company Heartland. “In addition to accepting digital transactions, they need to have tools to engage with customers, such as email marketing capabilities, loyalty programs and a robust website presence."
As part of this digital shift, the use of contactless payments has accelerated given how customers no longer have to touch a terminal, which also extends to signatures that are no longer required in many cases.
Additionally, delivery and pickup has now replaced much of the face-to-face business, as operators reconfigure parking lots and reduce tables inside and out.
The new reality for restaurants
Even with restaurants having reopened to a degree, they face strong headwinds. Generally speaking, since stay-at-home orders have been in place, restaurant spending has declined almost universally.
Curbside pickup was the only channel to fare better in the four weeks following the shutdown compared with before the onset of the coronavirus global health crisis. About 39% of all consumers said they used curbside pickup after the crisis hit, up from 28% beforehand, according to a nationwide survey of 1,000 consumers by Global Payments Enterprise restaurant solution Xenial.
Companies best positioned for the crisis are those that focus on delivery and contactless. For example, sales for Dominos, which is entirely delivery or takeout, were up 14% for an eight-week period that ended May 17.
Pizzaville, a quick-service restaurant franchise with presence across Canada, had in-app and online ordering solutions in place that allowed it to offer both contactless delivery and contactless pickup options. Because customers had the option to prepay, Pizzaville has noticed a surge of in-app and online usage. This has allowed the chain of 75 locations to remain a trusted option for their customers who want to order take-out, but who also want to limit unnecessary personal interactions.
If restaurants are flexible to whatever comes their way, it might be the difference between survival and failure because they have the ability to adapt. -Andre Nataf, senior vice president of point of sale at Heartland, a Global Payments company
Innovation via digital means
The numbers show consumer preferences have shifted in a big way. Restaurants must rethink the way they do business, implement ways to reach more customers, and create a socially safe dining experience, all of which can be facilitated by advanced restaurant technology.
And the good news is, when people feel safe, they will likely come back: 70% of consumers said eating at a restaurant will help them feel normal again, according to Xenial's survey. Yet when they do arrive, they will be much more wary and demanding in terms of perception of safety, cleanliness and overall quality.
Here are eight key ways restaurant technology can help build trust and loyalty through safe commerce:
Digital ordering. Digital systems allow for mobile and online ordering from anywhere. Customers can create an order, reserve a table and pay for the service from mobile apps and devices. For pickup and delivery, it minimizes interactions between restaurant staff and delivery-service drivers.
Touchless payments integration. For payment solutions that aren't contactless, restaurants can take advantage of QR codes on digital menu boards in the drive-thru or printed on the receipt in the restaurant. From there, customers can order and pay using their mobile phone, via Apple Pay or Google Wallet. We found that about 44% of consumers are willing to tap to pay, up from 29% before the pandemic at the time of our survey.
Digitally-powered inventory. Digital systems allow for control of menus with a click or a tap - even for restaurants with multiple locations. Any alterations in prices or food items get reflected instantly on digital ordering interfaces or the screen at the point of sale.
Agility in the cloud. Cloud-based platforms can help restaurants be more agile for any situation — during a pandemic or otherwise. These platforms streamline a variety of tasks, including food ordering, digital menus, drive-thru management, kitchen management and more. They also help with customer intelligence and social media reputation management by centralizing reporting and analytics functions to gain deeper insights into customer behavior. With these tools and insights at a restaurant's disposal, they can make the necessary shifts to react to customer expectations quickly.
Guest list management. Digital POS systems make it easy for restaurants to manage a wait list and tables. Customers can receive texts when their table is ready, and can place their orders while waiting.
UV-C light cleaning. POS devices and kiosks can also use ultraviolet light to kill or inactivate 99% of microorganisms. The technology can be added to existing screens, and has the ability to monitor surfaces for when they've been cleaned, requiring no staff intervention.
Low-contact tips. Cloud-based processing of tips allows employees to receive their tips on a prepaid card and reduces the handling of physical cash. Tipping software like Netspend's Tip Network™ can integrate with restaurant POS systems, allowing managers to allocate tips to multiple employees, and pay tip-outs digitally after each shift.
Artificial intelligence. AI will become an increasingly vital part of restaurant efficiency. For those that opt-in, AI can create a more seamless and personalized experience. Smart menu boards with AI can recognize mobile devices, bringing greater speed to order fulfillment.
Large restaurant chains are already seeing the value in this technology. As one example, last year, McDonald's bought Dynamic Yield, an Israeli-based startup, for $300 million. The platform allows the menu board to make personalized suggestions to customers based on their order history and popular items at a given location. The restaurant chain noted in its first quarter earnings call that the platform was boosting operating results, giving customers more choice and flexibility in how they order, pay and receive their food during the pandemic. It will remain important beyond this crisis, the company noted.
Moving forward, technology will play a big role. Restaurants like New York City's Daniel and Canada's Pizzaville have made that quite clear. And it's hard to predict just how much change we'll see in the future of restaurants, but it surely has already shifted consumers in this pandemic to operating in a more digital world.
"If restaurants are flexible to whatever comes their way, it might be the difference between survival and failure because they have the ability to adapt," Nataf says. “And in a good economy, that might lead to doing 200% of your normal business."
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