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Channels or Sub-Channels – Does it Even Matter Any More?

The conversation in restaurant IT over the past several years has paralleled that in the retail industry, moving from single-channel, to multi-channel, to cross-channel, and then to omni-channel. These terms have all been part of an effort to describe the fact that restaurateurs can no longer simply “silo” their customers and offerings according to a particular channel if they plan to embrace a new one.
During a recent luncheon roundtable at MURTEC, this was a topic of conversation with viewpoints as varied as industry segments. For example, a regional pizza chain operator was just beginning to offer online ordering. A QSR operator with 6500 locations worldwide, however, expressed no intentions of embracing any channel other than brick-and-mortar, though he was willing to talk about drive-thru, walk-up counters, and ordering kiosks as separate sub-channels under brick-and-mortar.
What Exactly is Unified Commerce?
The problem with these -channel terms is that they really don’t capture the idea that retailers and restaurateurs should be involved in commerce, and not just channel-specific engagement. It is for this reason that a couple years ago we coined the term “Unified Commerce” to describe the idea that regardless of how many or what types of channels a restaurant chooses to embrace, the restaurateur recognizes that a) their foundational systems need to operate in a manner that truly embraces “one version of the truth”, and b) their presentation needs to appear seamless to the customer.
Sounds simple, but the reality is that in spite of us having this conversation with retailers and restaurateurs since the late 1990s, it’s only been the past couple of years that any real progress has been made. One technology that has helped is Distributed Order Management (sometimes Enterprise Order Management, or EOM), which is viewed as the single commerce engine that would serve as the foundational system for all products, customers, transactions and sourcing locations regardless of sales channel. It is flexible enough for the restaurateur to add a POS front-end of his choosing, along with comparable Mobile or E-Commerce add-ons. Proper employment of the technology can take care of both the “one version of the truth” piece as well as the seamless presentation piece. That said, implementation of such systems involves a capital expense that is typically out of the reach of most mid-tier and smaller restaurant companies. For the larger restaurant companies, the expense might not be quite as burdensome, but a franchise model can complicate things.
Unified Commerce is Tough, Keep Experience the Priority
Unified Commerce is hard, especially when trying to deal with EMV, healthcare impacts and minimum wage initiatives, among others. For the large QSR player, part of their response was to make the strategic decision to deploy food ordering kiosks in the restaurants, in spite of the fact that 65% of their revenue comes through the drive-thru. What they found was that customer experience took a hit as customers were waiting longer for their food due to the increased number of orders coming through kiosks. For the smaller pizza chain operator, he has a history of vendors failing him, which is not just costly and time consuming, it threatens the viability of the company as a whole.
Always, always, always, keep first things first. Rarely do patrons come to a restaurant because of the technology stack that is employed. Rather, the reasons they come to a given restaurant are for the food, the fellowship, and the ambiance. Technology that supports these are to be encouraged, and those that do not should be rejected. Piloting, whether it is for new menu items or new technology initiatives, is always recommended. When the decision is made to roll it out, the planning and preparation needs to take into account the aforementioned reasons the patrons come to the restaurant in the first place.
The Channel Whose Name is Not Spoken
Often overlooked in restaurant channel discussions is the fact that many of the national brands (and some of the regional brands) provide their own signature branded products through Grocery Store, Mass Merchants and Superstores/Warehouse Clubs. A recent visit to my local Publix revealed coffees (and k-cups) from Starbucks, Dunkin’ Donuts, McDonald’s and Krispy Kreme; frozen appetizers and entrees from Marie Callendars, Boston Market, Bob Evans, Red Robin, Arby’s, Nathan’s, Checkers/Rallys, Chili’s, Skyline, and P.F. Changs; and desserts from Marie Callendar’s, Cinnabon, and Krispy Kreme. Further, that same Publix offers gift cards from no less than 36 chains or restaurant families, including some from the list above. These are rather obvious efforts to grow sales and brand awareness.
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