(www.focusbrands.com) in April of 2014, he had a mission to deliver a broad range of IT initiatives across the company’s then 4,400 franchise-owned and operated snack and restaurant brands. Those brands, which span the United States, Puerto Rico and 60 foreign countries, include: Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, Auntie Anne’s, McAlister’s Deli, and Seattle’s Best Coffee. Since joining the company, the number of locations now exceeds 5,000 and Verdesca is leading a brand-wide transition to a cohesive digital ecosystem.
“I was brought in to help our six iconic brands, what was essentially seven separate independent businesses, figure out their individual strengths and then create a unified organization where the whole is more than the sum of the parts,” Verdesca explains. Each brand had its strengths and levels of technology. “Several had strong loyalty programs, for example. We took learnings from each, but nobody had the complete picture.” The complete picture required a restructuring of the entire company, including its IT infrastructure, in order to identify and leverage the brands’ assets as a whole as opposed to independent businesses.
In this exclusive interview with HT, Verdesca shares details on how FOCUS is creating a customer-driven experience across its brands. He paints a picture of a strategy that encompasses: mining and analyzing massive amounts of diverse data; identifying capabilities to achieve desired goals; and recognizing the importance of mobile as a major component of the customer engagement experience.
HT: When you joined FOCUS, CEO Steve DeSutter tasked you with ensuring the organizational structure, systems infrastructure, and department direction would support unification. That’s a big goal. What did you tackle first?
MV: It wasn’t easy, but the first priority was to have a standard POS platform. It is the foundation that so much is built on — from data insights to mobile ordering and loyalty programs. Goals are so much easier to accomplish if everybody is on the same platform.
We started with close to 25 point of sale systems. Our goal today is to get to two: one for snacks and one for restaurants. The snack brands are mostly on Micros (www.micros.com); Cinnabon is rolling out Revel (www.revelsystems.com). The restaurant brands are all on or moving to NCR Aloha (www.ncr.com). Ultimately, however, we are trying to see if one will work for all.
The longer term objective is about building more synergies to improve support, lower cost and provide better digital capabilities to all brands. Where an individual brand might not have been able to afford a particular technology strategy, by combining the power of all our brands, we can bring everyone up to best in class.
HT: What are your must-haves for the new point of sale system?
MV: We want to have a complete system offering for franchisees that enables the consumer to engage us wherever they choose to do so — whether that is at the traditional brick and mortar store, on mobile devices, or through third-party delivery services like Postmates (www.postmates.com). We want them to reach us on their terms. On the flip side, we want to collect as much data as we possibly can from wherever possible, while also obviously protecting consumer privacy and security. We want to be a consumer-driven organization and base all decisions, whether they are marketing, product development, service, or geographic expansion, on what we learn from the consumer. We want systems that help make the diner’s interaction frictionless and gather the right amount of data to drive business.
HT: How does data management fit into the new ecosystem?
MV: At the beginning of last year, we identified analytics capabilities as somewhere we need to be best in class. We added a consumer insights team under the chief brand officer and I’ve added a digital and marketing technology team on the IT side. These two new teams focus on gathering business intelligence and analytics. We built out a data warehouse and data lake. The data warehouse holds more curated data, like what comes from the POS or loyalty systems, while the data lake and Big Data houses uncurated data, such as social media, weather etc. Our data scientists look at the data lake to figure out what it all means, while the more traditional operations staff will get reports out of the data warehouse.
Our top priority for data gathering is adding transactional-level details for all our domestic locations. That is really powerful data that we can do a lot with — obviously around pricing, but also in product development and consumer trends. After that we’re going after as much consumer data as we can get. We want to make sure we are getting data from each loyalty program, POS, guest surveys — all those things that we have data on, but getting it to one place so the data scientists can tie it all together.
HT: That’s a lot of data. What technology are you using to empower the analytics team?
MV: We’ve built a separate data warehouse and technology stack that is all based on Microsoft. It’s in the Microsoft cloud so our corporate data scientists and analysts can use Microsoft analytics services, like Tableau, Power BI, and AlteryX to access data and build reports. On the franchisee side, we have a custom-built data tool for our snack brands. Schlotsky’s uses Aloha NCR Insights for analytics.
HT: What process does FOCUS use to prioritize data?
MV: We have a steering committee that includes marketing partners and consumer insights team members that drive that. The process includes talking about what data we need, what we think we can do with it, and what the business value is. That prioritizes my team’s development work. Most of it requires building interfaces because the data is in systems we either own or our partners own and have access to. If they have a great API and it’s easy to pull the data we’ll do it. If not we’ll ask them for an output file.
HT: You say if they have an API. How important is it for your technology partners to have open architecture systems?
MV: It’s definitely an absolute must-have with new vendors going forward and vendors we are working with now. It’s really key, especially as mobility becomes more prevalent and there are so many different ways to interface with customers. There has to be a seamless API with the POS, which is the center of everything for a restaurant. We do have a lot of legacy systems that aren’t as good at that and don’t play well, or if they do play well it’s for X number of dollars per month per location. Since we just exceeded 5,000 locations and have a growth strategy, it’s very important for us to not just increase that fee every time we open a restaurant.
HT: How does mobility play a part in your strategy across FOCUS’ various concepts?
MV: Mobile is table stakes — mobile and online ordering. We’re at the point where a consumer who wants to order something on their phone before they go to the restaurant will bypass the brand if they cannot do so. Uber, for example, offers that frictionless experience. A consumer hits a couple buttons, and everything is done and paid for.
That’s the new standard for how easy things have to be. Look at things like beacon technology, geo-fencing and all the different payment technologies. If the customer is a loyal customer and opts in to the program, they will expect to walk in and be recognized by whatever device and be able to reorder their last or favorite order instantly. Restaurants have to be sure they can provide that experience.
A major component of our digital strategy is to be in all of those places as well as the evolving places –like the partnership we are doing with Postmates as a delivery option. We are working very hard to make sure all our brands are available in all the ways consumers will want to interact with us: mobile ordering, online ordering, online catering, in-store, and we are working with Nextep (www.nextepsystems.com) to make our drive-thrus more efficient with self service kiosks.
HT: Let’s talk about that “frictionless” experience. What do you think is key to making this a reality?
MV: Most immediate is making sure all the different systems talk to each other. We need to ensure that things ordered online are printed out in the kitchen and produced in a timely fashion. Right now, a lot of that is still manual, so it might look frictionless to the guest, but not be frictionless to operations. We need all the pieces to talk to each other well. Then it goes back to the consumer side and what they want to adopt. Is Apple Pay something we need because guests want it? Our first step is making the systems talk to each other, then building new capabilities to make it easier for everyone.
HT: How are you judging what technology your customers are really interested in so you’re not just blindly rolling out every new technology that comes along?
MV: There is a lot of data out there. Our process is to make sure we listen to what consumers want and then partner with franchisees, brand presidents and their teams so we figure out what the ROI is on any technology we roll out. We recently partnered with Crimson Hexagon (www.crimsonhexagon.com) a social media listening and analytics tool. They did polls to find out, for example, what consumers want from a mobile app. When asking franchisees to make an investment, we need to have a strong understanding of the ROI to present a case.
With Apple Pay for example, the franchisee has to make money per terminal. We do testing and analytics to find out: what are consumers saying; does it drive more sales; encourage repeat customers; increase average transactions? Once we make sure the business case is solid, only then will we go out to our franchisees with it. We are very cautious when we ask a franchisee to spend money. So we make sure we’ve done our due diligence.
HT: What technology do you think will have a major impact on foodservice in the near future?
MV: Everything has value, but consumer adoption needs to prioritize our investments. I think we will come to a point where consumers are going to make a decision to opt out of a restaurant if they can’t pay with their phone because they don’t carry a wallet. That is when we have to have mobile wallet payment options available. It’s about providing great service, but how quickly consumers adopt technologies is what will drive our priorities.
3 Must-Haves for Focus
Michael Verdesca, CIO, FOCUS Brands, Inc. offers his perspective on a trinity of necessities.
POS Integration: The POS or commerce engine must have integration and it has to work seamlessly, whether through a strategic partner or something we build ourselves. For example, if wearables are the next big thing, can we depend on six different partners to each make their apps work in that added way or do we need to control it ourselves?
Open APIs: POS vendors have to have open APIs. With mobile apps and payment technology evolving so quickly, the system has to be able to talk to anybody.
Insights: With technology changing so rapidly, it’s vital to build out insights to be consumer-driven and not vendor-driven. We all think we know the answer, but we don’t! Being a good listener is most the important thing we can do.