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Restaurant of the Future: Restaurant Reinvention

9/29/2020

Shake Shack is rolling out curbside pickup with contactless payment.

When it comes to the restaurant experience, consumer expectations have been reprioritized in recent months, to say the least. 

Safety − including everything from sanitation, employee wellness, food prep, air quality to ventilation − is top of mind. Even as restaurants reopened with reduced capacity, increased sanitation and contactless technology, diners have not rushed back to dining rooms. 

About 33% of Americans are looking forward to dining out again, and one in four (27%) of Americans surveyed say they do not feel comfortable dining out until there’s a vaccine, according to the Restaurant Reckoning: Dynamic Diner report by SevenRooms. 

Off-premises dining, including takeout, delivery and drive-thru, is capturing the lion’s share of restaurants’ current sales. It’s a trend that has been on a meteoric rise in recent months and will perhaps rise to new heights as seasonal, outdoor dining starts to dwindle in most areas of the US.

Changing Consumer Expectations

Consumers are spending more time online, including ordering food. It checks two of consumers’ boxes: it's perceived as a safer alternative to in-store ordering and it is convenient. More than 60% of consumers have ordered online in the past 12 months, a 10% increase over the previous year, according to Tillster’s 4th Annual Consumer Survey.

Consumers are increasingly going mobile; 90% ordered through a mobile device — up 30% from last year, and 90% of consumers surveyed expect their restaurant apps to offer mobile ordering, up 14% from last year, according to Tillster’s research.

For restaurant operators in the fast casual and QSR space, a mobile app integrated with loyalty and payment is table stakes. “Since COVID-19 there is a massive uptick in making sure everything is talking to each other,” says Hope Neiman, CMO of Tillster.

Design of the Times

With the surge in mobile ordering and preference for off-prem, restaurants are rethinking their brick-and-mortar stores. In some cases that means a smaller or no dining room altogether.

For locations that are already up and running, there’s a shift to optimize the existing footprint for off premises. Chipotle Mexican Grill has been adding digital make lines, and where possible, adding walkup windows and drive-thru for digital orders. Starbucks too is adding walk-up windows to select urban stores. The coffee retailer will open 300 new stores including mobile-order only, and those with a drive-thru and/or curbside.

Shake Shack too is among the brands planning what it can do now and in the future to meet consumer demands. Curbside has been “a solid addition” as guests are increasingly concerned about safety and seek out experiences that make them feel safe, explained CEO Randy Garuttti in a Q2 earnings call with analysts. “Our intent is to further the progress we've made during COVID-19 across digital channels and to facilitate more preorders with a seamless pickup experience.”


A Moe’s Southwest Grill franchise in Pittsburgh has opened a new store that only accepts digital orders and retrofitted another, both with off-prem in mind.

The Need for Speed

A surging demand for mobile order-ahead was a major influence in one Moe’s Southwest Grill franchisee’s remodel and new store design. Both locations feature smaller dine-in areas and larger kitchen areas. 

Located in the Market Square neighborhood of Pittsburgh, Moe’s was remodeled to include a second make line and a dedicated entry for digital order pickup. Franchisee Mike Geiger’s newest and tenth location, in the Oakland area near Carnegie Mellon and University of Pittsburgh, expands the use of technology, only accepting digital orders – via mobile or in-store kiosks.   

“We knew operationally what we could expect volume-wise,” he says. “The solve was: how to operate and execute a high volume of orders?” The (partial) answer: a kiosk ordering system four Nextep kiosks powered by Revel Systems’ POS, which is perfect for its clientele, mostly tech-savvy students who prefer to text vs. talk. 

The Oakland location, which opened in June, has an even split of orders from kiosks and the Moe’s app, he says. 

“Service with speed is an imperative element to this operating model, and newer technology solutions that help us solve for that are something that we will continuously be looking at,” Geiger says. To that end, his team has installed KDS screens on the second lines and added a guest-facing order status monitor, “which are both proving to be impactful to the overall guest experience,” he adds.


Preference for Pickup

Just last year, more than 60% of dining occasions were off-prem, and 75% of restaurant operators now consider off-premise dining to be their best growth opportunity, according to the National Restaurant Association’s State of the Industry 2020 Report.

Buffalo Wings & Rings CEO Nader Masadeh says the Cincinnati-based sports bar was already seeing off-prem demand increase before COVID-19 and was looking to solve some of the challenges, such as streamlining the order pickup process. It’s new prototype in Milford, Ohio, features a valet pickup area with two lanes that are dedicated to off-prem and delivery order pickup. The kitchen too has been reconfigured for off-prem orders. Based on consumer research, the concept too has shifted its part of its dine-in area to a self-service Beer Me casual hangout area with digital ordering points including order and pay at the table.  Guests can hang out and watch a game, order craft beers and food at their own pace. Masadeh doesn’t see dine-in returning to its former numbers any time soon. “The successful ones and the ones that have made in general have adapted to the new normal,” says Masadeh.


To use Domino’s Pizza’s contactless carside delivery, customers notify the store when they arrive by hitting the “I’m here” button on Domino’s Tracker page or by replying “HERE” to Domino’s opt-in SMS.

Curbside Convenience

Consumers are looking for increased convenience and contactless transactions. If easier forms of pickup, like curbside, were available, 60% of customers would increase ordering for pickup, according to Tillster’s research.

Many brands have responded by adding curbside pickup, especially where there isn’t a drive-thru, and even where there is one.  McDonald’s, Moe’s Southwest Grill, Shake Shack, Twin Peaks, Brinker International, Dunkin’, Noodles & Co. and Starbucks, to name a few. 

Industry innovator Domino’s Pizza added Domino’s Carside Delivery to its list of contactless pickup options. Listening to customer feedback, Whitewater, Wis.,-based Toppers Pizza quickly added contactless curbside pickup this spring at its 60+ locations. “Our customers wanted the option to pick up food and not pay delivery fees,” said Tony Ellis, VP of IT.

Similar to Domino's GPS delivery tracking technology, Topper’s tracker feature lets guests know when their pizza will arrive. And soon, Buffalo Wings & Rings and Toppers will add a feature to their apps that will enable customers to notify the restaurant when they arrive.


Curbside 2.0

Just as in the drive-thru, speed of service matters at curbside. Customers who wait under two minutes for an order are four times more likely to repeat purchase from the same retailer or restaurant, according to the new Rakuten Ready 2020 Time Study.

To streamline the customer pickup experience, reduce wait times and maximize BOH efficiencies, brands are adding predictive arrival technology.

El Pollo Loco is rolling out GPS-enabled curbside pickup at every one of its restaurants, with the app and loyalty program as the conduit. City Barbecue and Hooters recently implemented Radius Network’s FlyBuy Pickup that empowers customers to let their restaurant know they’re on their way to pick up their food order.

“All indicators point to an increase in off-premise demand,” said Marc Butler, SVP Strategic Planning & Off Premise at Hooters, in a statement. “…Whether the customer wants curbside, in-store pickup or delivery, FlyBuy Pickup provides us with all of the information we need, all in one place, for a completely seamless experience.”


FlyBuy curbside pickup technology is integrated with Hooters' ordering system − app, online and phone. The customer’s ETA is immediately sent to Hooters, along with location updates as the customer makes his or her way to the restaurant.

An Integrated Solution

Here’s how it works at Hooters: FlyBuy Pickup integrates with the existing ordering system. The customer’s ETA is immediately sent to Hooters, along with location updates as the customer makes his or her way to the restaurant. Restaurants can perfectly time the food readiness with the arrival of the customer or delivery driver, which decreases food waste, increases staff efficiency, reduces wait times and improves customer experience.

Radius’ solution, which is also used in the retail space, is a combination of proprietary technology, including GPS and mobile sensor data, that tracks the customer’s location along their journey to the restaurant.

Kitchen Matters

Brands have been flexing creativity in recent months, optimizing their menus to focus on best sellers, selling beer, wine, cocktails and liquor to off-premise customers, retailing meal kits and more. Some restaurants are capitalizing on their brand by teaming up with ghost kitchens.

Smokey Bones BBQ expanded to Chicago through a partnership with Kitchen United, not only to offer its namesake barbecue but also to launch two virtual restaurants – The Burger Experience and The Wing Experience.

Smokey Bones has made “significant investments” in technology including new hardware and upgrading to the latest version of NCR’s Aloha POS, adding Olo, table management, updated ecommerce and loyalty, CEO James O’Reilly explains. Technology will be a “key growth driver for us as we move forward,” says O’Reilly. “It is a great equalizer these days and enables us to compete like a big company.” 

Virtual brands that are available for delivery-only are on the rise. Lettuce Entertain You in Chicago rolled out Bon Appetit and Whole 30 brands last year, and rapper Wiz Kalifa is rolling out his own delivery only brand in 8 U.S. cities in Q4.  And what’s on track to be one of the year’s biggest success stories, Brinker International is leveraging its existing resources, including dining room tech, underutilized kitchens and staff, to meet consumer demands for the comfort food favorite – wings. 

At Restaurant Next, Brinker’s SVP Innovation Wade Allen gave the inside scoop on how the parent company of Chili’s Grill and Bar and Maggiano’s Little Italy successfully repurposed existing dining room tech and added some new tech to roll out It’s Just Wings virtual brand, which is on track to top $150 million in sales in its first year. “The parking lot is the new dining room,” says Allen. 

New Designs for the New Normal

QSRs and fast-casual restaurants are redesigning their restaurants to optimize off-prem, and that includes increasing the number of, and the throughput of, drive-thrus. Demand for drive-thru has been at an all-time high during COVID-19 as consumers prefer the convenience and safety of staying inside their cars.

Drive-thru restaurant visits increased by +26% in the April, May and June quarter and represented 42% of all restaurant visits, according to research by The NPD Group’s daily tracking of U.S. consumers’ use of restaurants and other foodservice outlets.  

At Noodles and Co., newer locations with drive-thrus are stars of the class, outperforming locations without drive-thrus by double digits.  And the good news continues: the average transaction was only one minute, said CEO Dave Boennighausen, in the Q2 earnings call with analysts. The fast-casual brand’s digital sales have skyrocketed 135% in recent months.

Burger King, KFC, Taco Bell and Shake Shack are among the brands that have revealed how their digital efficiencies and contactless conveniences will influence their future store designs. What they all have in common: they leverage a mobile app and have curbside pickup, drive-in and drive-thrus.

In July Sonic Drive-In debuted its new store design in Tahlequah, Oklahoma, that features 18 drive-in docks, a drive-thru and a covered outdoor patio. The brand’s Mobile Order Ahead platform allows guests to use contactless ordering and payment.

Burger King revealed new restaurant designs are about 60% smaller than existing locations. Features include dedicated mobile order and curbside pick-up areas, drive-in and walk-up order areas, enhanced drive-thru experience with two or even three drive-thru lanes, and exterior dining spaces. Guests using the drive-in feature can place their orders in the app or by scanning a QR Code. Guests and delivery drivers will be able to pick up orders from coded food lockers facing the exterior of the restaurant. New locations with these designs will open next year in Miami, Latin America and Caribbean.

Taco Bell Go Mobile design includes several digital enhancements and a footprint that’s almost 50% smaller than an average 2,500-square-foot Taco Bell. The first location is scheduled to open in Q1 2021 and features two drive-thru lanes, including a priority pickup lane for customers who order via the Taco Bell app. Tablet ordering will also be used in the drive-thru. When customers opt in to the Taco Bell app, the restaurant will detect when guests have arrived and suggest the quickest route for a seamless pick-up experience. Curbside is another off-prem option. The brand is also adding “bellhops,” a concierge service team that will man the curbside pickup and tablet ordering in the drive-thru.

Automation Nation

QSR White Castle is pushing the innovation envelope with several exciting technology pilots including Miso Robotics Flippy, Robot-on-a-Rail (ROAR) that automates the fry station and includes computer visioning and AI.

For example, if the burger line is backed up 10 minutes, Flippy adjusts the time to drop the fries, and makes sure there’s cheese on the burger, and everything that is supposed to go in the bag, goes in the bag including sauces.

The QSR is also piloting AI tech for vehicle recognition and voice ordering in the drive-thru. At Restaurant Next, Susan Carroll-Boser, VP of IT, and Michael Guinan, VP of Ops, will share the White Castle’s vision for its drive-thru of the future and the plan behind the brand’s loyalty program, and more. 

Now and in the future, automated solutions have broad appeal for QSRs, fast casual brands and ghost kitchens.

“Now everyone is concerned about speed of service. If you drive 15 minutes to deliver, you have to make sure you have a high-quality item,” says Buck Jordan, CEO and Co-Founder of Miso Robotics. 

The detriment to robotics is the cost. Currently Flippy runs about $30,000 plus $1,500 month service fee – which puts it firmly out of reach for many restaurants. Miso has launched a robotics as a service (RAAS) model and hopes to get the unit cost down to 0 next year, Jordan says.

About the Author

wolfe

Anna Wolfe

Anna Wolfe is Hospitality Technology’s senior editor.  She has more than 15 years of experience as a B2B journalist writing about restaurants, retail and specialty food.