Restaurant of the Future: Restaurant Reinvention

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.” 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. 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.” 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.

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