Beyond the Four Walls: Why Now Is the Time for Restaurants to Leverage Digital

No one knows what the future of foodservice looks like, but there are crucial hints in the data, analytics and e-commerce.

If we have learned anything during the last few months, it is that sticking to the, “it’s how we have always done it,” mentality won’t position restaurants for recovery. Leaders across all business sectors are accomplishing changes in days or weeks that normally would have taken months or years. Those pivots are also reflected in the digital world, in which websites that previously offered little more than a business’s name, address and phone number now have much higher consumer requirements. 

Why? Data.

Data shows that a large part of the consumer experience has extended beyond the four walls. Thus, e-commerce is quickly moving front and center.

No one knows what the future of foodservice looks like, but there are crucial hints in the data, analytics and e-commerce.

In 2020, too many restaurant websites are still little more than digital brochures. Maybe they offer reservations or off-site ordering options, but those are nearly always offered through a third-party platform. Ultimately, the goal of these websites is to drive customers to the restaurant; they aren’t capturing much actionable information.

In the post-COVID landscape, pick-up, delivery, and loyalty (offers, incentives and gamification) are going to be essential revenue streams for virtually every restaurant. That means many restaurants are going to have to dramatically change their operations, but it also opens up a new way to collect valuable insights.

The essential change most restaurant owners need to make is to start thinking of their restaurant as an online business.

Of course, collecting that data is one thing, and interpreting it is another. That’s why it’s essential to partner with providers who don’t just set you up with the platforms best suited to your needs, but who are also able to interpret the data and provide actionable insights to help your business grow. That means restaurants — especially restaurants who are just dipping their toe into data and analytics for the first time — should not go out and spend a million dollars on tech solutions tomorrow. Rather, they should start to investigate partners and platforms and make careful, small investments in the ones that seem the best fit, then use the insights from those partnerships to guide further investments.

The right digital partners and platforms can give your restaurant invaluable insights into not only your sales but also into how your competitors are performing and why and when customers are choosing them over your business. You can learn how people are getting to your website, whether or not they are visiting competitor websites before or after, and how many of those visits are converting to sales.

Loyalty programs, for instance, have come a long way from the old punch-cards sub shops used to hand out. Today, a well-built mobile app can strategically offer incentives tailored to consumer preferences and keep customers coming back at key operating hours. By analyzing the data your app collects, you can tweak those incentives to become more effective over time.

That same data can be used to guide marketing. If you find that 90 percent of your users are checking the app around noon, you can schedule ads with enticing images of your best-selling food items to pop up around 11 a.m., putting cravable food on top of customers minds just before they start their lunch search. 

Crucially, data that is carefully collected and analyzed can also help managers make essential cost-benefit decisions regarding virtually every aspect of the business. Finding which vendors offer the most bang for the buck or which third-party delivery service is worth their fee can be reduced to simple addition and subtraction. Perhaps you’ll find that the amount you're giving up in fees to a third-party provider is more than the cost of building out your own delivery service.

There are also some advantages to be found in new social-distancing norms. Venmo, for instance, offers customers a contactless way to pay, but it also allows restaurant owners a far more accurate view of spending than they can from counting cash at the register. Studies have also shown that iPads and other e-commerce hardware are more effective in driving upsells compared to traditional server-customer interactions.

If restaurant owners plan to stay in business, let alone thrive post-coronavirus, they need to leverage every available resource, and for an industry largely steeped in “the old way” of doing things, that means learning some new tricks, and fast.

Data is key to optimizing any business, and that goes double for the restaurant industry, which is struggling to stay ahead of rapidly shifting consumer habits while minimizing waste and overhead. Fortunately, there is more data available for restaurants now than ever before. Since the arrival of the coronavirus in the U.S., internet usage is up 50—70 percent, and e-commerce platforms are capturing valuable new insights on consumer spending. But to take advantage of this deep well of information, restaurant owners, entrepreneurs, and managers need to stop thinking of their businesses as exclusively brick-and-mortar enterprises.

It’s hard to build and run any business, let alone one centered around a product that you create in-house every day. But in order to survive, restaurant owners are going to need to start accepting that they personally don’t know everything about their customers, and they need to be flexible and adjust to changing consumer preferences. That means keeping an open mind, trying new things and following the data. The restaurant industry isn’t going anywhere, but it’s changing. There is plenty of opportunity for those restaurants who are willing to change with it.

As states across the country slowly begin to reopen, restaurant owners are cautiously hoping for a quick influx of pent-up consumer spending to revive their businesses over the summer, but few are anticipating anything close to a return to the pre-COVID normal. Many states are imposing significant capacity restrictions, diners are going to be leery about eating in public and record-high unemployment will substantially hamper non-essential spending. Those circumstances point to slim times for an industry that operates on razor-thin margins even in the best of times and is now coming out of an unplanned 10+ week hiatus.