The United States is facing new outbreaks of coronavirus as experts continue to warn of a potential second wave this fall. Meanwhile, the recovering hospitality industry – which was estimated to have lost $120 billion by the end of June– is bracing itself for potentially another round of mandated restaurant and bar closures. However, this round of closures doesn’t have to mirror the first wave. Hospitality operators can take steps now to not only ensure an easier transition but also maintain revenue streams and guest loyalty even if on-premise dining goes away.
Diversifying Revenue Streams
Reclosing is not something anyone wants to think about as it comes with a lot of uncertainty, especially around revenue. But, if contingency plans aren’t created for it now, operators could face even larger challenges down the line. To keep revenue streams open amidst changing conditions, operators should look to diversify how their customers can access their services, in particular with a focus on off-premise revenue.
Many operators were able to pivot to delivery or pick-up offerings when dining rooms closed. In fact, 92 percent of restaurant traffic is [currently] off-premise (i.e., drive-thru, curbside pick-up, etc.). As operators plan for potential reclosures, they should make sure their delivery and pick-up options are stronger than ever before and prepped for an influx of traffic. By incorporating technology-driven solutions, like direct online ordering for delivery and pickup, operators can own and utilize guest data to not only gain access to key customer insights, but also engage with them in new, unique ways. And the benefits don’t stop there. By offering a direct online ordering solution to guests, operators are able to drive more profits with low to no commission fees — a savings of upwards of 30 percent per order.
Operators must also get creative with guest offerings. One way this can be done is by leveraging beverage sales alongside traditional menu items, like establishing curbside to-go sales, adding the option to order cocktails, beer or wine for delivery and pick-up, or even hosting virtual events to showcase talented sommeliers and bartenders. This provides a new way for customers to interact with their favorite restaurants, while also driving revenue from a completely new – and profitable – stream.
Collecting Data to Build Customer Loyalty
Operators should also look to technology solutions to build customer loyalty and help bolster revenue. By implementing data-driven solutions, like contactless order and pay, while still “open”, operators can collect and capture guest data to help them create personalized, tailored experiences that are as impactful off-premise as those created in a dining room. These tailored experiences help them build and maintain strong, direct relationships with guests, even if their dining rooms are closed.
For example, imagine if someone in New York City today chooses to dine outside at one of their favorite neighborhood spots. Upon arrival, they access the menu by scanning a QR code with their phone to both order and pay for their items directly from their personal device. By doing so, the guest has utilized a tech integration, making them feel safer, and also provided the operator with useful data – including their dining preference, dietary restrictions, and contact information – that can help them personalize future interactions.
Should operators have to close their doors again and pivot to a delivery-only model, they can then use this same data to their advantage. They’ll know exactly what kind of special promotions or offers each specific guest would be most interested in to encourage them to place a subsequent order online. Given that 63 percent of diners say discounts and promotions play an important role when considering restaurant options, being able to create and offer these tailored promotions could be make or break from a consumer decision-making perspective.
Prepping All Systems
Revenue and customer loyalty aside, operators also need to be one step ahead when it comes to their day-to-day operations and planning. There may or may not be ample lead time when it comes to reclosing your doors. With this in mind, it’s more important than ever to have communications – like PR statements, social posts, email blasts, reservation cancelation notifications, and more – pre-drafted and ready to be implemented at a moment’s notice in order to keep guests notified and aware of your plans.
Outside of just communication, it’s imperative that operators make sure they are ready for changes to capacity restrictions as well. They should look to have alternate floor plans set in place for various potential capacity limits for both indoor and outdoor dining, and keep these layouts preloaded in their reservation and table management systemto switch between at a moment’s notice.
In addition, operators should have a plan in place for operating at a limited scope to reduce overall costs. As it stands, 76 percent of people have no problem with restaurants offering a reduced menu upon reopening, so operators should not worry about cutting back offerings or having limited pick-up or delivery options, if needed, to keep their doors open.
While no one can predict exactly what a second wave of closures will look like, it’s important for operators to learn from the first wave and be as prepared as possible. By thinking one step ahead, incorporating technology and creating a plan for alternate revenue streams, customer loyalty, and daily operations, operators can ease the burden of reclosure and prepare themselves to not only survive, but emerge stronger and ready to serve their customers – no matter the situation.