Modern Restaurant Management (MRM) magazine asked restaurant industry insiders for their perspection on 2020: What lessons did you learn and what do you feel the restaurant industry learned this year? Here are their responses. Click here for part one.
Scott Lawton, CEO and cofounder at bartaco
We have learned a lot of lessons this year for sure. Keeping our guests and team members safe remains our top priority and is the highest form of hospitality in these times. We’ve always seen bartaco as a place to escape, and providing that comfort allows our guests to relax, have fun, and feel transported for a while.
Keeping our guests and team members safe remains our top priority and is the highest form of hospitality in these times.
We’ve found our guests really appreciate and need that experience now more than ever. We have also learned that our guests are willing to try new things and have really embraced our touchless ordering system as well as our new takeout offerings. Our guests are not the only ones who have adapted well during this time – we could not have survived any of this without our resilient team members. We appreciate how our team shows up every day with positive attitudes, ready for new challenges and open to all of the operational changes thrown their way. We are so grateful to each and every one of them as well as our loyal guests for their continued support during this time.
Steve Martorano, owner of Cafe Martorano in Fort Lauderdale
You need to be quick on your feet and be able to reinvent what you’re doing and be flexible. Restaurants had to quickly adapt by adding outdoor seating while creating an inviting atmosphere, as well as offering the same experience your customers are used to receiving at your establishment via delivery and takeout. If you don’t learn to adapt and reinvent yourself, you’re not going to be successful, COVID or not.
If you don’t learn to adapt and reinvent yourself, you’re not going to be successful, COVID or not.
We realized how important transparency and communication were this year, both with our staff and our customers, in order to make everyone feel comfortable and feel safe. Everyone has been affected by this crisis in one way or another and now more than ever it's important to us to be authentic.
Barry McGowan, CEO Fogo de Chão
At Fogo, we learned very quickly that there is no limit to the kindness and generosity of people, especially when times get tough. As a longstanding partner of No Kid Hungry we knew that the forced closure of schools across the nation in March would result in thousands of children suddenly being left without subsidized meals.
That’s why we decided to donate 10 percent of sales of our off-premise take-out and delivery platform to No Kid Hungry. Thanks to the support of our guests, we were able to fund 2.6 million meals in just six weeks. Throughout the pandemic, we have also provided meals to local first responders, our team members and their families.
John Moezzi, National Account Manager, Sharp NEC Display Solutions
In order to survive the downturn brought on by this pandemic, operators have had to quickly adapt to evolving consumer behavior by offering contactless pickup and delivery as well as digital ordering and payment options. Operators that were already embracing an omni-channel approach have accelerated those efforts as a result of this evolving consumer behavior.
Operators that were already embracing an omni-channel approach have accelerated those efforts as a result of this evolving consumer behavior.
Colin Palfrey, CMO of Majesty Coffee
It's been an interesting year to be in the restaurant space.
Restaurants were previously about experiences, but it's impossible to deliver that experience when you can only stay open for takeout. Restaurants have had to get really creative to stay afloat this year and the industry has had to totally redefine itself.
Chris Prociv, VP Marketing & Innovation at La Brea Bakery
2020 has been an extremely challenging year for many reasons, but as a result, we at La Brea Bakery have learned so much and are entering the new year ready to adapt. With the pandemic limiting most dine-in services and changing typical customer buying behavior, restaurants were forced to pivot and find new ways to survive. Each individual obstacle, while likely frustrating in the moment, ended up teaching us all a lot.
The biggest takeaway we’ve had at La Brea Bakery is that we are here to serve our community, and it’s our job to put customers’ needs at the forefront. For example, with shoppers looking to make fewer trips to the grocery store, our Take & Bake breads have seen an increase in sales as they present the perfect opportunity to buy in larger quantities and store in the freezer for later use. As a result of this trend, we’ve shifted our focus to provide more Take & Bake options and even have plans to launch additional varieties of our Take & Bake breads in early 2021.
Each individual obstacle, while likely frustrating in the moment, ended up teaching us all a lot.
Additionally, to accommodate this increased demand for our La Brea Bakery Take & Bake portfolio, we recently adapted the operations at our Van Nuys bakery in Los Angeles to incorporate automated packaging capabilities and in-line bagging automation. The bakery, which distributes to grocery stores nationwide, is now built to better accommodate both customer and consumer needs while continuing to put the safety of employees and customers first.
Shyam Rao, CEO and Cofounder, Punchh
This year we witnessed how resilient our customers are. We’ve seen consumer behavior transform faster than ever before during the pandemic, and it’s been an incredible experience helping our partners adjust their business models to keep up with – and in many cases, ahead of – the ever-evolving times. We’ve also noticed the increased importance of loyalty programs at times like this. During the start of the pandemic, data show that sales from loyalty program customers dropped off more slowly and ultimately recovered faster than anonymous ones. Specifically, loyalty sales were 19 percent greater at their lowest point and reached pre-COVID levels six weeks quicker compared to anonymous sales. This is renewed confirmation that loyalty customers are the most valuable customer base for a company – and a helpful certainty amid great uncertainty across the industry.
We’ve seen consumer behavior transform faster than ever before during the pandemic.
The restaurant industry continues to face many pandemic-induced restrictions, and rather than giving up, brands have decided to innovate. They’ve reworked old models and introduced entirely new concepts to keep their businesses relevant, successful, and most importantly, safe. The seamless integration of customer engagement and loyalty technology into services such as online ordering and contactless pick up has been key for brands across the restaurant industry. It’s been an honor working with brands to enable them with the data and tools needed to take anonymous buyers and transform them into superfans, and to also lean into their loyal customers effectively to drive long term loyalty and ROI.
Bruce Reinstein, Partner, Kinetic12
Many restaurant brands were focused on a growth path that was not feasible. In some cases, it was simply to make money through a merger or acquisition. They continued to expand their menus to a point where inconsistency became more of the norm from market to market. Growing new markets and adding new franchisees became more important than maintaining the standards that the brand has focused on early on.
The restaurant industry learned, when forced to slow down and evaluate, that their brands had become too complex to consistently execute and that they were not focusing more on growth than on listening to their customers so that they could differentiate and drive incremental sales.
Andy Rosenbloom, VP, Marketing, Buyers Edge Platform
For me, the most unfortunate thing that happened in the restaurant industry this year is that so many restaurants lost so much revenue. Even worse, many were forced to close permanently.
It is my suspicion that a lot of the restaurants that closed were running rather inefficient operations that were not focused on utilizing best practices on both the revenue and cost side in order to drive profitability. I think the most important lessons that restaurants did learn this year is that they have to use all of the resources that are available to them to drive their own success.
Restaurant operators opened their eyes to the fact that same creativity needed to be applied to the profitability side.
Much attention has been paid in the media, on webinars, and among the public audience, to the creative ways in which restaurants are attracting new customers and meeting shifting customer demands. That same creativity needs to be applied to the cost side of the profitability equation. I think restaurant operators opened their eyes to the fact that same creativity needed to be applied to the profitability side.
There are some simple ways the restaurants can reduce their costs; namely: partnering with GPOs that bring instant savings to their bottom lines. Beyond that, there are attainable steps that restaurants can take including, sku rationalization, assessing utilities and other fixed costs, monitoring their inventories (recipe costs) and costs of goods sold, and auditing their contracted prices. All of which will bring significant savings to the operation and will serve to maximize the margins that they earn from the revenue that they bring in.
Raquel Rosenthal, CEO, Digilant
We've learned that the increase in digital consumption and e-commerce adoption that's resulted from COVID-19 has impacted QSR much like it has retail. QSR brands and the partners and agencies they work with have been hit hard with the reality that for digital transformation to be successful it must offer better choices and greater convenience to consumers.
To cut through the noise, 2020 has been the year that many QSR brands have pulled the trigger on CTV, programmatic audio and influencer ad formats. McDonald's, Chipotle and Firehouse Subs are some brands that have successfully risen to the occasion – offering easy options for ordering and fulfillment and spreading the word beyond traditional ad channels.
Lesson #1: Multiple factors are leading to businesses increasingly communicating via messaging – with both customers and employees. Gen Z continues to penetrate the job market, and with 30 percent of restaurant employees already aged 20 or younger, it’s important to know that 75 percent of this generation indicated they would rather text than talk on the phone. But that’s not the only factor pushing businesses to text messaging – in the restaurant industry, where part-time employment is common, communicating with employees outside of scheduled shifts expedited responses while being perceived as less disruptive than calling.
Meanwhile, texting with customers strengthened customer satisfaction results with faster and more convenient updates, confirmations, reminders and troubleshooting. In a separate survey, 75 percent of millennials indicated they find text reminders for appointments, deliveries, payments, promotions, and surveys helpful, and our research indicates there was a 393 percent increase in restaurant text-to-order revenue between March and June of 2020.
Texting with customers strengthened customer satisfaction results with faster and more convenient updates, confirmations, reminders and troubleshooting.
Lesson #2: The gig economy propelled small businesses and restaurants. American businesses and employees took advantage of the jobs available through the gig economy, primarily due to flexible working conditions. Restaurants saw exposure to new customers by utilizing a food delivery service and reported a 20% increase in check sizes from delivery orders versus dine-in. In 2020, Uber Eats expanded their network of supported restaurants to 500,000 from 220,000 in 2019, and gross bookings from $14.5 billion to $25 billion. Intuit reports that by 2021, the gig economy will surge and add 9.2 million more Americans to the gig workforce.
Lesson #3: Curbside and takeout helped restaurants make up for reduced foot traffic. According to our research, there has been a 748 percent increase in check-ins for curbside orders since the onset of the pandemic. Customers discovered they could save time by avoiding the hassle of parking and not going inside a store or business. According to research from Technomic, 40% of Americans took advantage of takeout and curbside delivery (at both fast casual and dine-in) during the pandemic.
Lesson #4: Reviews gained in quantity and importance.
A positive reputation online builds trust with customers and boosts search engine optimization, both of primary value in the restaurant industry. According to BrightLocal, 82 percent of consumers read reviews for local businesses, and 48 percent specifically only paid attention to reviews written within the past 2 weeks. However, don’t assume your customers will be understanding of a poor takeout experience during COVID-era dining.
Dan Rowe, Founder & CEO, Fransmart
I’ve learned many lessons this year that go hand-in-hand with what the restaurant industry has learned, including that everything goes in cycles, timing is everything, supply and demand shifts are real, and there will always be change and the need to change fast.
Even in the worst of times comes innovation.
Even in the worst of times comes innovation, and the industry has demonstrated unique and creative ways to combat the pandemic, ranging from menu changes to pick up and delivery strategies. No one is safe from shifts and cycles, or highs and lows in supply and demand, as we will all experience crises or recessions when we’re least expecting it. Many chains were extremely close to bankruptcy due to the surprise of the pandemic, so always remember to save for a rainy day. Making sure you have emergency funds to fall back on can make or break an entire business.
It’s also important to remember that safety always comes first, and this pandemic has reiterated to us that safety measures and precautions should be taken very seriously to keep employees and customers safe and operations running smoothly.
TJ Schier, President and Founder of Incentivize Solutions and S.M.A.R.T. Restaurant Group
The industry learned many expensive lessons this year. First and foremost, we saw the heart of the industry, as we all worked together and continued to feed those in need even when many of the restaurants were closed.
We learned how important it is to not be too dependent on one revenue-channel.
Second, we learned how important it is to not be too dependent on one revenue-channel. Curbside, digital, off-premises – none of it is new but those who had these strategies and tactics in place are the ones who are thriving while others struggle to survive. Third, we all learned we need to be more involved locally in supporting diversity, inclusion and voting to ensure those elected have our best interests in mind when they enact legislature.
Finally, it has reinforced and magnified how resilient those in this industry are: we are ESSENTIAL workers!
Karen Schloss of New Jersey-based dsc/ diaz • schloss communications
#1 – We all RE-learned how vital restaurants, coffee bars and bakeries are to a vibrant, healthy community. Especially in this gig economy, when so many worked from home even prior to COVID, we took for granted how easy and safe it used to be, scheduling business lunch meetings and coffee shop meetups. When restaurants had few customers and were making barely enough money to pay the rent – what did they do? Donated thousands of scrumptious meals to essential workers and the hungry via food pantries in their communities. Amazing. They give and give and give.
#2 -A business can't do just one thing; it has to be nimble. If you previously didn't do takeout (like Serenade in Chatham), you adjust your menu/kitchen and start takeout. Jockey Hollow partnered with local businesses and created a mini farmers market, then a wine shop for another revenue stream. Osteria Morini in Bernardsville got creative with outdoor Sunday BBQs and a holiday bake shop. Even local governments complied and allowed "cocktails to go" for the first time ever! Flexibility and innovation are key words now and moving forward.
Bart Shuldman, Chairman and CEO, TransAct Technologies
The restaurant industry experienced a five-year technological and operational evolution in a matter of months during this pandemic. For many years now, the restaurant industry has been adopting digital solutions to improve operational efficiencies that ultimately benefit both the customer and staff. This adoption was understandably sped up out of great necessity this year.
For example, operators are now relying on staff health checks prior to a work shift. Our solution, BOHA!, allows managers to record those health checks, as well as stores, tracks and verifies the data for reliable, real-time monitoring and reporting. Digitizing operational record keeping such as this provides ease of accountability and instills confidence in staff and guests that their safety and well-being is top priority.
Jennifer Schuler, CEO of Wetzel’s Pretzels
This is a trying time for many restaurants but in general, however, the shift in consumer behaviors toward grab and go, delivery and drive-through does create an opportunity for QSR. For example, as dining options are limited in the mall, consumers are using Wetzel’s more like a mini-meal. We are safe, quick, fresh, grab and go food that you can consume outside the mall, in your car or at home. This is increasing our average ticket and getting us thinking about how we can continue the momentum of being a mini-meal for consumers.
The shift in consumer behaviors toward grab and go, delivery and drive-through does create an opportunity for QSR.
The most notable development that we’ve seen throughout the industry (and, yes, we’re doing it as well) has been restaurants flexing their concepts. You should always be working to innovate and reinvent, but COVID kicked everyone’s butt into gear. Right now, restaurants are finding ways to stay true to their core business while creatively bringing their product to the people. As we’ve flexed our concept and adapted, we’re seeing other restaurants across the country do the same.
For Wetzel’s, we are seeing growth in non-traditional development – with an increase in food trucks, delivery and mobile orders. Pre-COVID, our internal rallying cry was “Bring Pretzels to the People” and we’ve seen that shift toward other venues increase dramatically in a COVID environment. We’re finding more ways to go where the people are and flexing our format and business model to enable it.
Mandy Slater, Co-owner, 9 Mile Station
This year, we learn to be incredibly resourceful. We’ve had to shift around people and some employees have had to do multiple jobs. We’ve had to be more creative with limited financial resources and not rely on a steady stream of business. No one is taking anything for granted and every guest, every sale is appreciated. I think the entire industry has learned this as well.
You can see from creative take out businesses that people have had to develop creative family meals to go, and even offer delivery service. We’ve just all had to find ways to get our product in people’s hands when they couldn’t come to us in a traditional way.
Atul Sood, Chief Business Officer, Kitchen United
Over the last year, we’ve witnessed the resiliency of the restaurant industry and learned very quickly the importance of pivoting with more to-go offerings amidst a new and unprecedented normal.
At Kitchen United specifically, we’ve seen a shift in demographics from primarily millennials and Gen Z using our service, to baby boomers and GenX’ers, who are eager for more delivery and take-out options than in years past. We’ve also noticed an increased interest in family style meals during this time, as many people are looking for convenient and delicious options for the entire household.
Jon Taffer, Founder, Taffer’s Tavern and host of Paramount’s Bar Rescue
The restaurant industry learned how blessed we were. It’s been a year of self assessment—a complete business assessment and greatly reduced resources. I have a new view of the level of sanitation and employee safety. There is an enhanced responsibility and tehchnolgy is in everything attached to safety.
Taka Tanaka, CEO of AUTEC Sushi Robots
First and foremost, I learned that we were not alone during this crisis. Our partners, vendors, and clients were going through the uncertainty, and we quickly came together to maneuver through the unknown. I also learned what it meant to have business agility. The pandemic turned our world upside down, and we had to adjust relatively fast on how we moved forward with our strategies and operations nimbly and safely.
Should another COVID-19 wave occur, consumer dining habits will fluctuate again, and the need for technology will continue to increase to embrace the change.
2020 has been an unusual and devastating year for all businesses, especially the restaurant industry. After speaking with restaurant owners, I noticed there was a common theme. Restaurants who quickly adapted to the change in the industry survived, if not thrived.
One of the crucial things that the pandemic has taken away from restaurants is using their hospitality services to lure customers to their business. Technology has become the forefront solution to these challenges. Even those who initially rejected folding in technology are now adopting delivery platforms, contactless payments, and investing in kitchen automation like our sushi robots to survive.
Should another COVID-19 wave occur, consumer dining habits will fluctuate again, and the need for technology will continue to increase to embrace the change.
Mark Toth, Founder, Urban Wok
Urban Wok learned that your operation needs to be flexible, technology plays a huge role in your ability to pivot, change etc and third party delivery is a great thing – if you price accordingly and if you do it will work! I believe the restaurant redefined the word innovation – creativity, problem solving and an open mind are paramount in this industry more than ever before.
Sara Tucy, Director, Restaurant Client Strategy, Valassis
The industry learned that very few restaurant brands have intimate relationships with consumers.
The industry learned that very few restaurant brands have intimate relationships with consumers.
When the pandemic began, messaging shifted toward safety and wellness, and the resulting interactions were clunky as consumers had not built this type of trust with the brand. In a way, this leveled the playing field among restaurants, and those that were able to quickly deliver safe, convenient experiences – whether it be takeout, curbside, family bundles or delivery – managed to develop stronger relationships with consumers.
Danny Turner, Global SVP of Creative Programming, Mood Media
With the pandemic causing unease in consumers at dine-in restaurants, brands have learned they need to provide a sense of safety and comfort through holistic experiences, both online and offline. For example, more restaurants are forging stronger connections to diners through social media and email outreach with messages that inform restaurant-goers about dine-in safety regulations, guidelines, special discounts and promotions.
Operators around the globe are discovering unique and innovative avenues to still serve their core markets, but in different ways.
We’ve seen a massive shift to take out and curbside. Some restaurant partners are reporting incredible opportunities super-serving the take-out market. Take-out has evolved so much from being a last resort to being a first resort. One food critic in Washington DC dined exclusively with take-out only from Michelin star-rated restaurants during the month of November. Operators around the globe are discovering unique and innovative avenues to still serve their core markets, but in different ways. The consumer feedback has been incredible, and stronger connections are being formed as a result that will last well beyond the pandemic.
Carl Van Ostrand, VP of Consumer Insights, DISQO
Pandemic aside, both attitudinal and behavioral data predict that customers won't stop using digital meal delivery services, so every brand needs a plan for fostering takeout and delivery in 2021. Restaurants should do their research to determine which digital solution will best serve their customers, while maximizing margins and operational efficiencies. They should also consider surveying clients and staff to understand their needs and preferences.
Even after we have developed a vaccine and life returns to normal, people will continue to use these convenient and user-friendly services. By building out these capabilities now, restaurants will be well-suited to weather the repercussions of COVID-19, to earn customer trust and to stand out in what is sure to be a digital-first future.
Farrellynn Wolf, CEO of Goodcents
We all know this, but 2020 taught some huge lessons about how important it is to be flexible and keep your focus on guests. We were fortunate that in January, we began rolling out a new product line called Goodcents To Go, which are prepared, prepackaged dinners such as fresh grilled Alaskan salmon and chicken Alfredo. It was just before the pandemic hit, and our customers loved how easy they were to pick up and eat at home.
We also were out front with a grocery program. As supermarkets struggled to keep up with demand, we began selling our deli meats and cheeses for $5 per pound and freshly baked loaves of bread for 75 cents per loaf. The convenience and price made it an exceptional value for our customers and brought in substantial revenue for our franchisees at a critical time. Most importantly, it was the right thing to do for our community.
Justin Worster, Performance Strategy Manager, VDX.tv
In 2020, restaurants saw resilience in off-premise ordering. Despite economic conditions and a pandemic, consumers were still likely to frequent restaurants, and specifically QSRs, for takeout/delivery meals. As a result, casual dining restaurants were forced to pivot to limited menus to service off-premise demands.
Overall, we are seeing the industry take lessons from QSRs — adapting menus, safety measures and pricing accordingly.
An interesting takeaway from this year’s course of events is the continued success of QSRs, which made mealtime decisions easier for families. Overall, we are seeing the industry take lessons from QSRs — adapting menus, safety measures and pricing accordingly. In fact, most casual dining restaurants now feature new, limited menus and family bundles to appeal to value-diners. With COVID-19 cases climbing back up, we can safely assume that restaurants will continue to have strong off-premises offerings that ensure safety, convenience and value for the average consumer.
Le Zhang, CEO and Founder, Squadle
2020 was the year of the QSRs, which proved to be uniquely qualified to continue serving guests in the face of a worldwide public health crisis. Pizza, sandwich, coffee and other QSR brands were well prepared for the pandemic. Thanks to their emphasis on takeout, delivery and drive-through service, most were able to pivot quickly from dining room service to 100 percent takeout service. However, these businesses are still looking for ways to improve the dining experience that they offer to guests and continue adopting innovations such as contactless service and food safety technology.
Despite, or perhaps because of, Covid-19, QSRs continued to thrive in 2020. McDonald’s 2020 Q3 financial results were among the brand’s best ever. Massachusetts-based coffee shop Dunkin' Brands was purchased by private equity-backed Inspire Brands largely due to its pandemic-proof earnings.