Rebecca McFarland, Flybuy Good morning, everyone.
My name is Rebecca McFarland and I’m the Vice President of Marketing at Radius Networks. I want to welcome you today to our 7th episode in our webinar series: Strategies for Growing Off-Premise Restaurant Sales in 2021.
We have some really impressive brands here today who are going to help us explore how to navigate the ever-changing restaurant landscape. Feel free to leave a question in the comment box for us during the webinar, and we’ll answer them at the end if we have time.
A few topics we’re going to touch on today are: the shift from dine in to off-premise during COVID-19; ensuring the same quality food experience in restaurant and off premise; the power of mobile order ahead; and innovations coming in 2021.
I’d now like to introduce you to our panelists. We have Clive West who is joining us today from the UK. Clive is the International Service Director of Domino’s UK. He started there in 2016, and he is now the group’s digital director. He’s previously held senior digital and retail operation roles at Halfords and Asda.
Sid Desai is the Vice President of Technology Strategy and Digital Operations at Tropical Smoothie Cafe, where he leads all technology strategy, day-to-day operations, and cafe support for nearly 900 cafes nationwide. Prior to joining Tropical Smoothie, he’s worked in multiple technology leadership roles at SunTrust Bank, UBS, and Accenture.
Teresa Kim is the Vice President of Ops Services at Church’s Chicken and leads all off-premise, operation and technology innovation. Prior to joining Church’s Chicken, Teresa worked at Red Robin and McDonald’s.
Scott Gladstone is the Vice President of Strategy and Development at Applebee’s Neighborhood Grill and Bar and is responsible for developing off-premise channel expansion. Prior to working at Dine Brands, Scott worked at the Boston Consulting Group and Bear Stearns.
Last but not least, I want to introduce you to our very own Jeff Baskin who will moderate the discussion today. Jeff is the Executive Vice President of Global Partnerships here at Radius Networks and is spearheading the growth of our location-based curbside pickup and off-premise solution, Flybuy. Jeff has over 20 years of experience in omnichannel retail, merchandising, and customer experience. So please welcome Jeff Baskin who will take it from here.
Jeff Baskin, Flybuy Great. Thank you so much, Rebecca. And happy holidays to everyone.
I’m really excited that we were able to get this group of people together from these really prestigious brands, especially with the end-of-the-year scramble, the holidays, 2021 planning. I really know how busy you all are. So I really appreciate you taking the time to share your insights on the industry today.
As we have in our prior webinars, I really want to make this as casual a discussion as possible so that the group can provide insights into what is currently happening in their respective chains in real time. And as much as I would love to not mention the word COVID-19 doing this webinar, it is something that we have to discuss as part of what we’re all dealing with today.
Unfortunately, we’re now in the middle of one of the most difficult times of the pandemic, with more restrictions being put on restaurants and needing to figure out new and innovative ways to service customers. We really need to be able to service them safely, but while also providing a great experience. And this leads us to our main topic today, which is innovation in off-premise solutions.
As everyone knows, off-premise sales, curbside delivery, takeout, and drive-thru are surging and becoming a larger percentage of our overall revenue. Delivery is continuing to grow, but orders for pickup, both curbside and pickup, are growing 4x faster. That’s a huge deal as restaurants try to navigate how to divide their resources and manage customer expectations.
Also with 60 percent of consumers ordering delivery or curbside at least once a week, restaurants are now shifting their focus to ensure the customer experience is flawless, whether they dine in or take out. The other really important stat as we head toward 2021 is that of those surveyed showed that 68 percent of consumers are more likely to use curbside pickup following the coronavirus outbreak. While we may not see continued triple digit increases like we do now for curbside and other other off-premise solutions, it’s not going anywhere.
So when I’m not hosting these webinars, my day job is solely focused on helping our retail, grocery, and especially our restaurant owners figure out how to optimize their off-premise solutions. The key factors that go into a successful off-premise strategy are frictionless customer experience, whether that mobile/order ahead or online, and sheer speed. Speed for throughput at the drive thru, low wait time at the curb ,and fast delivery result in repeat customers and driving additional revenue. So more importantly, customer experience is nailing the technology and experience for your staff inside the store. You have to provide them with a seamless way to handle the new influx of different types of order fulfillment while not straying too far from their current day-to-day operations.
And this is what we were really going to cover today and why we have some of the smartest people in the business to discuss it with. So instead of me continuing to ramble, let me get to them.
I’m going to start with Clive. I just read this yesterday that Domino’s turned 60 years old. So happy birthday to Domino’s! I understand you began delivering pizza in 1960, and so over the last 60 years, Domino’s, in my opinion, has really evolved into a technology company that happens to serve pizza. My neighbor up the street here orders pizza for his kids on his iPad, literally just so he could use the pizza tracker. So if we start talking about delivery, how has delivery evolved over that period of time for Domino’s?
Clive West, Domino’s I think we in the UK, we’ve been here since Domino’s has been since it opened its first store in Luton in about 1993, so 27 years. Delivery is the heart of our business, and for us in the UK, three quarters of our orders are made by delivery. It’s really the heartland of what we do, and what we are set up to do. And throughout 2020, the challenging year we’ve had, what we’ve really seen in the UK as restaurants were closed and we went into some quite severe lockdowns, two national lockdowns, and we’ve never really come out of any tiered restrictions. We see more customers moving online and moving online for delivery. I think in the UK, McDonalds and Nandos closed in April and May, which I think is the only markets in the world where they did that. And that put huge demand on customers just wanting to get restaurant food or takeaway food delivered to home, and we were in the fortunate position that we could stay open. And because we are in the end-to-end process, including the drivers, that made that possible in the UK. I think being a delivery business and having delivery at the heart has certainly during these troubled times played to our advantage.
Jeff Baskin, Flybuy So you definitely had an advantage over some of those other restaurants with some of the technology that you guys have had put in place prior to COVID, which is just great.
And Scott, while Domino’s has been doing delivery for 60 years and 27 years in the UK, Applebee’s was one of the first to do carside, or curbside pickup, back in 2004, really way ahead of everyone else. So even prior to COVID, how has that evolved over the last 16 years? And what have been some of the challenges around that?
Scott Gladstone, Applebee’s Yeah, we’ve had carside for 20 years. It’s been a core part of the core value proposition of our off-premise business. Certainly I think that’s benefited us throughout the crisis in that we had a built-in infrastructure around a carside service model, which now seems to be gathering almost ubiquitous adoption by mass merchants in the US. And so we’re in a good position in that respect.
The challenges of that business are the same that they’ve always been, although exacerbated because our volumes are 3x the size of what they were pre-COVID. For the guest in a carside experience it’s really all about two things. It’s speed of service: how do you get out to the car as quickly as possible? And order accuracy: how do you just ensure that everything in the bag is accurate and prepared the way that the consumer ordered it?
So we had challenges there pre-crisis. Those challenges exist today and we’re continuing to try to invest in either technologies or tools or process improvements to make sure that we’re stepping up to the game. Because in this environment, we’re competing more and more against the restaurants that are in other categories. I think that’s always been the case, but especially right now, QSR is certainly a competitor to us. And we have to figure out how do we make our service model as compelling to a drive-thru guest. Because we think we compete certainly on food quality and variety. But from speed of service, there’s still a perception opportunity. So we’re well positioned overall, but still opportunity for improvement as we go forward.
Jeff Baskin, Flybuy I think that’s an interesting point that, to be honest I’m not sure I’ve thought of, is that you actually have more competition now because you are competing against the non sit down or the QSR environment who are doing curbside and delivery. So that’s really interesting.
Sid let me go to you real quick. I know obviously one of the challenges that we all have with an off-premise or someone not ordering right in front of you is freshness of the product. No one probably realizes that more than you guys at Tropical Smoothie Cafe. Having a cold smoothie is obviously really important for your customer. So how do you ensure that the experience for order ahead for curbside and pickup is just as good as someone coming into the store?
Sid Desai, Tropical Smoothie Cafe First off, thanks for having us. Really appreciate the opportunity to talk to you guys, talk to everybody. In terms of our experience and our food quality, for us it really starts and ends with quality ingredients. We take a really hard look at our fruits and vegetables and just make sure that they not only taste great in store but also carry better off premise. Our culinary team spent countless hours just making sure the food travels well, and so that’s really important to us.
When we think about keeping the experience seamless and what our customer wants, I think for us it really starts with reading the customer. Believing that the hospitality and service part’s always going to be there in the forefront. Customers are really starting to value the different channels and how they interact with us and our brand. That’s going to continue to evolve every single day, as I’m sure everyone on this call can attest to. But really just knowing what our customers want and what makes our brand convenient and the value that our guests are looking for.
So for example, it’s all about the interaction with the customer. You’ve got the customer, you’re walking out with the curbside order, he or she is on her phone on a call or doing something… that’s probably not the right time to talk about what they thought about the experience or your new app or your customer survey. They want that interaction to be as transactional as possible.
Conversely, there’s just as many times when customers want to discuss the weather or how their day is going, their thoughts on the brand, etc. So it’s really important to recognize that. Because at the end of the day it’s really the experience that the customer wants and we as a brand being able to read that and provide it to them in the manner that they want it.
Jeff Baskin, Flybuy That’s exactly right. Teresa, I know that in the time we’ve been talking to Church’s Chicken you guys have been extremely busy launching the new spicy chicken sandwich. And so it’s great that you’re able to do that during this time. And during this time you’ve also been dealing with the closing of dining rooms in certain states. How have you had to shift resources in order to handle that? I’m sure it’s not easy.
Teresa Kim, Church’s Chicken So I want to first start off by saying the chicken sandwich is awesome. So if nobody has tried it yet, I definitely encourage you to stop one of our restaurants or third party delivery.
And so you know with the dining rooms closing, it was a lot of work. So specifically at the beginning of the pandemic, we probably had close to 100 percent of our dining rooms that closed. And with that went a whole new slew of procedures. It was not only shutting down the dining room, but providing that customer input. How do they order in our restaurant? We have a third party. We are still working on curbside. So that’s something new for us. So I like hearing all the feedback here. But we have the drive-thru. So we went from 50 percent of our business going through the drive-thru to I would call it 85 to 90 percent at this point.
So a lot of throughput through one order point. But it was all about continuing that strong staffing and making sure that we are moving our customers very quickly through the drive thru, being accurate, having that product ready, and just being prepared for that visit so that they have a successful and very quick turnaround, as well.
Jeff Baskin, Flybuy Yeah, I think the drive-thru has been a big part of it. Clive, as the sole representative from the UK on the panel, I think everyone would be really interested to hear how things differ in the UK as opposed to what the Domino’s here in the US is dealing with. I know you’ve launched a car collection there, as I say in the UK, or curbside here in the US. Is this something that was on the road map prior to COVID? And how do you see carside becoming a big part of your business as we get back to somewhat normal?
Clive West, Domino’s I know that they offer this in the US. We we had the strategy we needed. I mean, we didn’t have in-car collection or curbside as part of our 2020 strategy at the outset. However, we did have a strategy that we wanted to digitalize our collection business and make it a seamless way to collect a collection order or a takeaway as it was for our delivery experience online. Very early when all of the restaurants and the bars and pubs had to close for in of the restaurants, we had a major challenge to try and make all of our kitchens and everything safe for people to be two meters apart and PPE and floor markings to keep people apart and adhere to safe distancing guidelines.
But it became clear that the collection business wasn’t going to come back very quickly, and that’s when we started to talk to you guys. I think it became quite clear that customer behavior and customer anxiety in the UK was going to continue to keep them away from feeling like visiting restaurants or being in the major cities and on the high streets again. So offering this service became a real priority.
I know it took a bit longer with you guys than we probably planned in the first place to get things up and running. But once we’ve launched we’re now, we sort of went from two stores to 50 stores. And we’ve got an ambition to scale this up into over 450 of our stores in the first quarter next year.
Initial customer feedback has been hugely encouraging, and I think all the reasons why you would offer curbside pickup or in-car collection around customer anxiety and everything have all been taken away. Customers think it’s seamless, but it has meant we’ve had to sort of adopt some of our practices because we have to adapt. We don’t own a lot of the car parks that our restaurants are in. So there’s a bit of an education job to be done on customers about what this new proposition is and how it works and what they have to do.
And equally, I think Scott made the point around training the operatives around customer service in the car parks andthe importance of customer service in the restaurant. So although we’ve launched very quickly and we’ve had a few teething problems, we absolutely see this is a fundamental part of our 2021 strategy for collection.
Jeff Baskin Yeah, let me follow up with that. I know we’re in the 50 stores now, and it’s going very well, and you’re getting good feedback. How is the location part really helped you? And also, you mentioned stores that don’t necessarily have a dedicated carside area, or curbside area for those of us here in the US, and having virtual pickup zones. How have those the location part, being aware of the customer’s ETA — How have those really helped you guys?
Clive West, Domino’s Looking at the early results, we put quite a wide mixture of stores into those 50 stores. We had some in London, we had some that had naturally very big car parking areas outside the front where we shared maybe car parking with other retailers and outlets. And then we put it into some of our smaller rural stores. The earlier indications are that the more rural community stores are doing much, much better than the city center stores. Now, that could be down to a couple of things in that we’re all working from home. The cities, London’s dead compared to what it would normally be. You don’t normally travel around London in a car, although at the moment is probably the best time to do it because there’s nobody else on the roads. And so the London stores have been a lot quieter, the city center ones have been quieter. The rural stores have been very busy, but they do naturally have a higher collection order.
What we’ve noticed is that we have already had an ambition that 10 percent of our digital collection orders would come through in-car collection once we start to market the proposition. And we’ve already achieved that without actually marketing it at all or without any big spend of marketing behind this new offering.
I think that getting the journey online so that customers understand that you’ve got the option to go in-store or to collect in the car park is an important first step and needs to be thought through in the early stages of that, the journey construction.
Jeff Baskin, Flybuy Yeah, that’s great. Thank you for that, Clive. And Teresa, I want to go back to what you’re saying about drive thru. I’m going to correct your 87 percent number, because I recently read in The Wall Street Journal that 90 percent of your sales have been shifted over to the drive thru. So that’s a huge jump from, I think you said 50 percent before. So with that increase, how do you really ensure that you’re being efficient at the drive thru and also making sure that you’re cutting down on wait times in the drive thru line by doing other services?
Teresa Kim, Church’s Chicken Really good point. So you know, what we had to really adjust was the positioning of our staff. So we still have the same, if not more, volume coming into our restaurants. The QSR industry overall has been really lucky in the pandemic, so to speak. Because we have the drive thrus, we still continue to increase volume. So for us, it was not necessarily about a decline in our staffing, but increasing it even more but keeping those folks in position. So making sure that they’re packing orders. That product is ready, they’re not producing things to order. And being able to move our customers through the drive thrus really quick.
The worst thing that you can have happen is to have that drive thru line full and it’s moving slowly and customers are driving off the lot or not even stopping because they see that. So it’s really about being efficient with the time.
Jeff Baskin, Flybuy That’s right, and especially at the drive-thru, as we know, every second counts as far as throughput goes, which results in revenue. So that’s exactly right. That’s what we’re seeing, as well.
And Sid, Tropical Smoothie has been an amazing story this year with actually one of the few fast casual restaurants that have actually been launching new stores during this time. I believe you just launched your 900th store. Is that correct?
Sid Desai, Tropical Smoothie That is correct. I believe we’re at 909.
Jeff Baskin, Flybuy That’s awesome. What’s been the difference? So where there’s a lot of other fast casuals that are declining in stores, how have you been able to add?
Sid Desai, Tropical Smoothie Cafe Listen, I think all credit for our success goes to our franchisees, right? Their ability to just be incredibly agile during this just unprecedented time. Their just continued resiliency and their ability to adapt really quickly back in March to sort of the quick changes that were coming on as part of this pandemic, their ability to quickly respond. We shifted to a digital sales strategy pretty fast at that point. And that not only helped our brand stay afloat during the really rough period, but also, inevitably added to our success this year.
As a support center we made it a priority to keep our culture and franchisees at the center of every decision that we made, not only during the height of the pandemic, but before and we continue to do that every day.
Again, I’ll keep coming back to our franchisees. They just do an amazing job of being part of the community that they serve and establishing personal connections with that community. Serving the community really allows us to not only support, but it gives us an opportunity to give back. One of the things that we are really, really proud of… we’ve donated over, we’re coming up on 250,000 smoothies to first responders and hospital workers. We’ve got a couple of free smoothie giveaways just really trying to give back to the community.
That all being said, all the work that our franchisees do on a day-to-day basis, that kind of directly relates to our ability to open new stores because the majority of our new franchise agreements this year and cafe openings are with existing operators. So our growth and ability to continue to open new cafes just further reinforces the passion and pride that our franchisees have in our brand. And we just feel incredibly fortunate and really just feel like it’s getting started.
Jeff Baskin, Flybuy That’s great that you guys are doing stuff like the smoothie giveaway. And you mentioned the increase in digital sales. Which is a great segue to my question for Scott, which is… It’s forecast that digital sales will make up over 50 percent of restaurant sales by 2025 and I think that’s even increased just in the last couple of months. But do you think that customer habits have changed for good now that they’ve been conditioned to do carside, delivery, and all these other off-premise solutions? Or should everyone get used to this increase that we’ve seen?
Scott Gladstone, Applebee’s We think so. Behavior has shifted. I mean, awareness is a big piece of that, as well. We were always surprised with certain metrics that suggested that our dine-in guest was not aware of our carside business or our to-go business. And so we think we’re creating new habits and giving consumers a better understanding of the convenience of ordering online and ordering via the app and getting a carside experience. And ordering through delivery. So I think the baseline has reset. That should maintain itself.
What’s exciting for us and what we’re seeing is also that extension of technology in general into the dining room. That’s something we’ve talked about and thought would happen, you know, maybe five years from now. It’s happening today. We still have a majority of dining rooms open, although it’s been pulled back a little bit in the last six weeks. But introduction of QR codes for viewing your menu, and rolling out bring-your-own-device type capabilities as it relates to paying on your own phone. There’s a lot of that type of technology that is going to continue to accelerate because the guest is going to start expecting that. They want that kind of contactless experience, maybe not necessarily wanting a physical menu, not wanting to handle a check, all those things that we’ve got the digitization of those types of activities that happen over time, but they’re kind of happening now. So that type of activity will certainly accelerate, and I think the behavior of wanting to order ahead and order online and order for delivery are just going to continue.
Jeff Baskin, Flybuy Yeah, I completely agree. We’ve seen a lot of our partners that have their customers have been conditioned to do this. They’ve almost been forced to do it. And now that they’ve done it and have seen a good experience, they’re going to come back. And so they’ll still dine in but on a lot of occasions, they’ll go to the drive thru, if you have a good curbside experience they’ll do that. So I think there’s actually an opportunity to get more volume through the stores.
On that note, I want to stay with you, Scott, real quick and talk about delivery. It’s estimated that US consumers spend $30 Billion annually on food delivery. What’s been your experience with third party delivery service providers? Are they a necessary evil that you have to have?
Scott Gladstone, Applebee’s Well, the phrasing “a necessary evil” …I think it’s pretty representative of how the perception of third party delivery within the industry and within casual dining. We’ve evolved in our perspective of it over time. There is certainly resistance to it. I think a lot of interest in it, then resistance in it, then obviously it’s certainly held up our business over the last six months.
Our franchisees, we all have somewhat different perspectives. But the first issue is you’ve got to control the economics. And so we’ve been working through that over the last several years. Effectively restaurants need to find a way to capture full margin and not necessarily be cannibalizing their business.
And so we feel like we’re at a good place from that perspective. We’ve been able to balance our agreements with third parties as relates to the level of fees that are passed back to the guests. We’ve been testing with menu inflation, which a number of concepts have done as well, just to make sure that the economics of this work. So that’s the first thing. And then the second is the operations of that business. What you have to be really careful of is the perception of that necessary evil, at least how we talk about it from an ownership or a corporate level. Not trickle down to the restaurant level. And that and that’s tricky because you really have to view that third party delivery driver as an extension of your business and the representation of the brand. And we’ve got some operators who I think to do a fantastic job of welcoming the third party delivery driver into the restaurant as almost another team member and discounts on food and free soda and the things that, you know, because this is a person who is actually visiting your restaurant pretty consistently. And there’s a number of trade areas, especially in more suburban markets, where there’s a very limited supply of drivers. And so they may be the one or two or three drivers that are actually servicing your restaurant. So developing that relationship is critical.
And so I think that’s one of the keys to success in that business is just having as close of a partnership as you can with the third party, at an operational level, to ensure that they are representing your brand positively. But at the end of the day, that part of the business I don’t think is going away. Obviously, they’re working through how to make themselves profitable, which I think is the longer term question. But there’s certainly significant demand for delivery services. And at least for now, the financials work for the rest of the restaurant level.
But it’s going to continue to evolve. And we’re just going to have to find ways to meet that demand. The demand is there. Guests want it. It’s a very convenient service mode that’s been pioneered by brands like Domino’s for decades. And there’s demand for different types of food. So whether that is continued to be done by third party delivery companies or the amount of third party delivery companies over time is TBD. But for now it is certainly a significant part of the business.
Jeff Baskin, Flybuy That’s an interesting point that you make…you’ve got to concern yourself with your store operations and handling that. You’ve got to worry about the customer experience, but you also have to worry about the third party delivery driver who’s obviously representing your brand. So that’s an important point.
Scott Gladstone, Applebee’s I mean, there’s so much on the logistical side that’s not a core capability of most restaurants. You know, a pizza company that’s been delivering for a long time is very focused on all of the logistical elements that go into it from a staffing perspective, from a routing perspective, from a wait time perspective, like all those things. That’s all brand new for every other merchant that is partnering with a third party.
And so, training your teams to really focus on things like driver wait times… how do you reduce the amount of time that a driver is on premise? It’s been a pain point for us. You know, you don’t want the driver milling around in the dining room or waiting or taking a parking spot for carside. Those are pain points that we’re continuously trying to solve for.
So really putting the tools and process and integrations in place with the third-party partners is important. We want them to be in and out as quickly as possible, the same way you want a guest to do so. And so just minimizing their wait times is critically important.
Jeff Baskin Yeah understanding their location and where they are, just like a customer, is almost just as important. So that’s great.
Clive, as we talk about delivery we just talked about kind of the rise of third-party delivery services here in the US. Domino’s has always maintained, I believe, their own fleet of drivers and done their own delivery, obviously. Are the DSPs having a similar rise in the UK? And if so, has that affected the Domino’s business at all?
Clive West, Domino’s I think every single Domino’s market globally still does the delivery part of their business. We have got some markets globally that use the aggregators to support taking the order but we still do the delivery.
In the UK we haven’t gone down that route. And I think it goes back to the point Scott made that we’ve been doing delivery since 1993 to 95. So we have a very well established and a brand reputation for doing the delivery. That does give us an advantage over the aggregators in that it’s our own trained drivers, and we’ve worked out that if we can get the deliveries to people quicker than the aggregators can, then the customers stay with us. We still own in the end-to-end, so our drivers know what the product is so when they’re handing it over to the customer they know how to handle the product to talk about the product. Whereas I think when you’re using the aggregators, they’re not sure about the products and actually I’m not sure how much they actually care about the product they’re delivering because it could be anything.
However, in saying that, the aggregators are really, really strong players. They are investing hugely in marketing and marketing spend. They’re investing millions of pounds or dollars in technology to continuously evolve their proposition. And they are a real threat. In the UK we’ve seen them grow enormously over the last 12 months, particularly whenst COVID hit because restaurants that didn’t do delivery went to the aggregators first to try and get their proposition to people’s homes. So they’ve signed up a lot more local restaurants or national brands. So McDonald’s are now one of the aggregators doing delivery to home, which is what they didn’t do before.
Domino’s looks at them very much as they are a competitor and they are a threat to us. We need to keep just being better than them. And that’s all around the consistency of our delivery, the service standards of our drivers, and actually trying to get the product to customers even quicker than we do today. We’re working globally to try and make sure that we can get the delivery there in full and without any missing items as quick as possible because the hotter the pizza when it arrives, the better it tastes. But they are a real threat. But one of our CEOs has a very strong view that having a strong competitor makes you better yourself and it keeps raising the bar. So yes, they’re a competitor, but we’ve got to take them on.
Jeff Baskin, Flybuy That’s exactly right. And Sid, we talked about delivery, but there’s all these new innovations that, again, we’ve been kind of not forced into, but people have adopted in the off-premise landscape. So delivery, curbside, obviously, but mobile/order ahead and pick up a window, lockers, grab-and-go, multiple drive thru lanes and speaker boxes. How do you figure out what’s best for your chain?
Sid Desai, Tropical Smoothie Cafe I can tell you one thing. Our roadmap, as much as we’d like to set it and forget it, it feels like it changes monthly, if not weekly, with everything kind of going on. For us, again, first and foremost, it comes back to listening to our franchisees. They’re the heart of the business and they provide us with invaluable information in terms of what the guests are asking for. Again, coming back to that any time, anywhere model. So every guest is different and listening to our franchisees in what they have to say based on their conversations is really a big thing for us.
We have a Tropical Franchise Council, which is made up of several franchisees across the system. They’re not only a sounding board for us, but a partner avenue as the voice of the franchisees. Our dedicated technology committee, we also go through kind of what we’re thinking from a roadmap perspective to make sure that it’s resonating with our franchisees. And then finally, we’ve got our contact center. We really try to use that as a way to understand, again, directly from the customer what they’re not only what we’re doing well, but also what they are looking for and where their frustrations lie. That helps us inform our roadmap a lot.
At the center of all that, I think for us it comes down to just really looking at the data. We are a data-driven company. So trying to understand what the data is telling us in terms of where we see gaps in our current offerings and trying to attack those as fast as possible is really how we approach our prioritization from a technology perspective.
Jeff Baskin, Flybuy That’s interesting. And Scott, again, you guys have been doing curbside pickup for a long time. So I believe you guys and we’ve seen tremendous growth prior to COVID. And obviously when COVID hit, we saw growth over 370 percent, according to studies. And so I guess the question is – and we kind of talked about earlier – but how have you dealt with that increase? And a specific question on that is, have you seen increased adoption of your mobile app, which has also been a trendsetter in the industry that helps customers kind of order more easily?
Scott Gladstone, Applebee’s Take it day by day, I guess. It was really challenging. You know, overnight we went from a business that, this was back in March, a business that was 12, 13 percent off-premise, largely carside to 100 percent off premise and dining rooms closed. So that’s a significant change, obviously, and challenge from a people perspective, a process perspective.
And then over time that certainly has evolved. But I do think that crisis moment certainly helped fine-tune some of the practices, which is just okay overnight you’ve got to figure it out. Kind of what Sid is saying, the heart of our business, we’re a 98 percent franchised business. So it’s really all about our operators and figuring out ways to make it work. And so I wish I could say it was a lot more structured of an approach than than it really was. It was just really how do we take care of the desk at the end of the day and find ways to make that work?
Because the restaurant operators can make anything happen, which is what’s beautiful. So there’s a little bit of variability by restaurant. A lot of it was really just about capacity and how do you expand capacity as much as possible. There’s certainly some bottlenecks that appeared. You know, a number of carside parking spots – kind of seems kind of simple, but it was like, all right, we generally have three to five parking spots. Now you’ve got 30 orders coming in in a 15-minute window. How do you manage that? So it’s simple things like, okay let’s get portable signage and make sure we’re marking it and making as clear as possible to the guests where they’re supposed to go when they arrive.
Other things. There’s back-of-house procedures, there’s ways that we were sorting and prepping orders. And so those are all different process/back-of-the-house changes not visible to the guest. But just trying again to make it as smooth as possible so we can meet their expectation as it relates to quote times.
So a lot of learning as we go. Again, we had the infrastructure in place, which was very helpful. But certainly, just finding ways to make it work. And now that things have – I wouldn’t say stabilized – but you have some time to reflect, now it’s our role especially on the corporate side to kind of catch up and find ways to look at… Okay, where’s the inefficiency? How do we standardize some processes that probably need to be enhanced? How do we find some technology solutions that make it easier for operators and go from there.
So it’s been a bit of a whirlwind over the last nine months or so. But you look back on it, it is really all about the operator and how they found ways to make it work.
Jeff Baskin, Flybuy I think when this happened, I think you guys were certainly ahead of the game. And I think a lot of other restaurants, they either had something or they launched a curbside 1.0 version, as I like to call it. And now that they’re seeing the future of this continued growth into 2021 and kind of beyond COVID, I think they’re looking at a curbside 2.0 version of what that looks like from a technology standpoint. So, yeah, it certainly has been a challenge for all of us.
Scott Gladstone, Applebee’s The thing I was talking with our IT team is just make sure we’re online, okay? Let’s forget about enhancements and the backlog and all this… you can have no sales if you’re not open, right? There are a lot of instabilities that were highlighted, especially in the beginning… March, April. Not necessarily within our own digital platforms, but within some partner infrastructure that we rely on for online ordering or that we rely on for fulfillment of delivery orders and that type of thing. So it is really just up time, online time, that is critical, make sure we’re online and stabilized. I thought our team did a fantastic job. We didn’t lose too many minutes or hours as we went through it, but it was really about trying to simplify what you focus on. Hey, just make sure you’re open and can do the right thing for the guests.
Jeff Baskin, Flybuy That’s exactly right. Yep. Clive, we were just talking about the mobile application, and Domino’s, from a technology standpoint, has done a really good job with the mobile app. I mentioned some of the features earlier. How have you incentivized customers to ensure that they use that technology versus calling in, like a lot of people still do here in the States, to take advantage of that app you have?
Clive West, Domino’s It’s been an interesting journey this year on that because we’ve had a very good app that’s been a 4.8-star-rated app. We’ve had 1,750,000 monthly active users using it anyway. So we have a huge base of people that use the app. It’s sort of worth about a third of our old accounts coming through that.
So we haven’t actually incentivized anybody or done anything particular to drive people to use the app. What we did do is work with Google to do a download program through the COVID period to get our app into more people’s hands. But we didn’t offer free products or anything to download it. So that’s been very successful.
What we have seen, though, is just usage of mobile apps increased. And so our monthly active users have gone up by 300,000 or 400,000 a month through the last six months of people placing orders on the app. Traffic in the double digits, which is good.
We’ve not released any new features. Scott’s point about just making sure that the app is available and up all the time has been a major priority. We had to make 60 changes to the app in the first four weeks of COVID just to take things like cashless way for collection, we reduced the menu. We have to bodge and hack the journey a little bit to make it a bit clunky. But customers wanted the product, and they were prepared to put up with a few hiccups along the way, even if the journey wasn’t seamless.
We’ve had plans to upgrade our app in Quarter 1 next year, where we’re adding quite a lot of new features and functionality to the app. Kelly who runs our app has been doing an outstanding job, but I know that if I gave away any of the trade secrets of what we’re going to release, she’d probably hang me tomorrow morning for giving away our secrets. But we have got some cool features that we’ve been developing, and I’m really proud of the team that have been able to stabilize the app, deal with the extra volume, keep it serving customers, and at the same time running parallel to continue to develop the new one app Q1, which as you know, will have Flybuy and in-car collection fully integrated.
Jeff Baskin, Flybuy I appreciate the exclusive announcement here on our webinar series. It’s great. And Teresa, I want to get back to you. I think out of kind of chaos comes opportunity. And I think restaurants and especially the ones on this webinar have done a great job, including Church’s. Do you actually think you’ve been able to attract net new customers to Church’s with some of the solutions you put in place?
Teresa Kim, Church’s Chicken That’s a really good question, and I definitely think that we have. I don’t know that it’s necessarily new solutions for the pandemic, but it’s really reaching out to the customers in a new way. So it’s the third party provider, it’s all these different touch points.
The data that we’ve received from all of our third-party providers indicates that 50 percent of those customers are actually brand new to Church’s. So that’s a huge avenue of new customers that are reaching out to us that we can retain and build into our portfolio of repeat customers. So that is really exciting news to see how these different avenues that we have out there actually do reach a brand new person that normally would not visit our restaurant.
Jeff Baskin, Flybuy Then I think other restaurants need to be aware that a net-new customer to you might be a subtraction from them for those that aren’t doing these types of technological solutions.
I know we’re getting toward the end of time. But last question for Sid… I think hopefully we’ll have some time, Rebecca, for some questions for the group. But Sid, you mentioned earlier the connection point to your customers. How do you ensure – that kind of that’s a mantra of Tropical Smoothie Cafe – how do you maintain that personal connection to the customer for off-premise orders? And how do you maintain that level of customer service that customers demand from you prior to all this happening?
Sid Desai, Tropical Smoothie Cafe I think, again, it comes back to understanding, kind of reading your customer, right? I was at a cafe last night with one of our franchisees and just talking about how he’s dealing with multiple channels now that they have to deal with. Every experience is a little bit different. He reiterated kind of what we’ve all been saying here… that it really is about giving the customer the experience he or she wants in the manner that they want. There isn’t a one-size-fits-all answer, right? I think it’s being able to deliver quality food, quality product in the manner that that customer wants.
I’ll go back to the example I used earlier. There are certain customers that just want to be purely transactional. They don’t want to talk about anything. They just want to get their food and go. And then there’s other customers that are more engaging, for lack of a better word. So again, it comes back to really… it starts with the franchisees sort of having that ability and bringing his staff along for that journey and making them understand that, hey… You have to read the situation, you have to read the customers to make sure that you’re giving them the experience that he or she wants. I think that in and of itself establishes a personal relationship, right? It doesn’t have to be the same… Hi, how are you doing, tell me about your day, kind of tell me what’d you think about the app, etc, etc. Establishing a personal connection, I think is unique for every customer. And I think being able to realize that and recognize that and react accordingly is the key.
Jeff Baskin, Flybuy I couldn’t agree more. We’re seeing that in all of our verticals. So in the grocery and retail spaces that you’ve got to meet the customer where they want to be and not withhold a potential solution for the way that they want to work. Even in grocery, I’ll give you an example of like my mom will always want to go back and go into the grocery store to pick out her vegetables. Where you’re going to get folks like Rebecca who are probably never going back into a grocery store ever again. You have to meet customers where they are. That’s a really important point.
I think we are going to get to questions from the audience. But I do want to ask kind of just a roundtable question. You don’t have to answer, but feel free to if you have a good one.
We talked a little bit earlier about getting customers to adopt new technology, and it’s not easy to do. But COVID has kind of forced the issue, and that’s why everyone believes that curbside and another off-premise solutions are not going anywhere post COVID. So how have you managed to push new technology to customers to ensure they are aware, not only aware of it, but also engage with it? And is there anything that you would have done differently if you were to look back prior to March? Anyone want to grab that?
Sid Desai, Tropical Smoothie Cafe I can take a stab. I’ll start the flow here. For us, in March we just tried to get it all out there. Fortunately we had a digital presence, and it was just really setting up the proper structure with our third-party delivery partners. Again, curbside, Jeff, you said it perfectly earlier, our 1.0 solution, right? We were able to roll out in about 10 days. And now, we’ve got our customers used to that. And as we go to a 2.0 solution with Flybuy it’s really, again, that should be relatively seamless to the customer, if not a better experience for he or she. So, again, we feel like we’ve got a good start and a lot of good 1.0s. Then it’s taking that to the 2.0 stage and making it as seamless to the customer, but then making it more convenient and more integrated with all the other channels that we’ve got. That’s our kind of strategy as we start kind of improving everything here.
Clive West, Domino’s I think basically the pace of change from customers to digital and online has just accelerated as a result of COVID. So I think it’s just brought that pace of change forward.
I think what we all need to do is make sure that we don’t just add technology because that technology exists and that the technology that we have or the features that we add are the right features or technology for our business and for our customers. And I think the reason we’re excited about what we’re doing with you is that there is a clear need to have a car-park collection to sit alongside our in-store collection business because of customer concerns around safety and everything currently. And therefore, it has a real need. I think there’s lots of examples of where people have added technology, but it’s not right for their business or not for their customers. And that’s why it’s failed. So I think we just need to make sure it’s the right things that we’re doing.
Jeff Baskin, Flybuy That’s a good point. Not not every piece of technology is going to be worthwhile for each and every business. Anyone else?
Teresa Kim, Church’s Chicken I would just say one of the really big aha’s for us is what I’m going to call the tablet farm… having all these different third-party tablets that you have to manage and input into the POS. We had been working on solutions, but we have since expedited really upgrading our POS so that all of these third-party aggregators were directly integrated. Then also utilizing solutions such as Chally, where all of our third-party providers are integrated into this, and it directly injects into our POS at this time. But really looking for those longer term solutions that are more efficient and get us away from our team managing four to six tablets.
Jeff Baskin, Flybuy That’s a good point. More tablets isn’t good.
Scott Gladstone, Applebee’s To piggyback a little on what Clive was saying, there has to be value, obviously, in the technology we’re releasing, and at the same time, an awareness of what you’re doing. And so I think two lines of awareness… one is that consumer-facing awareness, which is important and just being consistent in that messaging that… Hey, we’ve got online ordering and hey, we do carside and in every single touchpoint that we do. That’s one.
But one of the key pieces is really with the operators and making sure that your team members understand the technology that’s available and that they are promoting that technology to the consumer. And so we’ve got a lot of our, most of our restaurants are doing a great job. At that touchpoint, at the car… hey next time, why don’t you try… Did you order online? Next time why don’t you order online. We know who ordered online or who called it in, so hey… Just make that person aware that next time you can use the app or you can go online and do that.
That’s critically important. I think we kind of skipped that step a lot of the way in terms of, especially on the technology side and educating our team members as to what exactly is available to the guests and where they can find value, where the guests can find value in and where the team member can find value in it. So that’s critically important as you release in the future out there.
Jeff Baskin, Flybuy And your team members do a fantastic job with customer experience and greeting the customer. So who better to promote new technology and new uses than your team members who are already talking to the customer? So that’s great.
I think, Rebecca, I think we’re just at the end of the bottom of the hour. Do we have some questions for some folks from the audience?
Rebecca McFarland, Flybuy There’s a couple, and the ones that we don’t get to we will post in our blog section of our website. But the one question that has come up first is… It could be for all of you, but Jeff you might actually be best at taking this. It says: since you’re using location, how have customers responded to accepting permissions, and are there privacy concerns?
Jeff Baskin, Flybuy Yeah, I’ll take this, and then I’ll open it up to the group. I think every company that we work with, any company in the world right now, has privacy concerns. But this really isn’t any different than other technology. We tackle that very well at Radius Networks and Flybuy and protecting data.
We are a location technology company. We are not a marketing company. We don’t do anything with the data – it belongs to our customers. So we focus on the service and the solution and then provide really, really good location services to our customers. Not the data… that belongs to the folks you see here on the screen, some of them.
From a permissions perspective, I equate it to something like if I am going to use Uber or Waze, I understand that in order for that app to work, I’m going to provide permissions, and I’m going to provide permissions because it’s providing a really good service and it’s probably going to save me 10, 15 minutes. So we really see when we explain that well and when our customers explain that well, we see a really high percentage of the folks that do accept those location permissions, just like they would any other kind of location aware app.
And you won’t see it for like… I don’t turn it on for my gym or something like that. They don’t need to know where I am. But for those that do it, we do see a very high permission rate. And then, also are with our technology, we only are locating that customer when they want us to. Meaning that, when they let us know that they’re on their way to the restaurant, and as soon as that order is closed out, we stop locating them. So that’s a very big part of our business. And frankly, the decisions we made very early on to protect our partners and our customers.
Rebecca McFarland, Flybuy Alright, well, we are going to wrap up, as we are approaching our 12 o’clock hour here. But thank you so much, everyone, for joining us today. And thanks so much to our panelists for taking the time out of your busy schedule to provide us with all the information and insights on this topic today.
Everyone will receive a link to the recording so you can share it with others at your company. And like I mentioned, it will also be posted in our blog session at radiusnetworks.com, along with the questions we didn’t have time to answer.
If you want to contact Jeff or any of the panelists today, their email addresses are listed here on the slide. And if you’d like to learn more about Radius Networks and our curbside and in-store and off-premise solutions, feel free to reach out to Jeff directly at Jeff@RadiusNetworks.com. Thanks, everyone, for attending today.