Discovering the perfect recipe for a restaurant rebound
There’s always that one recipe that ticks all the right boxes, and if you can discover it, you can make your restaurant stand up against any turmoil, come what may.
Let’s dive deep to understand the ingredients of the perfect recipe that will help you weather the storm and rise like a phoenix once the dust settles down.
As restaurants slowly and steadily start to get back on their feet following months of uncertainty, what does the future hold for them? What is the ‘new normal’ of dining? And how will customers respond after long periods in quarantine?
The coronavirus pandemic has been the biggest global health crisis in recent memory. It has also put restaurants to what has perhaps been their toughest trial. From operations closing down overnight to millions losing their jobs, never before has the industry faced a challenge of such brutal proportions.
But this crisis has also revealed some restaurants’ ability to adapt, as many quickly switched to online ordering and curbside pickups ensuring profitability even during hard times; and this means that these restaurants have positioned themselves to tackle the post-COVID-19 landscape better than the rest.
Even though the worse is still not past us, restaurants have begun their resurrection. And this would be a good time to mull over some viable plan of action for these establishments to regain stability, much of which will be defined by their prioritization of off-premise dining.
Before we lay out a rebound strategy, let’s take a quick glance at the current situation on the ground, both good and bad, and formulate a blueprint accordingly.
The coronavirus effect
The pandemic has been devastating for many restaurants and the numbers speak for themselves. Take a look at some of these analyses from the National Restaurant Association (NRA),
• Restaurant sales fell to their lowest real level in over 35 years between March and April
• There was a loss of $80 billion in sales by the end of April
• The industry is set to lose about $240 billion by the end of the year
• Three decades of restaurant jobs were lost during March and April
• More than 8 million restaurant employees have been laid off or furloughed since the beginning of the coronavirus outbreak
• Restaurant job losses in March were the largest in history
• Four in 10 restaurants are shuttered during this period
These numbers are anything but comforting. The alarm bells have been ringing within the industry for weeks now, and the only way to get through this adversity is by coming together as a community and finding workable solutions.
On the brighter side of things, several restaurants have continued to enjoy high revenue throughout the COVID-19. For instance, many pizza places have seen increased sales during the pandemic. This is important to note because the success that these restaurants have enjoyed despite the crisis can become the base from which to build on the ‘next normal’.
It’s clear that the foundation on which restaurants reshape their revival is online and mobile ordering. According to the NRA, during April six in 10 adults ordered takeout or delivery from a restaurant for their dinner meal and four in 10 adults ordered takeout or delivery for lunch, as they continued to seek restaurant experience but through off-premise dining.
So, while the popular belief stands that the restaurant industry unanimously suffered massive losses, this isn’t really the entire truth. And the few instances of the positive impact we’ve witnessed have largely been due to customers’ sustained trust in deliveries and takeaways.
Why online ordering is the future
To say that online ordering has been the only saving grace for restaurants during this pandemic is not an exaggeration. This service has now become an essential one for all restaurants, irrespective of their size and nature.
In a statement, David Portalatin, NPD food industry advisor said, “It’s highly probable that this crisis will define winners and losers by their digital proficiency since consumers may prefer the contactless delivery protocol that digital ordering offers.” He further added, “Now that we’re living in a world where the entire industry is an off-premise business, digital orders gain importance and provide an edge to those who already lead in that space.”
A McKinsey report further substantiates this digital primacy by stating that, “a strong online-ordering presence, digital loyalty programs, and robust customer-relationship-management (CRM) systems have been lifelines for restaurants during this crisis, as levels of digital engagement among consumers have soared.” This increased digital engagement among consumers is expected to endure even after the crisis.
The same report also highlights how restaurants with high off-premise sales prior to the coronavirus crisis have been faring far better than those that relied more on dine-in sales
Therefore, it goes without saying that online ordering is going to be pivotal for all restaurants moving forward. Brands who already had a robust digital infrastructure in place before the pandemic, or those who built one during the past months, will emerge as leaders for many reasons. The most important among them being,
• They have not suffered a debilitating financial set-back, and have security in terms of capital
• They’re already accustomed and efficient in leveraging the digital
• More and more consumers have gotten familiar with digital channels
• Social-distancing norms will not disappear for some time
• It will take time for customers’ to gain their trust in dining rooms
A combination of these factors makes online ordering system and mobile ordering app the perfect recipe for post-COVID-19 success for restaurants. These are no longer secondary sales channels but, as we’ve seen time and again during the coronavirus, they’ve already become primary revenue generators. So while rebound strategies can differ slightly from restaurant to restaurant, no matter what the game plan, online ordering should be at its very core.
The road to recovery
We’ve already emphasized how online and mobile ordering have not only helped restaurants survive the current storm but will also lead the course of action in the future as well. The following points look at some specific ways in which restaurants can leverage online ordering as well as focus on other critical ideas on their road to recovery.
The first and foremost concern on all restaurants’ minds must be customer sentiment. Behavior and preferences have changed a lot within a short span of time. Some notable among these are increased online spending, skepticism regarding physical proximity, heightened consciousness for hygiene, etc.
Taking these aspects into consideration, restaurants can tailor their services to meet the altered demands. Some essential steps that they can take are,
• Escalate safety procedures across the spectrum. This includes sourcing fresher and healthier ingredients to fortifying cleanliness in front and back of the house and ensuring safe packaging and deliveries.
• Eating habits have also changed to a great extent, with healthy and comfort food gaining popularity. Experiment with your menu by having a mix of pre-COVID-19 bestsellers and newer items that suit current preferences.
• Adjust the pricing on the menu so that it’s a win-win for both you and the customers. The meat and produce supply chain has been impacted by the coronavirus too, so there is bound to be fluctuations in prices. Keep in mind the customer’s new spending habits as well.
• In-house ordering should take precedence over third-party delivery if restaurants want to enjoy larger profit margins. Several restaurant owners have spoken out against third-party aggregators who continue to charge unfair commissions even during the pandemic. Taking control over your own delivery orders will be defined in the days ahead.
• If restaurants have already partnered with third-party delivery, they can start taking small but effective steps to draw customers to their own websites and mobile apps. For instance, they can have items and special offers only available for those ordering from the restaurants’ sites and apps.
• Have a contactless payment method in place for both on and off-premise orders because cash and even credit cards involve extensive surface contact, which could put off customers.
• Advocate for environmental sustainability as much as possible. This can be done in terms of using organic ingredients, using compostable packaging for deliveries, encouraging electric delivery vehicles, and reducing food waste.
• Don’t hesitate to invest in new technologies that can be highly beneficial in streaming operations and improving revenues.
• This also means being open to adapt whenever there is a need. No one has a full-proof plan for future success, so there will be a lot of learning as you go until we return to complete stability. Being flexible and receptive has been critical for restaurants during this crisis as well.
• Communicate, communicate, communicate! Let your customers know what safety standards you’re following, what updates you have made to the menu, what new offers are up for grabs, how your employees are being looked after, and any small information that would be of use to your diners. Social media and personalized emails are the most effective means of communication at the moment.
To conclude, customers will gradually start returning to dining rooms, but online ordering will persist as the primary sales channel. Restaurants owners should begin building their rebound strategies accordingly. The steps that they take now will determine their success both during the present crisis and long afterward.
