The Way Restaurants Will Have To Do Business In The Future
There are a few times in our life that have forever changed the way we live: 9-11 changed the way we travel forever. If you are under the age of, let’s say 25, you have always had to take your shoes off at the airport. You don’t know why, that’s just the rules for as long as you have ever traveled.
Due to COVID-19, as a restaurant, as a vendor, as a consumer, eating out has changed forever. As the US begins to reopen, many restaurants are starting to realize what going back to “normal” business will be. The big problem is trying to figure out what “normal business” is in a post-pandemic world. In short, it is not the normal we’re used to.
Customers are the straw that stirs the drink so, restaurants will adapt to their customers (and regulations) and vendors will adapt to the same.
Based on new distancing and operating capacity requirements, restaurants will be required to reduce capacity to 25-50%! In Texas for example, restaurants can reopen now at 25% capacity while in New York restaurants will reopen at 50% capacity. While some states, like California, have not made an announcement on the required capacity reductions I believe it’s safe to assume many will fall within the 25% - 50% range.
Based on that, a California restaurant with 150 total seating capacity will likely only be allowed to have 75 or fewer total people (including staff and guests) in their restaurant at a given time to meet these capacity reduction requirements. Assuming a pretty lean staff of 15 employees (including servers, cooks, busser etc), that means at most 60 guests can be in the restaurant at one time. Restaurants that size can stay viable but what about much smaller places?
Let’s say a small mom & pop restaurant has a capacity of 36. 1/3 capacity is 12. Cook, waiter, dishwasher & a manager or owner. 4 employees, which leaves a customer base of 8 at a time. How can that place survive? Online ordering for takeout, curbside delivery, and home delivery services are and must be the answer.
There will be people that will stay scared of restaurants for a long time. They will stay away from crowds; I personally predict until the end of 2021. If they want restaurant food, they will have to use online ordering and to-go platforms. We have been working (thank goodness for that) to help our customers stay open during this pandemic by programming online menus and helping them interface to delivery services. We believe this is only the start of the trend as restaurants should not want to utilize the delivery services, they need to. It is not going away.
In an early 2019 time-frame quote, from the foodable network: “Even though online ordering has become wildly popular, only 26 percent of restaurants surveyed in the BRP and Windstream Enterprise study said they have mobile point-of-sale technology.”
From an article about the same time: “The National Restaurant Association predicts that 70 percent of meals will be takeout by 2020” (wow, 1 year before COVID) I wonder what will it actually be by the end of 2020?
We here at SacTown POS, sell Point of Sale (POS) systems that allow online ordering for scheduled and ASAP orders for our customers. Our systems interface with delivery systems to help our customers expedite those orders. We have a technology where the customer, orders & pays online, then the system texts the restaurant when they are curbside, and an employee brings their food to their car. Without any human touching! We also have payment devices that except contactless payments (Apple, Google, Samsung Pay)
Before COVID, major shifts had already begun with the advent of mobile-friendly online-ordering platforms, takeout-only concepts and new restaurant delivery services. The thought process before was “why eat at a sit-down restaurant, the digital natives wonder, when you can surf for a meal online and have it delivered whenever and wherever your stomach demands?” But now, if you are tentative about being in public, order online and eat in your house.
The other thought is, “We eat out to go out eat to get out of the house and socialize. We realize we are paying more but we need to get out of the house.” Those will be the 1/3 that still fill the available restaurant space and tip the staff.
Personally, I and my friends love to cook and are proud of our abilities, but we go to restaurants for the change of view and to socialize. We also have made friends in the business and love to support them.
According to a recent study from BRP and Windstream Enterprise, 20 percent of participants are using a pre-order option. When it comes to millennials, in particular, this percentage spikes to 32 percent. "They are less likely than older generations to dine out and more inclined to order their food for off-site consumption," writes the study.
Food delivery has become somewhat unpredictable. The food can arrive much later than expected and the meal may be in poor condition when it arrives. With the pre-order option, diners can get the food directly from the source and then can either eat it right away or take it on the go.
STREAMLINE INTAKE
Sactown POS has customers that don’t:
Want to have to answer the phone because it takes away from in person orders. They would prefer that customers order online preferably a few hours ahead.
Take any cash on togo orders. No cash handling makes less interaction.
Adding online take-out underscored the importance of maximizing existing labor to accommodate an efficient intake system. Instead of answering phones and then putting the order in the POS, they push customers to order online so the staff basically become food expos.
BUT, we do have a customer only takes phone orders to go because they only have X amount of pizzas a day and want to ensure that 1. They can fulfill only that amount of orders and 2. If too many orders come in at 530, they can tell their customers there will be a longer waiting period. Though, we do have a solution that allows them to put in the available quantity. If they run out, it would make the online menu item unavailable automatically. Our system can also adjust the waiting time based on the amount of orders.
I think the above paragraph can be attributed to an old school thinking, even though they are a very popular restaurant before the pandemic, we will see how they do even by not having an online and delivery presence. We believe, you will ultimately fail. There are people who don’t want to get dressed, take a shower, or put pants on but still eat well. Times are changing and as stated above, the consumer is the straw that stirs the drink.
are TAKEOUT & delivery services WORTH THE EFFORT?
Though currently, California does allow takeout cocktails but if they do stop the ability to do so will off-premise income offset the potential loss of alcohol sales and added labor? Most operators say yes, but the cost of online delivery platforms must be factored into the profitability.
“Delivery does offset the draw from beer, wine, etc., since it is incremental sales,” says Dave Quillen of Joe’s Seafood, Prime Steak and Stone Crab. “You don’t have a table, a tablecloth, silverware, glassware and all of that. And you don’t have to employ drivers (or) have to worry about insurance and cars.”
Third-party online aggregators, such as Grubhub and Doordash, take a cut of the sales (up to 30%!) but the site allows upselling by recommending additional items and dessert. There’s also an inherent soft upsell hidden in ordering online.
“Customers tend to order more online than they really need,” Quillen says. “The idea of, ‘Do you want dessert?’ becomes, ‘Let’s get something for dessert. We can eat it later.’ Then one piece of pie becomes two.”
We here at SacTown POS look forward to helping our customers stay in business with the currently environment: Technology refresh in establishments, programming online menus, interfacing with multiple delivery services and implementing contactless payments (Apple & Google Pay)
Our next article/blog/rambling will dive into delivery services and what they mean to the local restaurant.