As consumer demands and expectations continue to increase, consumer discretionary companies are using technology to drive better inventory management, in-store customer experiences, and interaction with consumers' mobile devices. Restaurants are no exception, and this is one category where the rapid move to digital has paid off in big ways for some companies since the onset of COVID-19. Moreover, data suggests that investments in technology should support restaurant sales well into next year.
The restaurant industry has been among the hardest hit by the pandemic, suffering as indoor dining areas were shuttered to prevent the spread of COVID-19. Before the pandemic, many restaurants were focused on in-house technologies for various uses, including tracking sales and inventory. However, as the pandemic accelerated, so did the need for consumer-facing technologies to respond to the surge in contactless takeout and delivery. It quickly became apparent that some fast-casual and coffee chains were ahead of the curve and had been investing and implementing consumer-facing technologies well before the onset of COVID-19. Restaurants relied almost exclusively on their “to-go” models for sales for much of the past year, and those with business models powered largely by technology emerged as winners.
Investments in digital kiosks, mobile apps, and delivery options were particularly fruitful this year, as consumers increasingly looked for contactless food pickup and delivery. Drive-through enhancements, such as designated lanes for picking up online orders and product displays on digital menu boards customized for the time of day, weather, and traffic patterns, were also successful. Some restaurants began offering loyalty programs and online-exclusive menu offerings to attract more consumers, while others struck deals with third-party delivery providers to gain new customers and drive sales.
These efforts recently resulted in double- to triple-digit growth in digital sales for some of the most successful fast-casual chains. This may bode well for future growth because digital customers tend to visit more frequently than non-digital customers. Additionally, by building a digital relationship, restaurants are also able to understand customer behavior and target promotional offers more effectively.
Further, there is pent-up demand for eating out at restaurants. Since late March, restaurant sales have declined by $130 billion—the biggest drop across consumer categories. This demand is likely to be unlocked by a successful COVID-19 vaccine, which may lead to rebounding sales from dining in alongside strong digital ordering.
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