Pay with your Palm at Panera, Customizable tech-forward stirfrying, and Doordash accepting cash.
All these headlines and more represent our thoughts and views on the world of restaurants, technology and off premise food in our round up of last week’s hot news stories - subscribe today to The Digital Restaurant and register at www.deliveringthedigitalrestaurant.com for more bonus content.
Articles mentioned in the video:
Related Article:
Related Article:
TRANSCRIPT:
Carl: Pay with your palm at Panera, customizable tech-forward stir frying, and what is Reef OS all about? That's all ahead on this week's Digital Restaurant.
The Digital Restaurant works like this. We're gonna ask each other five questions about headlines that have caught our attention about the worlds of restaurants, technology, and off-premise that tie back to our books from the Delivering the Digital Restaurant series, talking of which, if you have already got your hands on a copy, we'd love you to be able to give us a great review on Amazon. And of course if you haven't got a copy, then head to the www.thedigital.restaurant . Now if you also love our podcast, the Digital Restaurant, you can also like and subscribe to it, so please do that and leave us a great review so that others can hear about what's to follow. All right.
With all that said, let's get on with the show.
Good morning, Meredith. How are you doing today?
Meredith: Very good. How are you?
Carl: Very good. Thank you. Lots to cover. So let's get straight in with this Reef OS It's a new model that Reef are talking about. What are they doing? Can you tell us all about it?
Meredith: It probably shouldn't come as a surprise since an article had come out a couple weeks ago saying that Reed hired restructuring consultants, Alvarez & Marsal, to help them figure out what to do with their parking lot business and their restaurant business.
And looks like one of the answers is technology. So they are spinning out the technology into its own product that isn't necessarily tied to the vessels. The vessels were those truck like trailer kitchens that operated restaurants out of them. So the Reef OS technology is targeted at places like stadiums and airports where there's significant foot traffic and people might want to order from multi concept.
That's really what it specializes in, is multi concept ordering. And in being in heavy foot traffic areas, they've really just avoided the backend problem, I would say, of how do you coordinate all of those brands together? How do you get them out to delivery? All of those bits and pieces that are more challenging; they really focused on the consumer front end.
We had heard some rumblings that Reef had pulled out of a few markets in the last few weeks with the vessels, and it seems like they're continuing to explore more, shall we call them, asset light approaches to be able to expand and grow both more quickly and more profitably. It has been reported that the vessels are challenged to make money.
So again, I think being in places where there's high footfall they're guaranteed a bit more traffic than trying to drive it to the vessels, which are in parking lots and would have to come all digitally.
Carl: And what do you think is the impact to the ghost kitchen industry at large as a result of this?
Should other ghost kitchens be concerned?
Meredith: I don't think so. I think that there are some great ghost kitchen models out there. Most notably, and maybe I'm a little bit biased, the Kitchen United model and the ClusterTruck model, which are very different from one another, but both very good.
They try to solve this digital marketing problem in very different ways. I would say Kitchen United approaches it by being very omnichannel and pulling consumers in lots of different fashions, having a first party channel for them to order from and then really pushing that channel. But as well as walk in and pick up and catering and all the other things.
ClusterTruck takes the opposite tack in that it is very focused on delivery and on doing delivery so well and so much better than anyone else that consumers have a high level of repeat. So I think you know the answer here is Ghost kitchens work if you do them correctly. So that means partnering with the right model for your business.
And, different restaurants have different businesses and therefore have different needs out of their ghost kitchens.
Okay, so Carl, next question is for you. Panera, apparently you can pay with your Palm.
Carl: Yes. In a week when DoorDash have said they're going to start taking cash on DoorDash Drive Panera have got something a little different to talk about. We often say that the pandemic has had a last in an ongoing effect on restaurants and contactless and touch free is certainly one of them.
And that could also be in things like hand sanitizer stations, the increase in mobile wallet pay, or contactless delivery from a delivery driver. Panera is taking the Amazon One technology, which allows a guest to pay with their palm, as you say, and actually make it a more seamless transaction.
Now, I've seen this and used it in the past at a Amazon Go location. In fact, I think I put a video out last year experiencing it. But if I bring up this video here of how it's going to work in a in a Panera location, you'll see that actually it's pretty seamless. So let me just do this here if I can and you'll just see a very simple representation. It's right there at the counter and it's this biometric system that ties both the loyalty and the payment together with just the scan of someone's palm. Now the exciting thing about all of this in my mind, Meredith, is that. They have 52 million loyalty members, 52 million, and that accounts, I believe, to about half of their overall transactions.
So this is being tested in one or two Missouri locations, but I think it's interesting, it's interesting for me just to see how they're tying payment and loyalty together.
Now, the one thing you do see on the video there is that it's happening towards the end of the transaction. And so I wonder whether we're gonna get to a place whereby this palm is scanned at the start of the transaction, so that way more information about that particular guest can either be fed to the person that's serving that person, or in terms of the digital interface that is actually then responding back.
So you get to more of that custom orientated experience that we often talk about.
Meredith: Yeah, I love this. And I think it is such a great example of how restaurants bring to life. Noah Glasses concepted the digital entirety, right? Like you cannot have a hundred percent digital transactions unless you solve for that in-store transaction.
And tying that consumer. However they choose to order from you back to one single profile. So sometimes when they go through the drive-through, and sometimes when they dine in, and sometimes when they get delivery, as we say, they're all the same person.
Carl: Okay. Third question this week. In chapter seven of our book, we introduce a concept called the Digitally Native Restaurant.
And when we both looked at this article about Urban Wok and customizable stir fries, we went there might be a tie in here. Would you like to tell us why?
Meredith: I read this article and I thought, they are experimenting with this digitally native restaurant, right? They talk a lot about being what I will call a Delco, which is a delivery carryout business.
They're optimized for those two things. They don't really have dine-in. They are very digitally forward, and then they are using the digital interface to customize items in a way that is traditionally more difficult to do when you're having to engage with an order taker. I felt like there were a lot of pieces in place that spoke to this concept we have of the digitally native restaurant, and I can't wait to go see one of these Uban Woks in person. They're in Minneapolis, so I'll have to get back there to see my family in Minnesota. I was very interested to see yet another experiment with this digitally native restaurant out there.
There are not a lot of them today. I would number them in the hundreds, but we believe, Carl, you and I, that this is going to be a very high growth concept in the restaurant world the way that fast casual has been, and casual dining, QSR before it.
And if you're confused about what we're talking about, then you just have to go and read the book.
Carl, Qu which is the POS company, released their eight digital trends to watch for in 2023. And I've found a lot of interesting things in that report. So can you tell us a little bit about the highlights?
Carl: Yeah, and I've got lots to say as well. Now, firstly, because Qu are behind the survey, they focused on the fast casual and the QSR segment.
But they spoke to 85 different brands covering about 30,000 locations. So it's a decent kind of representation on what folks are thinking about over there. And as you say, there are eight key trends that came up, and one of them was one that we've talked about quite a bit in the sense that digital sales and the spikes that we've seen are starting to level off.
And now they're saying that they're expecting about a third of all sales to be in that digital space over the course of 2023. With QSRs largely seeing more growth than fast casual, but again a third of the sales mix being digital, right? It just goes to show that the digital restaurant is here to stay.
And then similarly, again, following on from some of the commentary we have put out there, the off-premise guest experience remains low with some saying that the scores from guest experience surveys are 15% lower than what they see on-premise, and that's largely as targeted towards order accuracy and kitchen fulfillment practices and the need to improve those. And of course, we talk about this in our new book, path to Digital Maturity and how a lot of this is generated from there being multiple channels being serviced under the same roof at the same time, and the complexity that brings upon the operation.
Now 25% of the respondent s said that selecting a cloud POS was their number one priority. Now, part of this is probably cause Qu are the surveyors, so no surprise there that one pops up. But we are also big believers in cloud POS and it makes sense, right? The more and more brands that are drawn to cloud architecture do so because of the ease of integrations and everything that comes with that approach, but 50%
of the respondees said they plan to update to a unified commerce platform across the next two years, and that's probably driven by the benefit of having all the data in one place and all the operational benefits that can support it from that. But what did draw my attention, Meredith, was that kiosks and CDPs were losing ground in prioritization in 2023.
Now we talk about CDPs in particular in the new book, but it is certainly further along the digital maturity pathway, and so perhaps this is a reflection of restaurants starting to focus and prioritize on what's most important to them. But online ordering is also no longer in the top three investment areas, and it perhaps is something about the point solutions that exist out there.
And they're becoming tougher and tougher to work with them because of the resources, the time, and the complexity of getting all of these integrations and the harmonious relationships between an online ordering system and all the other things within the tech stack. And then talking about alignment functional misalignment came up in the sense that different departments, whether it be IT, Marketing, wanting different things, was trend number six.
And no surprise there I guess that you have a little bit of disharmony in the way in which different leaders in a restaurant business want different things. But it points again, to this need around holistic technology. And then we talk about that in the book, in the sense that, a tech stack is built in such a way.
That actually supports the entirety of the restaurant system as opposed to just specific parts. And I think that is gonna make the executives that obviously all want different things their lives a little easier when we get something closer towards that. And then the last thing is around where tech and alignment is happening in the AI machine learning space, there seems to be a very common interest in how that is clearly an area to take seriously.
There was also some interest in robotics and voice but things like facial recognition, things like crypto and the Metaverse, they didn't get much attention at all.
All right. Last question Meredith. First Watch and a few other companies are starting to turn to KDPs as a way of being able to help them with their full service restaurant. Tell us a bit about your thoughts on this and whether KDPs are something that can support on-premise and off-premise businesses.
Meredith: First of all, I think you have KDR on the brain, because you mean KDS.
Carl: I do have KDP on the brain .
Meredith: I know that our good friend Amazon has been very close with us the last few weeks. But
Carl: KDS, you know what mean kitchen display system. ,
Meredith: a kitchen display system has long been something that exists in big chains.
Heavily used in QSR as a way of managing the orders going through, but it's been less adopted by regional chains, independents and dine-in restaurants. And I think part of that has been because the technology just wasn't there. It wasn't sophisticated enough to make it make sense at a station based kitchen.
The technology also of course, was much more expensive when it was back in an old on-prem solution and now you're getting these cloud SaaS things that are made for this environment. And I think it's really exciting. It's great. First of all, that first watch is putting it in. They talk about the average tenure of their cook being seven years, which kudos to them.
That's amazing. But it's probably not the experience of every brand, and particularly with labor so tight, might not be the experience of any brand going forward. And that means that you have to put the information rather than in someone's head -your expo or your head chef or whoever it might be. You've gotta get it into software.
And so that's one benefit that the KDSs bring literally is just making sure you have that continuity. They also improve accuracy and speed, all the things that need to happen in the back of house that I think perhaps full service dining has had a little more flexibility on in the fast because consumers didn't expect a quick turnaround time.
But now that they're participating in delivery, guess what? Delivery's about convenience. You've got to have that quick turn time and now it becomes more important to have speed in the kitchen. So for all these reasons, I think KDS starts to get adopted in the full service dining sector. And the other thing that I'm excited about, of course, personally I've talked about in the past is that you cannot have automation in the kitchen just with robots without software to drive those robots.
And what does that software need? It needs data about how the kitchen should operate, what goes on what station, how long it takes, how it's related to the other things. All these things that historically happen in the head of an expo and our CTO at Empower Delivery, Dan McFadden, he says in the book that we recently published, Carl, he says, "all of that information inside the expos head- we saw that as data" and data can be codified, right? So as we move that data into the virtual cloud world it becomes something that can be accessed and used by many different things, whether it be a KDS the people using the KDS actually cooking on the line. Or maybe someday: robots.
I love this in particular with my operator hat on the data that you can generate to be able to determine which items are creating the bottlenecks along the line, when particular consistency issues come up with particular staff members.
All of these things are gonna come by utilizing this type of technology. So it's particularly exciting. Okay, look, that is it for the Digital Restaurant this week. I was about to say the Monday minute, but that's our old name, . But thank you as always for listening to us. If you have any thoughts, any questions, please leave them below.
Carl: Again, as always, please like, and subscribe to the podcast if you don't already do and if you have any thoughts on future articles for us to talk about on our next edition, please get in touch with us as well. But until then, thanks for listening.
The Digital Restaurant Podcast is available for you to follow and subscribe wherever you listen to your podcasts. Watch us, rate us and subscribe to the digital restaurant on YouTube and follow along on all our social media digital restaurant channels. Thanks for listening.
Comments