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Is COVID-19 forcing restaurants to embrace innovation?

 

Restaurants are currently being rocked to their cores as the fallout from the unexpected Coronavirus continues to sweep the globe. After making its presence known in the US just months ago, nobody anticipated the impact that an infectious disease would have on the health of our communities and economies.

 

While many industries are being decimated, restaurants in particular are being hit especially hard. Many states are forcing restaurants to cease all dine-in operations forcing them to terminate employees while scrambling to find a means of survival.

 

As a restaurateur, a hospitality employee, or someone that works with restaurants for a living, nobody could have seen this coming, or at least not on this scale. Just a couple weeks ago, restaurants nationwide were making their schedules, ordering inventory, greeting their guests, and it was all business as usual. Suddenly, business as usual turned into everyone’s worst nightmares.

 

As the fallout of COVID-19 could last for several months to come, businesses are being forced to either pivot into new directions or close down all together. We have seen massive layoffs from restaurants who have consciously decided to close their doors. Many bars and drinking establishments have been forced into hoisting the white flag as well but, that doesn’t mean everyone is willing to follow suit.

 

For other restaurants who rely heavily on food sales, we have been pleasantly surprised by their willingness to adapt to the requirements of the “new world”. Consumers are becoming increasingly more demanding every year which is why companies like UberEats, GrubHub, Postmates, and Doordash have grown so quickly in popularity. As people have been forced to self-quarantine, third party delivery sites and ride-sharing has been way down. Not to mention, consumers are likely more price-sensitive right now and these platforms are notorious for being expensive.

 

Many industry experts have long been calling on restaurants to stop using third party delivery services as they charge commissions that often exceed the profit margins per order for a typical restaurant. For example, GrubHub has been known to charge anywhere from 15-30% commissions per order for a single location restaurant.

 

Using simple math, most business owners would recognize they would be upside down on their services, however, many are swindled by the “marketing benefits” of using these services. In reality, restaurants opting in are essentially coughing up their valuable customer data in exchange for lower profits. Once the data is made available to the third-party providers, they can utilize this information to sell a restaurant’s customers to their competition in the form of ads.

 

Now, back to the positives. As consumers are being forced to stay in their homes and limit their exposure to other people, new studies have suggested that COVID-19 is not likely to be passed through “food-borne” preparation. Simply put, the virus is said to have a much lower survival rate when it comes to cooked food making it lower risk to order take-out (full disclosure: we are not doctors, please do your own research and exercise extreme caution).

 

Many food-driven restaurants are starting to recognize the opportunities of offering curb-side takeout as many people feel it’s a safer option than visiting the crowded grocery stores. Depending on the restaurant, they can offer additional assurances to customers through the use of facemasks, gloves, and by following the requirements of the CDC. We’ve noticed many restaurants publishing something similar on their social media pages.

 

Restaurants who have decided to embrace technology platforms to offer their own curbside pick-up have an opportunity to leverage their own data to get a leg up on their competitors over the next few months.

 

In theory, having to answer the telephone, punch an order into a POS system (or handwrite a ticket), and then collect payment doesn’t seem like a whole lot of work, right? In the past, this was likely true, however, as the dine-in sales have ceased operations, 100% of orders are considered takeout making every step of the process crucial to being efficient. Many restaurants who are relying on phone orders only will likely struggle to keep up with the ringing demand of their customers.

 

Online ordering platforms can offer tremendous benefits to restaurants who are transitioning to a curbside or delivery model. Below we will breakdown some of the benefits in more detail:

 

  1. Reduces the amount of time employees have to spend on the phones
  2. Eliminates the need to manually accept credit and debit cards over the phone
  3. Eliminate the redundancy of having to enter the phone order into your POS
  4. Customers can pay and tip online removing the need for additional human-to-human exposures (curbside should be a handoff, not an exchange)
  5. While our data is limited, we have actually seen a 2.5% increase in tips when customers use online vs. calling in their orders.
  6. Restaurants are capturing customer data with every order (phone numbers, emails, addresses)

 

Using sophisticated online ordering and marketing platforms, restaurants can start building a funnel of existing customers that will pay them dividends for months and possibly even years to come. Just like all businesses, it’s much easier to sell to an existing customer than it is to generate a new one.

 

We are seeing our restaurant clients capturing more online data at a record pace. To give you some perspective, our average restaurant is capturing 15 emails and/or phone numbers from their clients per day. If you multiply that number by 30, they should anticipate collecting 450 pieces of valuable data per month. For some of our clients, they will collect more email addresses in their first 30 days of implementing online ordering than they did in the last 24 months of operating their restaurant.

 

With the right approach, these restaurants have the ability to realize the benefits of third-party online ordering platforms without coughing up the commissions. While COVID-19 has brought about rare circumstances where people are more inclined to pick-up orders than get delivery, this trend of using native online ordering could be here for the long haul. If implemented correctly, this presents the restaurant industry with an enormous opportunity to squeeze out the third-party delivery sites which is the industry’s biggest threat outside of COVID-19. Many third-party delivery sites already have ugly balance sheets and may not be able to weather the storm.

 

Once restaurants can see firsthand the benefits of operating more like an eCommerce provider, they will likely want to keep the additional flow of revenues from their online ordering systems even in a post COVID-19 world.

 

Below, we will outline the steps we are taking to not only ensure our restaurants clients can survive the COVID-19 pandemic but, we are setting them up to thrive in the long haul.

 

  1. Integrate to your POS or get a new POS placement for free
  2. Build out your custom online ordering menu with categories, items, and modifiers
  3. Implement a Cash Discount incentive eliminating up to 85% of your total monthly credit card processing fees
  4. Integrate orders to your kitchen and bar printers for seamless ordering and food prep
  5. Launch an entirely new WordPress website with custom-branding and integrated payments to your new or existing POS system
  6. Configure your social media accounts such as Facebook and Instagram to launch ads to customers in your surrounding areas
  7. Accept orders, capture customer data, and deliver your product to customers
  8. Retarget your customers with hyper-personalized offers via email marketing
  9. Track 100% of your profits

 

If you are interested in setting this up for your restaurant, contact to us today to see if you qualify for our restaurant relief program. We offer free hardware, no setup fees, and 0% processing though our Cash Discount incentives.

To view sample merchant, click the following link! https://smittys.smartonlineorder.com/