What Role Will Technology Play in Restaurant Recovery?

You're listening to the main course where food is serious business. Listen along for insights strategies forecasts and thought leadership from the frontlines of food with your host Barbara Christine. Welcome to the main course. Our guest today is brad Dewey from restaurant revolution technologies. And we're going to talk first a little bit about your background because you kind of come from an interesting tech background before you got involved in the restaurant industry. So branch you can kind of fill us in a little bit about your background. Yes sure. Thank you Barbara. You know my background is a bit different than many people that got into the restaurant industry where I had experience in Domino's franchising way back in the day. As you mentioned I've spent my entire career in technology and really around digital transformation. So my first big transformation was with Napster I was the president of the legal Napster and we went through the whole digital transformation of the music industry. And we were talking about subscription. And now 14 years later it actually happened and subscription is the primary model. I then went to T-Mobile and ran devices and services during the transformation of the communication industry really moving from smartphones or from regular funds to smartphones and data planes and the app economy. So that was pretty spectacular transformation. I lived through and then most recently with Sony was in the living room going from hardware and disk to streamed audio throughout the home wirelessly. So about three years ago, I was approached about an opportunity in the restaurant space with restaurant revolution technologies and I was incredibly excited about the transformation that was about to take place and frankly, I was surprised when I first started doing a research that a lot of it had not already taken place but that was the exciting part an enormous opportunity that much of the restaurant industry was already off premise but only a fraction was digital. So we really saw the way to help chain restaurants grow their off premise business by embracing digital moving to online and mobile ordering and particularly direct ordering. So that's where I leaned in and saw the incredible opportunity. And it's now come to fruition over the past three years and it seems to be accelerating. If anything so explain the company's mission a little bit what you strive to do what kind of problems, you try to solve. What we really focus on is partnering with chain restaurants and helping them grow their off premise business and what that really means is helping them drive takeout delivery catering et cetera. And we do that with an ordering platform that we call order one. So the nice part is it allows customers to log on to a chain restaurants website and see the entire menu enter their order and we actually have patents that protect the integration with the restaurants point of sale. So this is not something that goes to a tablet and people have to re-enter but those orders go directly into the point of sale and when they print off it looks just same as if a member of the waitstaff entered it at the restaurant. We also power direct delivery with third party marketplaces. So order directly from a Jason's Deli website or from on the border and the delivery will actually be done by DoorDash. But it's actually done from the brand's experience. So that's what we really do with our ordering platform and instead of charging huge upfront fees for software licenses we actually spread it over time. So it's a very low monthly fee per location. So we're really helping them drive off premise and off premises is really the greatest growth opportunity for the restaurants pre COVID and COVID has really just solidified what a massive opportunity it is. So we work with those chain restaurants. We keep it all in their brand our brands in the background. So it's not restaurant revolutions but really that chain restaurants brand and then we share with them best practices. What we're seeing in other areas so that we can help them grow that revenue and grow that percentage of their business. And how has the business been affected by cove massively. And I'd summarize it by saying the pandemic accelerated the future and the future is digital and direct. And what I mean by that Barbara is before the pandemic we were talking to customers or potential customers and they would say Yep I want to get into digital ordering but I'm opening a new restaurant and I don't know if I could really focus on that. And if they did not have off premise during the pandemic many cases they were out of business. So it became instead of a nice to have it became a lifeline and a must have the other big thing that you saw was direct ordering. So while there was a lot of marketing saying yes help restaurants order through third party marketplaces what you heard the restaurants themselves say is they can't survive giving 30% to third party marketplaces. So please order direct and you even saw numerous municipalities say we're going to cap revenue share for third party marketplaces. So that restaurants can actually survive. So where we were saying digital is the future and you have to have your own direct ordering from your own website rather than just third party marketplaces. All of that was accelerated with the pandemic. And while we were showing industry trends about the now economy and showing that consumers wanted the convenience of delivery and digital ordering it was really proven through the numbers. I'll give you one example when I say it's been accelerated prior to covered. We got a certain level of overall digital ordering an off premise with all of our clients and that included online and mobile curbside pickup as well as just regular pickup when you saw COVID hit these numbers went off the charts in each and every one of these locations and many cases the overall order numbers went off the charts even though they had fewer locations open now on the other side of covered where you saw that watermark if you want to visualize it go way up with cove ID it has basically remained 70% higher than where it started before cove. So it's not something that was temporary that suddenly people were ordering more pandemic and restaurants open and it drops back down. Instead, it has set a new high watermark of over a 70% increase. And again that's sometimes with very limited number of doors open. So when I say that the future has been accelerated by the pandemic it is digital it has forced restaurants to understand that they are a technology company. It's forced them to understand that it's an now economy and really look to digital as a way to automate and improve the customer experience and improve their economics. So it's been quite an interesting time to say the least. Do you think that this pace is going to continue with off premise as restaurants kind of reopen. Yeah the interesting one is absolutely this is the short answer and I would point to it in a couple of different ways. One is surely letting clients now and those that are launching with us understand the customer expects digital ordering expects the convenience of delivery. And so you need to provide it. So there's been much more a recognition that it's not a nice to have the truly a necessity. And then I shared with you those stats where even as restaurants begin to open the level of off premise is way higher sustainably 70% above at least where it was before. I think really the next wave that we'll see Barbara is restaurants understanding that instead of being scared to make an investment in digital they will start to recognize that digital is the best way to drive their performance. The return on investment than they ever realized. So let me explain what I mean in retail during some of these other digital transformations we would say that your digital door is your best performing door. And I will explain an example. Best Buy used to focus on opening another big box Similarly restaurants that say I can't deal with digital because I'm opening a few new location when best buy targets really leaned into e-commerce that's when their sales took off. The customers have a great experience and that's where you've seen them set record numbers during the pandemic and before that. Similarly restaurants if they view digital as a way to accelerate their growth they will quickly find the digital as a holistic door. If you want to call it dramatically dwarfs any particular singular restaurant and to date a lot of operators have a lot of costs and they look at their line items and say man I got my food costs and labor technology costs. They view it as a cost. I will share with you from one of our products, which is called connect. It takes third party marketplace orders from the likes of ash and Uber Eats and we inject them right into the restaurant's point of sale. We had a client and now many clients. But we did a case study that showed when they invest in our software product which was that particular product is less than $100 a month they save on average $43,000 per location a year it is absolutely phenomenal. So when you look at digital well being an actual investment and a return that's where I think restaurants will start to shift their perspective. So instead of oh this is going to cost me $100 a month at that location they will actually save $3,600. And that's from the two members that used to take those orders on the tablets and have to re-enter them into the point of sale. It's all truly automated. So when I look at the next pace of adoption and investment I think restaurants will start to see digital as their friend and their fastest way to drive margin. And it's no longer going to be that cost item. So I think while the pandemic has accelerated the future when you take that different lens you're you'll say man I can drive a much better experience for my customer given the convenience they want I'll envoy invest less in bricks and mortar and more and bits and bytes and drive much more dollars to the bottom line. So better experience better return for the restaurant. So that's where I think it will continue to accelerate. Do you think it's a matter of that now that they've had to have these digital tools in their hands that they realized how important they can be and are you know if they're not open to the digital door there they are restaurant doors are not going to be open. So they're kind of realizing that and seeing that yes they are tech technology companies and technological businesses. Yeah I'll share in it an example but I think it's very relevant Barbara when I was at T-Mobile it was during the very early adoption of smartphones and data planes and what we were showing to customers when they would come in is the experience that they could have. And this sounds very basic, but you can have emailed on the go. You can have the phone in your pocket and it was it was so refreshing. We were required to work in the stores. So you had a direct experience with customers, even though we were corporate employees and to see the smiles on customers' faces when they got a smartphone and realized oh my gosh I can take pictures you mean my email that oh my gosh. So it was a big eye opener. And then once you put it in their hand all they wanted then was how do I get higher data plans unlimited data plans a richer pixel camera and all the light that we've seen unfold. So similarly now when you put these digital tools online and mobile ordering into our restaurant clients hands you will see that all the things we've been saying that the average ticket is typically higher. They realize it when they see the growth that's happening. What percentage of their business is now being done through this platform that it dwarfs anything they could possibly do at a singular restaurant location. It's actually experiencing the tools and giving those tools to their customers that they see the difference. Many of our clients had the tablets from third party delivery and it was a headache. There were staffing. Once we injected those into the point of sale their operations dramatically improved their people were happier. They didn't have as many customer complaints by miss queuing in the orders. So they see all of the growth and the potential with it. The other thing that I'll just touch on. But it's a whole deeper topic is we're seeing our client be so creative. So for example before pandemic we had curbside pickup but not many of our customers would deploy it despite the fact that we seeing all the benefits when Colbert hit everyone wanted to deploy it then certain cities allowed restaurants to sell alcoholic beverages for to go customers. We shared that best practice and you saw sales just take off. We talked about family meal kits and family plans so that you know you can not only get dinner that night but get a kit for the next night all delivered. So you saw all this creativity and one that I thought was fascinating is one of our customers has five locations. But what they said is, we're regularly going to deliver lunch to this phantom location so they don't have a brick and mortar location but you can order for delivery at that location each day. So they've actually created 10 phantom locations that have a daily delivery item at each of these locations and they've now literally tripled their footprint in a way without having to invest $1 in brick and mortar so they made it more convenient for customers expanded their capabilities. And I think you're going to see much more of that with ghost Kitchens double lined Kitchens. You know with one line dedicated for those guests that are ordering on premise and another one dedicated to off premise. But we're just scratching the surface of what's possible. And if people can embrace it they will see for themselves the incredible opportunity that's there with digital talking about people embracing things. I know myself as a guest you know on now. I am so used to using QR codes when I go to a restaurant and I prefer it just for the safety factor that that's my phone. I'm the only person who handles it. And so what other you know one of the ways has the pandemic kind of changed the guest experience in a restaurant as terms in terms of what the guests want out of a technology at a restaurant. I think one of the biggest things and we saw this all draw an analogy. If you saw the music industry before it went digital you might hear from an artist or a particularly a record label that a customer really loved buying that album with 12 songs. And we're really excited and they wanted to listen to the full art piece even though there was basically two good songs on it right. When digital enabled customers to do what they wanted. You saw people buying songs all a cart and creating playlists or even better subscribing and they got access to the world of music for the equivalent of the c.d. they used to buy a month. So I use that to show if you let the customer choose if they're driving by your location let him drive-through if they want to order ahead and drive-through and pick it up let him do it if they want to have it delivered at a certain time of day let them do it. So what we've now been able to do is enable the customer choice. And so those costs those client of ours that are doing the best are the ones that allow the customer to engage with them how they want they love their food and that doesn't mean that food has to be experienced sitting down within four walls but that it can be delivered. It can be curbside pickup. It can be curbside pickup and they run it to your car. It could be order ahead for delivery and we'll touch on catering in a minute but that's where if you really let the customer choose that's where you're seeing new innovation and that's what I'm saying instead of someone having to drive let's say 30 minutes to the restaurant to pick it up they do a phantom drop at that location for lunch. It's literally created a digital equivalent of their brand being present. But they've made it more convenient for the customer. So I think it's really letting your customer engage with you and then making it really convenient for the customer. Hey let's talk about catering caring was doing so well before the pandemic not just the traditional catering but business catering all of these things. The numbers were sky high. How as the pandemic affected catering and I guess what did that what do you see as the long term effects and what would be the new normal for catering. Yeah it's a great question, Barbara. And again I'm so pleased to see how innovative our clients were. So we have several clients that we're really doing best practices with regard to catering before the pandemic and a lot of that catering was about catering for offices. So whether you were the meeting coordinator or maybe the administrative assistant if you had a group a meeting with let's say 10 people you would get a Platter of say deli sandwiches. And it was delivered on a Platter and set out for the meeting. Well suddenly a couple things happened with the pandemic one. No one was at offices so many of these locations that were thriving with catering for offices suddenly had to shift and say how do we address our client base that's now working from home. So part of that were some of these family meal kits doing the family platters and things like that. So that was one big shift. The other one that we seen is it went from the one big order on a Platter two personalized group ordering. So let me explain what I mean by this catering that same meeting of 10 people you show up it's a Platter of sandwiches and in our new covered world no one wants to be addressing a Platter of sandwiches within six feet for anybody. So instead what happened is that same person that could coordinate that meeting as they now return to the office. They're saying OK I'm going to do the meeting I'm sending you the link to the menu everybody order their own personal meal, whether it's the sandwich sides et cetera. Now when even though it all gets delivered it's delivered all individually wrapped and with each person's name on it. So it's really another layer of personalization and it's actually a better experience but it's one that we enabled with technology. The other one that we did is that let's say now take the example of our amazing teachers that are now many of them working from the school. But no no children in the classroom. They're using the technology at the classroom but doing it remotely for the students. Now those teachers say, OK, let's get Jason's Deli on Friday or let's get it today. They can all submit their order and even put each of their own payment methods in. Whether it's a gift card credit card whatever that entire order is delivered to the school for each of the teachers individually wrapped with their own payment but done with the convenience of that grade. Jason's Deli food on premise our on premise at the school off premise from Jason. So that's where it's headed and I think when you look at catering you really have to think of it as how is it now digital. How is it personalized and how can we capture it not only for these office buildings but at home. If we take the other side of the equation of the schools many kids that's that spent their lunch on campus every single day are now being fed in different ways. And I can guarantee you from the stats we're seeing not every parent is making lunch for their kid each day. So they're actually ordering digital getting delivery and and that's all being enabled by digital. And this digital future that we're talking about that leads me into you know what. What is the role that technology is going to play as we enter a restaurant recovery. I think the role that it can play is multiple fold. So the nice part is I remember the literally shell shocked nature of many of our customers when they didn't know if their governor or the mayors were going to close all their doors or what but when they heard that off premise could be there that technology and the digital ordering became their lifeline. And so they operated and changed their processes so that table service people maybe became runners for curbside pickup and that and you know alcoholic beverages became a total different trend. So technology became their lifeline and an enabler. Now what we're seeing is as different locations open up they can open the dining room but many people don't actually want to sit-in or they're outdoors seating only so they're using digital in connection with their physical location. But now as it goes as it gets broader many people are saying and you'll see this from leading brands out there. They are redesigning their entire footprint with technology and the consumer's new normal in mind. So you might see some of these pictures online but have a quick service restaurant that's now for drive-through lanes below an outside dining room up top and the kitchen suspended above. So technology and the consumer's desire for digital is changing everything dramatically. And the other thing that technology does is it's very flexible so it can help with the new catering these new types of ordering. Even with the QR codes you mentioned earlier a consumer can now come in and order their food in advance for pic or for pickup or even eat in have it delivered to their table. Add 2 to menu let's say additional checks check out all contact lists on their mobile phone. So it really gives technology is just such an enabler for the Fed flexibility. But it's one of these restaurants have to embrace it. It's not something to be feared but it's something that can really drive not only top line but their bottom line profits as well. Well do you think that because restaurants have had this experience now and seeing how the technology works that now as better and improved technology comes on board they'll be much less hesitant to bring it on into and to try it out. I certainly hope so. And that's what we've seen in other digital transformations. You know one of the top things that I've learned from all the my digital transformation experience is any company whether you are a construction company a restaurant a retailer you have to view yourself as a technology company. How can you use technology as a competitive advantage against other people in your space. And also how can you improve the experience for your guest and even for your associates or your you know your employees. Many the things that I've seen happen in digital is when digital comes. People view it as a threat rather than an opportunity. But I've seen amazing technical jobs created in each of these industries as it moves from an analog world to digital. And I see the same thing happening in the restaurant industry where maybe people that were servers and cook kitchen staff are now working in digital marketing in digital ordering. Being the head of off premise or part of the off premise team getting much more involved in digital marketing showing the y of every dollar spent. So I view it as not only an opportunity for an improved experience with guests but associates. And that's why I'm just so optimistic about the future of the restaurant industry. In what ways do you see technology letting them enhance that still face to face hospitality aspect. I'll tell you what is very interesting is deep down almost everybody in the hospitality industry loves people and wants to please their guest and deliver a great experience. And when you realize that that experience doesn't have to be a sit down four walls hour plus experience and instead you can have a very great experience with that customer by giving them a surprise and delight promotion free delivery for the football game tonight or here it is for Valentine's. We want to enable you to have a great experience with your significant other. We've created a special Valentine's package. All of those are delighting your guests. It's just doing it in a method that might not be face to face for that hour plus experience. And so we are just scratching the surface when you actually now have a guest come in order directly from the restaurant. The restaurant now knows who you are what you're ordering and what you like and they can craft very personalized promotions offers that will delight you and keep you coming back. And that's really you know right at the heart of what people in hospitality want to do they want to please their guests but it doesn't have to be face to face. It can be through digital portion digital portion physical and basically everything in between. So you sound very hopeful about the future of the restaurant industry. So what are some of the things that give you hope looking toward the next year as we move forward even beyond that. What are what are those things that you see on the horizon. I think the things that get me most excited is it's not crazy science fiction that is required to deliver this great experience. It is executing on the fundamentals and doing so today. So let me give you an example. In many industries you say OK Yeah the drones will deliver this in the future, including the restaurant industry. And I just can't wait for that to happen. You can do it today. And if you execute on the fundamentals from offering Omni channel ordering being very disciplined when you pack that order. So that you have checklists so that nothing's left out of the order and then it's delivered at the time and in the manner that that guest wants whether that's curbside pickup delivery, et you can do all that right now. But if you don't execute on the fundamentals you pack the wrong thing. People are going to be upset. So it's one of these you don't have to wait for drones you can do it today and it's all available technology. One of the things that I get most excited about is we were pitching the size of this opportunity we were pitching the reason to go direct versus third party marketplaces. The reason to eliminate the tablets and now we have case studies numbers to show not only that it's continuing to happen but it's happening with greater guest experience greater revenue to the top line greater returns to the bottom line. So I'd case basically summarize all that don't wait. Do it now. Jump in. These are not things that you have to wait but things that we can deliver right now today. And we're getting much better about rapidly deploying for our clients as well. We had one client from the moment they contacted us. We had them live within 15 days. So this is stuff that we could just deliver for them rapidly. So please do so embrace it. It's the future and the future is digital and the future is now. Great thank you so much. This is perfect.