In the early months of the pandemic, as ordering shifted online, quick-service restaurants (QSRs) had the advantage. With a model already highly dependent on off-premise ordering, the shift towards speed and convenience only bolstered their value proposition. Full-service restaurants (FSRs), meanwhile, have been tasked with a more dramatic transformation.
As consumers’ digital ordering habits have remained even as mobility has returned, FSRs are forced to rethink what role they will play in the post-pandemic future. Paul Macaluso, CEO of Orlando, Florida-based breakfast, brunch and lunch FSR chain Another Broken Egg Cafe, which has with 75 locations in 14 states and dozens more on the way, spoke with PYMNTS about the decisions facing table-service restaurants in this year of change.
“The rise and stickiness of off-premise sales really surprised me. COVID moved our off-premise business from 2% of sales to 15%, and even as our cafes reopened to full capacity, it has continued to grow,” Macaluso said. “While elevated service and hospitality will always be at the core of what we offer, more and more of our guests are opting to forego the full-service experience and just get our delicious food, either for pick-up or delivery.”
PYMNTS research from the report “The Bring-It-to-Me Economy,” created in collaboration with Carat from Fiserv, finds that consumers are now 31% likelier to eat their restaurant orders at home than they are to dine at a restaurant. Additionally, 58% of consumers are ordering restaurant-made food online more often than they were before March 2020.
More details: Bring-It-To-Me Economy Ascends As Consumers Embrace Home-Centric Lifestyles
Additionally, findings from the 2021 Restaurant Readiness Index, a PYMNTS and Paytronix collaboration, indicate that, even for restaurants with table service, only 39% of sales are generated through on-premise channels, indoor or outdoor dining, leaving more than 61% of their sales coming through off-premise channels.
Read more: QSRs’ Lagging Loyalty-Reward Investment Hurts Innovation And Sales
Learning from the QSRs
Macaluso noted that the chain had an advantage over other FSRs at the start of the pandemic, having already had relationships with third-party delivery services and ordering marketplaces.
“What would have normally taken 4-6 months was set up in 45 days,” he said. “That quick pivot to off-premise was a major factor in our success over the past year-and-a-half.”
Given that the chain’s food is already available for digital ordering, he noted that the company’s main digital goals looking ahead center on utilizing consumer data to improve the experience and drive sales.
Currently, major QSR chains are racing to provide the most personalized digital experience, already seeing great success in surfacing data-informed deals and offers to consumers based on their previous behavior and on segmentation capabilities.
See also: Getting Creative With Digital Loyalty Keeps QSRs’ Health-Concerned Customers Engaged
“Fine dining and casual dining — those are the two that will continue to get very much changed (by the digital shift),” Mahmood A. Khan, Ph.D., FAND, FMP., professor of hospitality and director of the MSBA program at Virginia Tech’s Pamplin College of Business, told PYMNTS in a recent interview. “Fast food will keep developing fast. In fact, it was the least affected by the pandemic.”
Related news: Digitally Powered QSRs Are Devouring Their Dine-In Restaurant Rivals
The Catering Comeback
Another category of foodservice devastated by the pandemic was catering, which is part of Another Broken Egg Café’s offering, although somewhat predictably, Macaluso said, it has “not been a huge focus” during 2020 and 2021, though he did qualify that the company has seen “pockets of success” with its catering business in this time.
“Through consumer research, we know the guest demand is there,” he noted. “We are currently launching a system-wide effort in Q4 of 2021, targeting 5% sales growth for 2022 and then to double that again in 2023.”
To reach this goal, the company will utilize online catering ordering marketplace ezCater, and from there, the chain will “decide on incremental digital tools beyond that.”
The digital catering ordering space has been transforming quickly in the past few weeks alone. Instacart recently announced that it is acquiring catering software company FoodStorm with an eye toward integrating the latter’s order-ahead and catering capabilities into the Instacart platform. Additionally, restaurant marketing and commerce platform BentoBox recently launched its Pre-Order & Catering product.
“We spoke with a large number of restaurants that were offering catering and other types of preorders … and we found that they all had similar problems,” Brian LeVee, vice president of product at BentoBox, told PYMNTS. “There weren’t many tools available in this space for these types of catering and other types of preorders … We saw those deficiencies were particularly magnified by COVID-related issues and staffing shortages.”
More details: As Takeout and Delivery Soar, Catering Businesses Have Been Left Behind in the Digital Shift
Now, powered by the digital shift, catering is due for a comeback.
Digital Meets Brick-and-Mortar
As consumers have come back to restaurants, expectations changed by the digital habits developed during lockdown, many are looking for a similar degree of frictionless convenience in their on-premise dining experience.
Macaluso noted that Another Broken Egg Cafe is aiming to offer “that ability to fully engage with guests efficiently, right at the table” through the use of digital ordering tablets for servers and pay-at-the-table capabilities for customers, powered through the addition of Revel’s POS systems in restaurants.
Additionally, the restaurant is also digitizing waitlist management to keep front-of-house operations flowing more smoothly. This change may seem like a minor one, but it is key to the goal of bringing eCommerce convenience to the on-premise occasion.
“Part of our commitment to providing an elevated dining experience in an upscale casual environment means reducing downtime or wasted time for our guests,” said Macaluso. “Our other main challenge right now is the pacing and sequencing of several large and impactful technology initiatives. We have four major initiatives to launch within the next six months, so getting them all lined up, properly sequenced and resourced is a constant commitment.”
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