Curbside pickup has long been a successful channel for casual dining chains, forged by the likes of Outback Steakhouse about 15 years ago and now generating a double-digit percentage of the business.
But casual dining no longer has the market cornered on curbside. COVID-19 has inspired curbside adoption at some fast food and fast casual chains as well, as restaurants across segments look to get their food to customers through as many off-premise channels as possible to make up for lost dine-in sales.
Panera is one such company, today announcing the launch of Panera Curbside.
Unlike other chains that have added the service during this crisis, such as Taco Bell, Dunkin’ and Burger King, Panera doesn’t generate most of its sales through the drive-thru. In fact, less than half (45%) of Panera’s 3,200 domestic locations include a drive-thru. That is why CEO Niren Chaudhary is especially bullish on curbside.
“As the pandemic hit us, it caused a massive disruption to our business. On-premise in particular was hit as we had to close those areas to our customers and that is almost half of our business lost very quickly,” he said. “For our 55% of cafes that don’t have a drive-thru, that was a major handicap that created a massive sense of urgency. We had to move very quickly to strengthen our off-premise access for consumers.”
Within seven days, Panera Curbside was in place. The chain was able to move quickly by leveraging its already-robust digital ecosystem that facilitates its Rapid Pick-up business and in-house delivery, as well as its 38 million MyPanera loyalty members. Because of this well-oiled ecosystem, Panera’s ecommerce business is now generating 65% of its revenues.
Initially, curbside was put into place at those drive-thru-less locations, but the chain has since added the channel to its entire system. Also, to support the launch, Panera enhanced its geofencing technology to notify cafes when guests arrive, and extended its free WiFi service to its parking lots. Chaudhary believes these two features will differentiate Panera’s curbside business.
“To my knowledge, we’re the only national chain that has geofencing, which gives customers who opt in that added convenience of not having to do anything to trigger their arrival. We know you’re there and we just come out and give you your food. It’s a nice addition in terms of convenience,” he said. “Second, recognizing the world is shifting to outside of the café, we expanded that our free WiFi so customers who are waiting for their food can use that service just as they would inside.”
Curbside is already tracking at 5% of the Panera’s sales, compared to about 15% of its Rapid Pick-up business, which was put into place about five years ago.
“We’re encouraged by that,” Chaudhary said. “Clearly customers like the convenience of ordering ahead, arriving and having an associate come out to deliver their food in the parking lot.”
Chaudhary expects curbside to be in play for Panera for the long term. Undoubtedly, with the exception of catering, off-premise has become table stakes in this crisis and many restaurant executives don’t see that changing. At least, not any time soon.
That said, in the big puzzle that is “off-premise,” curbside is a rather appealing piece, especially compared to delivery. For consumers, there aren’t the wait times or those notoriously high commission fees that come with delivery. For operators, there aren’t as many logistics to navigate. Chaudhary adds that check sizes tend to be higher for curbside than dine-in.
Still, an omnichannel approach is the way of the future. COVID-19 has made that painfully clear for many operators.
“Whether it’s curbside, pick-up, delivery or drive-thru, off-premise channels are increasingly important in our new world,” Chaudhary said. “For us, our broad omnichannel presence before the crisis has helped us. These habits were already ingrained in our customers. That is probably why we’ve seen quick traction for curbside. Given where we are now, creating more avenues for more convenient access points for customers is the right thing to do.”
Panera is promoting its new curbside service with $5 off any $20 order from now through May 31. Customers who choose curbside place their orders for Rapid Pick-Up, and indicate the make, model and color of their vehicle in the “special instructions” box. For those who opt-in, a Panera employee will bring orders to the car upon arrival without any action needed. Those who don’t opt-in to the service need to tap ”I’m here” in the MyPanera app or order confirmation email upon arrival.
Source: Forbes Business