FUTURE OF RETAIL | Letters from the CEO Series - "Restaurants"​ (III of III)


By: Stephen Hart - Founder & CEO of DedON | June 2021


Intro


I believe the restaurant business is an area that is likely to go through the most change in the next five years. I think this is an exciting opportunity to blend the best of pre-pandemic with the habits that we have developed, as well as the silver linings we have discovered, during the pandemic.

Space Changes

First and foremost, the layouts of front of house and back of house in restaurants will need to adapt to fit pandemic norms. For example, dining rooms are going to be challenged to keep each party together while separating from other parties in the same dining space. I imagine a space that allows more distance between tables, while still allowing each table to be an inviting space to gather. This provides a great opportunity to use experience and decor features throughout the space, like an integration of indoor/outdoor seating even in colder climates. I’ve always loved rollup doors that can be raised on a hot summer day, opening the dining room to the fresh outdoor air, or rolled down to provide an open glass wall experience in colder months. But in terms of physical distancing, we’re going to have to spread people out more than we used to, and use outdoor spaces offering that option while indoor space is at a premium.


Speaking of indoor space, the allocation of front and back of house will need to be rethought. One thing that has really blown up during the pandemic is the rise of takeout and delivery orders. This has afforded restaurant operations options to reimagine their business model (dine-in vs. takeout) and rethink their space accordingly. Thus, it only makes sense that the back of house or prep areas will increase in size as the volume of food prep may increase (because not all food will be destined for the dining room). Not all customers will want to dine in, because along with the “we’re free to go out and eat” post-pandemic rush, I believe there will also be a fearful group of people wishing to choose the takeout or delivery option for the foreseeable future. In the front of house, there is only further opportunity to sell prepared foods or ingredients off the shelf like a grocery store, along with swag and other related and complementary products. Better yet, imagine using these display features as a way to separate dining parties. I really do love brand partnerships as an idea for restaurants and complementary brands to sell goods to create a retail space in a restaurant. Overall, in the next 5 years, restaurant brands will need to tackle and evolve their physical spaces as consumers’ demand will be different.

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Tech Integration


As previously mentioned, the silver lining of the pandemic for restaurants has been the extension for takeout and delivery options - and this isn’t just restricted to fast food restaurants. However, all other restaurants need to implement a strategy to serve customers who are not sitting in their locations. I believe, much like retail restaurants, we need to streamline the relationship between technology and delivery.


The rise of food delivery services has proven that convenience is among the most important factors for customer satisfaction. Specifically, restaurants will have the opportunity to own the tech that allows customers to pre-order for takeout and eradicate traditional dining room menus, as the tech could be more efficient, safe, and comfortable for customers and employees alike.


The promise of technology is to make things easy. I would love nothing more than a restaurant to be able to anticipate my arrival to pick up an order. The expansion of drive-through and curbside pickup is great, but the real opportunity lies in integrating technology; imagine eliminating the experience of walking into a restaurant, giving your name, waiting as they search for your food, paying, and finally leaving.


Technology could also help with back of house efficiency and could create an impressive customer experience, for both in-store and pickup. Restaurants with the ability to own their own technology could bypass delivery services or, even better, create exciting pickup options that customers might choose over delivery. Remember, bricks and mortar is each brand’s opportunity to create a unique experience to add value to the customer experience. Further, I think there’s an opportunity to engage customers using technology by selling meal kits that can be used to cook some of the restaurant’s signature items at home. This could give a local and unique offering and could also be run on a subscription model. Technology is the future, but when integrated with bricks and mortar, the possibilities are endless and exciting.


Dining Experience

The dining experience is still an important aspect of restaurants in the upcoming years. The expected boom of post-pandemic dining experiences will be real, as I’m sure we’re all looking forward to the day we can sit on patios with friends. That being said, I think the experience a restaurant offers will need to be more unique and entertainment-worthy than in the past. I believe the restaurants that will flourish are those offering customers an immersive experience. I love the idea of restaurants partnering with other entertainment services or products to provide this one of a kind experience. For example, a partnership between hobbies or athletics, like an Apres-ski social gathering. Or a fashion brand that can integrate products within a restaurant environment where the waiters wear the brand’s clothing, and both businesses benefit. It’s a win-win on both parts!


I think it’s going to be more important than ever for the dining experience to be more than eating and socializing. It will be a huge benefit for any restaurant that can create a unique destination, whether it’s the place to watch the big game, or a tranquil escape from reality. The dining experience will be alive and well but integrating a second reason to be there doesn't hurt either.


Locations


The location of restaurants will need to be rethought in the next few years due to factors the pandemic has possibly changed forever. Specifically, I think the work from home option will create interesting opportunities for both space and location. It’s reasonable to think that the suburbs will become a popular and bustling area as fewer people need to commute into the inner city everyday for work. I don’ t believe the inner city is dead, but I don’t think it will remain the concentration for day to day restaurant experiences.


Regarding the work from home concept, there is an opportunity for suburban restaurants to repurpose their space into social or group meeting spaces. These could be options for fully catered lunches for companies that will choose to have less permanent office spaces and more remote workers. I think this face to face interaction will be necessary and periodic group meetings are inevitable. Restaurants are an ideal fit for these informal meetings, where small teams can gather to maintain their company’s culture and unity.


Further to this, some locations that were typically not lunchtime hubs may find themselves busier in off-peak times than they were before the pandemic. One of the biggest benefits of work-from-home technologies is the flexibility of time and location, so I can imagine people will take advantage of working from restaurants mid afternoon or taking their time with extended lunches. I’m sure people will take advantage of newfound freedom to socialize during these more flexible work weeks, and what better place to meet up than a restaurant? I’m not going to pretend to have the answer for which locations will be red hot and which ones might struggle, but I believe the past will not be a good indicator for which future locations will see the most traffic. I believe the restaurant industry has been affected in such a way that many of these trends will need some time to work their way out. At some point, restaurants will find a balance between traditional and post-pandemic restaurant habits.


Conclusion

The brands that understand which of the above segments they can cater to and deliver most effectively and efficiently will be the most successful in the coming years. Integrating tech and providing impressive service has always been and will continue to be the key. Over the next few years, we will see an exciting time for restaurants, as they reclaim and renovate their place in our lives, integrating aspects of pre- and post-pandemic dining, and I know we’re all excited to be a part of that change.


The brands that can make the post-COVID world feel safe while making it a not too distant experience from the pre-pandemic, are the ones that will realize the most success.



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