So far, there has been a 19% increase in customer use of delivery services and a 21% increase in the use of curbside pickup, motivated by customer anxieties regarding exposure and health.
The new world
The novel Covid-19 pandemic has caused dramatic changes to the food service industry. With health and safety concerns top of the mind, consumer behavior changed overnight from eating as a shared experience to eating to survive. Unfortunately, the quick-service restaurant (QSR) industry has been one of the hardest hit by the pandemic. A McKinsey estimate shows that approximately 130,000 of 650,000 restaurants in the United States will be permanently closed by next year, independent restaurants being some of the most vulnerable. However, for the restaurants that do manage to last throughout this period and into the next normal, the ideas of restaurant dining and service will remain altered beyond the pandemic.
So far, there has been a 19% increase in customer use of delivery services and a 21% increase in the use of curbside pickup, motivated by customer anxieties regarding exposure and health. These heightened concerns can be expected to last in the next normal, with delivery and pickup services still being heavily relied upon and restaurants still being held to heightened expectations regarding sanitation and cleanliness. These changes will generate higher costs for restaurants across the board; costs for labor, supplies and cleaning, new delivery services, and new contactless payment methods will all increase.
Because customers will be dining-in significantly less than they did before, restaurants’ interaction with them via digital channels will be crucial.
In the future of the QSR industry, one of the most pressing changes will have to be updated procedures when it comes to how restaurants operate safely, with the health of both customers and employees in mind. Restaurants will constantly have to update their sanitation methods, based on what proves to be working, and safety will always remain the ultimate priority.
Beyond cleanliness, the first concern QSRs will have to address in the next normal is re-energizing their customer bases. One way they might approach this is with a segmented process, wherein they target different groups of customers (loyal customers, loyal customers who chose other QSRs during the pandemic, first-time customers in the pandemic, and potential new customers) in different ways. To do this, however, QSRs will need to find ways to analyze customer behavior in real-time, in order to establish which customers fall into which groups.
Another significant change that the QSR industry will continue to experience in the next normal is the shift towards more delivery, pickup, and order ahead options. Restaurants will need to expand these options, and restaurants that were primarily eat-in experiences before Covid-19 will especially have to work on building their arsenal of contactless dining choices. Of course, these expansions will involve significant work in terms of digital channels for QSRs.
The transformations that the QSR industry will have to take on all involve advanced technological capabilities that they do not currently possess. First and foremost, customer engagement and personalization will involve understanding customers in real-time, and because customers will be dining-in significantly less than they did before, restaurants’ interaction with them via digital channels will be crucial. Additionally, advanced analytical capabilities will help with projections and contactless services, such as taking orders, facilitating pickups, and executing deliveries. In order for the QSR industry to operate smoothly in the next normal when customers will not be partaking in the traditional dining experience as much, their digital platforms will have to be revamped, to accommodate for customer preferences and behaviors.
Strategies that can help win customers in 2021
Offer contactless drive-thru and curbside pickup via food delivery services, at locations that are currently closed to interior customer traffic.
Monitor Queue Lengths
Provide continuously updated information via website and mobile about queue lengths, wait time for pickup, alternate locations for shorter lines, etc.
Know customer location to send timely information about where to pick up, where to park, how to add to an existing order, when to bring out orders.
Build trust by sharing information such as the most popular meals that other people living in the same area have been ordering.
Customize the menu displayed in drive-thrus or on the website/mobile app for each visitor, based on highly accurate predictive models.
Send new loyalty reward or coupon notifications when customers breach the geo-fences of restaurants or locations.