As we approach mid-May, it’s been nearly a month and a half since most restaurants in the country either closed their doors or had their sales slump over 50% on average. A tough pill to swallow indeed. As a restaurant supplier, we got to see firsthand a glimpse into the next 5 years of restaurant sales earlier than we all had anticipated. While this devastating and historic event continues to linger in the background, restaurants are looking to reopen as state and government restrictions loosen. Below is a definitive guide on, “How Your Restaurant Can Reopen with Massive Success Amid COVID-19”.
First of all, if you embraced technology platforms such as online ordering for the first time during the pandemic, hats off to you. You will forever be better for it. With that said, if you are using GrubHub, Postmates, DoorDash, or UBER Eats, you better 86 that sh*t from your recipe book ASAP. Coughing up 15-35% for delivery isn’t sustainable, get rid of it.
As consumers and lawmakers have become alarmingly health conscious, we anticipate restaurants sales will continue to suffer for several months. There’s a lot of challenges ahead regarding occupancy restrictions, being forced to limit your floor plan for social distancing, and supply chain headaches like food shortages. All of that said, you need to look at this like an opportunity to turn a new leaf.
It’s time to get creative and try things you wouldn’t have considered in the past. Your restaurant needs to adapt to the demand of your clients which requires your business become an omni-channel provider, mastering both online and dine-in sales processes.
Cloud Point-of-Sale (POS)
It’s time to upgrade, dude. Your 1999 MICROS technology is not going to cut it in today’s world. We fully recognize that the majority of restaurants don’t have the budget to invest in a new POS system right now. That said, you need to at least know your options and consider even financing a system. Schedule a demo, get some quotes, do your research. The faster you upgrade, the sooner you can start running a truly better business. Legacy systems are not only highly susceptible to chargebacks and fraud, they prevent you from meeting the standards consumers will come to expect when you reopen.
As much as restaurants hate to talk about payment processing, your options have never been better. Newer tech like table-side ordering or scan-to-pay options can result in a contactless check out for your dine-in customers. Consumers will start to be more conscious of which restaurants make them feel safe, and it’s important you are on that list.
Your payment processor should also have options for Cash Discounting programs that can inject serious cash flow into your business. These programs allow you to markup your inventory items 4% on your POS when customers pay with plastic. An average full-service restaurant can eliminate up to 85% of their total monthly processing fees. You are still required to pay your processing fees on your tips to remain in compliance with the card brands. Below is a sample Credit/Debit card receipt vs. a Cash Receipt. To the customer, it’s just a price increase on the receipt, NOT a credit card fee. True cash discount programs will become mainstream over the next several years. There’s no harm in being early to the party.
If you still aren’t doing it, do it. You need to have a native solution that integrates to your POS. Most modern POS systems offer either free online ordering or commission-free programs for a nominal monthly software fee. It should be a streamlined process with orders populating on both your POS and printing to the kitchen/bar. Avoid commission-based programs at all cost such as 3rd party delivery companies.
3rd party delivery is not sustainable with commissions ranging from 15-35% or more. Not to mention, you will be working twice as hard to feed strangers while your profits continue to shrink. The most important reason to offer Online Ordering isn’t just convenience to customers, it’s to build your marketing funnel and start owning your data. Here’s a list of things you want to be sure to focus on when building out your eCommerce store:
- Branding and pictures (the more, the better)
- Clear instructions (consumers need clear instruction to feel confident in placing an order. For example, asking for vehicle information for contactless pickup and suggesting they call upon arrival. Include your phone number in the confirmation email)
- Customer Data (collecting customer records such as emails, phone numbers, and purchase history is critical to your marketing success)
- Contact information (it sounds silly but, having your phone number, location, email, and even social media and website links are very important)
- Operational information (Hours of operation, food prep times for accurate pickup times, and anything else you can think of)
Know the Rules
All restaurants need to be rethinking their overall dining rooms. For example, if you live in a city or state where there will be occupancy restrictions, you really need to know the rules and regulations for your restaurant. Some cities are lifting permits pertaining to delivery and/or easing permit restrictions on outdoor dining services. If you are being forced to eliminate 40% of dine-in tables and chairs, can you get any of that back by moving it outside? Do you have enough demand to hire a full-time delivery driver? Again, it’s time to get creative. The weather is changing, and people want to be outside. If you didn’t offer patio or outside dining before, be sure to consider this option and don’t forget about events or potential entertainment opportunities such as booking local bands.
Just because you’ve never offered reservations doesn’t mean you shouldn’t consider them for the future. While we can’t predict consumer behavior, we do believe restaurant sales will increase during historically off times. For example, consumers might want to frequent their favorite restaurant in between lunch and dinner in hopes of less traffic. Reservation services can help you book tables during these times (10-11am, 2-5pm, 8-11pm). You should consider offering specific time blocks in which guests can book a table. This will help you predict demand and increase your marketing funnel as you collect more customer data.
Consumers have perfectly demonstrated their willingness to adapt during the pandemic with online ordering sales skyrocketing. Many restaurants shifted to selling packaged alcoholic beverages and electronic gift cards, suppliers such as breweries started making hand-sanitizers, and we even saw a client of ours selling Artisan Soaps using rendered bacon fat.
If anything, the pandemic is forcing more innovation and there’s never been a better time to think outside the box. Expand your product mix but, don’t go too crazy. You want to ensure you are moving as much product as possible as you struggle to predict demand. Get creative with specials while still focusing your marketing efforts on higher margin items. For drinking establishments, your sales have likely been impacted the most. Consider putting together a list of higher margin specialty cocktails for when you reopen. For example, come up with a small list of 6 cocktails and price them anywhere from $8-$15 depending on your customer demographic. Print some table tents and run some employee contests to drive up profits.
Own Your Data
All these new technologies present unlimited opportunities to ramp up your marketing efforts like never before. If you accept online orders, reservations, or take payments table-side, you should be capturing rich customer data with every transaction. All of this data should be available through your POS system.
Start using this data to create audiences on Facebook and Instagram and ramp up your Email or SMS text marketing (or get started already). Launch customer contests on social media to capture more data and produce steady but quality content to keep customers engaged (food pics sell).
Our average clients were capturing over 500 emails per month from online ordering systems alone during the pandemic. As overall sales volume increases with dining rooms opening, that number should be even higher. Just imagine having over 6,000 reachable contacts over the next year of business. It would certainly make promoting the band a hell of a lot easier.
Your marketing funnel is so incredibly important to your success. When was the last time you ordered from Dominos? If it was within the last 12 month, you likely can search your email for promos and coupons from them. You need to be replicating these same processes to own your digital commerce strategy. Get serious about paid advertising on social media. You don’t need to spend thousands of dollars, you just need enough funds to be consistently reaching new customers ($150-$350 per month).
Finally, use common sense and be smart about your reopening. If there’s restrictions on your occupancy, abide by them. You should be mastering your online and offline processes for the long-term. Quick short-term gains like opening the floodgates to your thirsty clientele could result in lasting negative impacts on your business if you end up on the news. Don’t be that guy/girl. With the right approach and attitude, you can make the most of a bad situation and set your business up to thrive like never before.