Restaurants, C-Stores Prep For Omnichannel Future
Some convenience stores and restaurants have seen their revenues dented by 60 percent or more in recent months, Paytronix CEO Andrew Robbins told Karen Webster. But he said what’s really remarkable is how consistently hopeful, engaged and optimistic businesses are about what comes next.
“It was just amazing that the sentiment I am hearing is: ‘If this is the toughest thing the world can throw at us, we can beat it,’” Robbins said. “That, I think, is where they are all aligned — a positive feeling that the future’s going to be better, that they are winning, that they can innovate, and the innovations are working.”
And more than talking the innovation talk, Webster and Robbins agreed, entrepreneurs are walking the innovation walk — in an incredible variety of ways.
There’s the New York restaurateur who’s traded serving power lunches and dinners to Financial District players for selling a daily assortment of desserts to her large Instagram following. And there’s Boston’s Kowloon restaurant, which has transformed its iconic sit-down location into a carhop eatery and drive-in movie theater.
Or on the simpler side of low-tech innovations, there’s the convenience store proprietor who’s installed plastic sheet dispensers so customers can open the shop’s door without actually touching the doorknob.
Robbins said the will to innovate is there, and that brings hope along with it. Hope, and a desire to keep changing as the landscape — and customers’ needs — keep shifting.
Changes Will Always Be A Work In Progress
But Robbins added that when it comes to the great remaking of the restaurant and convenience segment, innovation is an ongoing process.
For example, the outdoor dining that greatly buttressed restaurant reopenings in the spring and summer will likely shift in northern climates in the next few weeks as fall weather sets in. That’s going to require a whole host of innovative changes as on-site restaurant dining moves back indoors.
Robbins said solutions to that will vary from low-tech — like creative seating arrangements — to more involved initiatives. For instance, one Paytronix restaurant partner is trying to redo flooring and ventilation systems to rapidly draw down all air in the establishment to the ground, where embedded UV lights will annihilate the virus.
But from the mundane to the vaguely science-fictional, Paytronix is seeing firms realize that any enhancements will likely be connected to a digitized and online component of the consumer’s experience. Robbins said what clients are asking is how to make their digital order flow match up with the in-house experience, or how to tweak curbside delivery to do more for consumers.
“They want to know how to make the curbside experience special in some way and go over the top in bringing some unique flavor to that experience,” he said.
Are Delivery Aggregators Worth It?
Robbins said Paytronix’s restaurant clients are also re-evaluating how much of the experience they want to own and how much they’re willing to share with third-party aggregators.
He said restaurateurs were already having doubts about third-party delivery apps pre-pandemic. Those firms offer delivery capabilities, but it comes at a high price — big commission fees and a system that pushes restaurants from the center of the relationship with customers. After all, it’s the third-party aggregators that actually bring consumers the food.
“And then when COVID hit, we were all so happy that delivery existed because it solved a problem,” Robbins said. “I think everybody [temporarily] forgave the existing issues, or at least brushed them aside.”
But those issues are starting to reappear again, he said, with some state legislatures passing regulations on how much third parties can charge. Media reports also indicate that consumers are paying higher costs as merchants raise prices to make up for revenue lost to the aggregators.
Moreover, aggregators are picking up power. Robbins noted that last month marked the first time that third-party sites had more net orders than restaurants’ own websites did.
Such developments have restaurateurs and convenience store owners getting more aggressive about holding onto their customer bases.
“Some of the savvy restaurants are buying ads for their own name to make sure that when the customer does search, their own URL ends up on top,” Robbins said. “And they are working overtime to figure out what they can do to make ordering in their channels more appealing, so that their customers want to stick with them — not the aggregators.”
Because while COVID-19 is temporary, the digitization of restaurant ordering is looking increasingly permanent — which means competing in digital channels will always be relevant, he said.
Preparing For An Uncertain Future
Robbins said what comes next is for the most part a matter of divided opinion among Paytronix merchants.
Some are fairly certain that changes are permanent when it comes to consumers ordering digitally and actually eating at home. But others believe consumers are still hungry to dine out and will largely go back to normal when they get the all-clear sign.
But Robbins said most restaurateurs are coming around to the idea that it won’t be an either/or, but both. He said the secret to future success will come from offering both to customers, allowing each party to pick the path that most appeals to it.
“A piece of this going forward will be a ‘choose your own adventure,’ [which] a restaurant and convenience store is going to have to create,” Robbins said. “That might mean ordering from home with a third-party aggregator or from the site, or from an app and picking up in a drive-thru or parked in a parking lot. [Companies] have got to make that matrix work so that the customer can choose whatever adventure they’re feeling like that day.”