The Restaurant is Dead – Long Live the Restaurant!
The arrival of the pandemic shifted the restaurant industry profoundly – and perhaps forever. More than 70,000 restaurants across the U.S. have permanently closed, according to Yelp, from historic mom-and-pop and fast casual concepts to Michelin-starred eateries. With decades of experience working with restaurant operators, we know many are struggling. However, new trends have already begun to emerge, highlighting how restaurants are shifting for the post-pandemic world. Businesses that are ready to revamp the customer experience to meet the trends below — and communicate effectively about it — are the ones that will succeed.
After experiencing the convenience of delivery and digital ordering since the start of pandemic, customers will continue to favor to-go and delivery options. Delivery is expected to grow 40% in the coming year, and at a compound rate of at least 22% annually for the next four years. Curbside pick-up has become especially attractive to both operators and customers. It is a low-cost way for restaurants without drive-through capabilities to launch an off-premise channel, and it provides customers with convenience at no extra cost per order.
Ghost kitchens and digital brands have also gained popularity. Bloomin Brands created a virtual brand called Tender Shack; Pizza Factory started one, too. The virtual restaurant space is expected to be the next growth segment within the industry, offering little overhead and the opportunity to expand appetites and the customer experience relatively easily.
Ambiance is still critical
During the pandemic, many restaurants received permits to open outdoor dining that resembled a more European atmosphere. As a result, many continue to expand their al fresco areas. Where customers feel safe to gather and socialize while enjoying the ambiance and flavors of a well-designed space and well-executed menu, expect them to come flocking back.
It’s also important for restaurant operators to up their game when it comes to human interaction, as nearly 64% of customers say that they would choose to sit in a restaurant with traditional table service versus an experience with a tablet or smartphone ordering.
With these shifts come significant changes to how restaurants must market their unique value proposition and communicate with customers. Savvy restaurants are taking the time during this “pause” in business as usual to reassess their branding, internal and external communications, and positioning. This is the key moment for operators to gain a better understanding of the changes they need to make and the steps they need to execute to make them. That will mean the difference between just surviving the pandemic to thriving as society comes out of it.