COVID-19 has brought challenges to the restaurant industry that no one could have predicted, but it’s also created opportunities. While some restaurants quickly pivoted to online ordering and expanded delivery radiuses, others proactively planned for the moment when they’d be able to open their doors again.
Consumer outlooks and behaviors have also shifted during this time. Interest in health and safety is at an all-time high, and guest comfort with traditional dining has changed. We sat down with two restaurateurs who adopted two different dining concepts in response to COVID-19 to discuss what the future of dining looks like.
Key takeaways
- The future is online, from delivery platforms to digital hospitality
- Communication and transparency is key—the more vulnerable, the better
- Higher margins must be achieved through new and innovative outlets
Shawn Walchef is the founder of Cali BBQ Media and the proud owner of Cali Comfort BBQ near San Diego. Gianluca Pesce is the Director of Marketing for Yolk, a 15-location breakfast chain with locations in Chicago, Indianapolis, Dallas, Fort Worth, and Boca Raton.
“Coronavirus has attacked the heart of hospitality. We love people. I mean, we love people,” said Walchef. “We open up our business—it’s a house. We want people to come in, enjoy the experience.” And with razor-thin profit margins already plaguing the restaurant industry, COVID pushed these establishments even further into the red.
“What we figured out since the Coronavirus is what we knew before the Coronavirus—the full-service restaurant model—is broken,” said Walchef. “For us to be profitable, we have to change the way people experience our barbecue.” Ultimately, the pandemic has forced restaurants to go back to the drawing board and collectively bring change to the industry.
Diner feedback
In our 2020 Yelp Diner Survey, 46% said they would feel comfortable eating out within a month of the loosening of government regulations—with 19% saying they’d eat out immediately—while about 53% of diners say they would prefer to wait a month or longer.
We also asked diners how concerned they are—from a health perspective—on an array of common interactions that take place while dining out. The following are the responses of surveyed diners who responded “extremely concerned or very concerned” about certain aspects of the dining experience:
- Sharing a large, family-style table with multiple parties: 70.6%
- Holding a reusable (e.g., laminated) menu: 43.4%
- Sitting in a booth with another party behind you: 42.8%
- Holding a pager to wait for your table: 38.7%
- Sitting at a private table with another party nearby: 36.6%
- Interacting with a touchscreen for your payment (e.g., adding a tip, signing a screen): 34.6%
- Using pen and paper for your payment: 33.5%
With concerns and expectations at an all-time high, restaurants had to quickly analyze all aspects of their business and determine what could change and what needed to change.
Where and how to pivot
Restaurants were forced into fight-or-flight mode, and those that were able to keep their doors open in some capacity quickly pivoted and adapted their operations, physical layouts, technology, and more.
Physical onsite changes
With takeout being the only option in the beginning, restaurants had to alter their physical layouts. At Cali Comfort BBQ, the entire dining room is now used to expedite getting orders out of the kitchen. “We moved our point of sale system to the front of our doors so that customers can walk up but never walk inside our business,” said Walchef. “We use a different window as the pick-up window, and we have the delivery drivers come to a different side of the restaurant entirely.” These simple distinctions help keep orders flowing smoothly and avoid a sense of competition between customers waiting for carryout and delivery orders.
Walchef also dramatically scaled back his menu: by 90%. With such tight margins, restaurants can’t afford to carry extra inventory in hopes that certain dishes will attract customers, so they have to focus on the most popular options. A silver lining emerged though—serving family-style meals and offering their famous cocktails to-go—they quickly surpassed their average check size, which went from $30 to $56. “At one point, we were selling more alcohol per month than we did as a full-service sports bar showing NFL Sunday Ticket or Fight Night. We did that by asking our customers what they wanted—like our famous punch bowls—and then delivered on that.”
Photo from Jose V. on Yelp
Health and safety protocols also became more important than ever. Yolk’s Pesce immediately recognized that physical menus were a thing of the past. “Right away on every table, you’re going to see the QR code that you scan, and it brings you directly to our menu on our website. It’s a smart thing to do anyway because then you’re driving people to your website where they can browse, look at other things that you’re offering, and see other things that you’re doing while they’re waiting for their food, whereas, prior to that, they may have not taken that extra step to go to your website.”
Thorough sanitization has become a primary focus and necessity, and guests want to see it happening in front of them to feel confident in their dining-out experience. When diners were asked what would make them more confident to dine out sooner, the top three responses were social distancing, frequent use of disinfectant, and the availability of hand sanitizer.
“People do not want to be sitting close to each other. They want to see frequent use of disinfectant in high-traffic areas,” said Cliff Cate, Yelp’s Head of Restaurant Success. “What I have seen and what we’ve been told is—don’t be afraid to do that in public. Don’t wipe down menus behind the scenes. You can be doing it out in front of diners. This is what they’re expecting, and these are the types of things that are going to give them more confidence.”
Delivery partners
Takeout and delivery were always complementary to the dine-in experience, but they have now been thrust to the forefront. Restaurants are testing the waters with an expanded group of delivery partners, giving them more reach to attract new customers while also satisfying those who would be regularly dining in sans-COVID.
You should also evaluate the flexibility of each platform to see what types of promotions and offers can be created. “A lot of these companies like DoorDash and UberEats offer ways to market your restaurant and [put together] any type of promotion, so we really shifted our marketing dollars there over the past few months,” said Pesce. “It’s been a great success. On DoorDash specifically, we saw a 400% increase in ordering.” On UberEats, they designed a BOGO offer and saw even more success when promoting it on social media.
Additionally, Walchef recommends taking professional-grade photos and videos of your food and updating those on the delivery platform sites—in addition to your website, social media, and other sites like Yelp. “Take photos of stuff you haven’t before, and start testing. Figure out what works and what doesn’t work, but that’s content that you’re going to use forever.”
Remember that with expansion to new technology comes the need for due diligence. Pay close attention to margins, profitability, volume, and overall success with each platform, and make adjustments accordingly.
Communication and transparency
Lift the curtain, and give a behind-the-scenes look—what’s new, what’s changed, what’s stayed the same? This can be intimidating at first, but it’s crucial right now because consumers are curious about what everything looks like, curious about what to expect.
“One of the most powerful things I’ve seen during the Coronavirus is the competitive advantage that independent restaurant owners have when they’re willing to be vulnerable,” said Walchef. “Willing to say, ‘I don’t have the answers, but this is where we are today.’ You don’t have to have all the answers.”
The key lies in being honest and transparent. It’s truly the time of the good, the bad, and the ugly—and believe it or not, everyone wants to see all sides.
“Our restaurant’s unrecognizable. It’s literally like a war zone,” said Walchef. “We’re a mini factory now, but there are chairs turned upside down, floor to ceiling to-go boxes. We’re using the front-of-the-house dining space to expedite getting orders out of the kitchen.
“Instead of not showing that, we show that and that allows people to get an idea of what it’s like to operate a digital barbecue company. We don’t know how to do it, but we’re trying to figure it out along the way. Because of that, our customers are part of the journey, and they want to support us more.”
Plus, with that type of transparency comes extra media coverage and marketing value. “So many successful operators that I know throughout the country, they’re the ones that are leveraging, not just the cellphone, their social pages, but that’s also getting them local news coverage. That’s also getting them extra coverage because people want to know what the experience is,” said Walchef.
Community
Staying connected with your community is of the utmost importance. Know who your audience is, find out where they are engaging, and figure out how to deliver that information. Once you’ve determined your message and delivery, ensure it’s consistent throughout.
“In terms of brand management, especially when you have a multi-unit chain, I can’t stress enough how important consistency is, that you’re providing the right information,” said Pesce. “We have locations in different states with all different guidelines that require us to do different things, so updating that information for each individual location is so important. The more information that you can provide to your customers, the easier it is for them to make the decision to order from you or eventually come back and dine in with you.”
Walchef added that now may even be the time to try something new. “Do what’s in your heart and what you know you’ve wanted to do. There’s been things that you’ve wanted to do to your business, and now you have the perfect cover and the perfect test, which is COVID. We’ve had many people who were not happy when we removed hamburgers from our menu, who weren’t happy when we removed most of all of the other things that they’d come to love, but when we’re open, honest, and explain to them that this is what we have to do in this time, people are more understanding than we give them credit for.
“Be honest, be open, be vulnerable, and use as many social platforms to get that message out, and you’ll be surprised at how much people are willing to see that there’s a heart behind the brand.”
And don’t be afraid to look to others for inspiration and motivation—everyone is trying to figure out how to forge ahead together. Compare your various sites and pages to others in your industry to see how they’re communicating with their customers and what features they’re using.
Digital hospitality and social media
In the old world, hospitality was about training your host to create a certain environment when first greeting a guest, or it was coaching your server to make sure they approached a table promptly or dealt with an angry customer a certain way. But we’re now shifting to the age of digital hospitality.
“Hospitality is literally why we love doing what we do. We become part of people’s families. We become part of those stories,” said Walchef. And now with the current times, that value and dedication to hospitality has to happen in-person and online. “There’s never been a point in time in human history where there’s a convergence of both of those. Those things are happening all around us, whether we choose to admit it or not. Amazon Prime, the fact that we’re all on Netflix, and there’s no more Blockbuster. The fact that I can’t take my son to Toys“R”Us, I mean, these things are happening, and for us not to acknowledge that it’s going to happen in the food space and beverage space would be naïve.”
This especially takes form when it comes to maintaining an active presence online in the same way you would pay attention to a guest walking into your restaurant. Walchef describes using a “Please seat yourself” sign in the lobby.
“That sign is the experience when someone walks into the restaurant, and no one is there to greet them. What happens? You feel not welcome, you feel ignored. Early on, about two years into running our restaurant, we decided that we’re not going to use that sign anymore. We’re going to pay to have a host always at the front of the restaurant to always welcome people when they come in, to always answer the phone, to smile, to do all of the things to give five-star hospitality. Five-star hospitality costs a lot of labor, but what’s happening on the digital side is: If you ignore people online, if somebody writes a review and you don’t respond to that review, that’s just the same as ignoring somebody who walks into your restaurant.”
The same goes for essentially any online interaction with your business. “When somebody sends us a tweet, we answer the tweet,” said Walchef. “We can send them a direct link to order online, to order catering. If we engage with them—that one-on-one engagement—we get a brand ambassador because how many other restaurant owners are actually going to respond to a direct message on Instagram when someone says, ‘Oh, I loved your ribs.’ Not only do I thank them back, but I’ll repost their rib photo. It’s just a small thank you. That’s user-generated content. It’s the thing that I’m most excited about because it’s the thing that will give us the biggest competitive advantage moving forward.”
Pesce added: “I made a decision to engage with our followers on the same schedule [as pre-COVID], which was every day. I really think that’s been a success for us because people want to see that you are sanitizing and are wondering: ‘What are you guys doing in the restaurant to make it safe for us to come back?’ Customers want to see that, and I want it to project some sense of normalcy in this crazy time.”
Scaling and expanding with technology
Margins are paper-thin even in “normal” times at 100% capacity, so especially in these times, restaurateurs have to identify outlets that can be created or adjusted to achieve higher margins. Traditional restaurant marketing efforts tend to focus on attracting diners from as far as possible. Now, the focus is shifting: How can restaurants get their product out the door to as many people as possible?
“What can we do to change? What can we focus on that will continue into the future? How do we get our product out to more parts of our community?” said Walchef. “That’s digital. There’s never been a more exciting time for me personally in the last 12 years to know that, as a small independent operator, I have a chance to scale like I never had before. I have a competitive advantage to scale because of the smartphone.”
With the unfortunate reality of fewer employees and what feels like less time in the day, technology can help your business run smoother, more efficiently, and give you more reach.
Pesce described some of his findings: “One of the things we’re investing in right now to help operationally and create a better experience is Cuboh, which allows you to maximize your online sales. You can be on every single third-party platform, and it brings everything into one tablet, prints it on one printer, and is laid out perfectly for your kitchen and hosts to read. They also offer a POS integration. It really does simple things, especially for your front-of-house, and it can also reduce labor when labor’s such a tough cost right now.”
Pesce also described his experience with Yelp Waitlist, which they used pre-COVID. “It’s been such a great tool, and now there’s a QR code. Before [guests] actually enter the restaurant, they see a sign where they can scan [the code] and get right on the waitlist, not even having to talk to anyone. Then they get the text on their phone. They don’t get a pager. It’s all on their own personal device.”
Walchef added his technology recommendations: “We use Otter for three third-party deliveries,” which is described as a command center for delivery business. “We also put on an auto-attendant for our phone and drove people to the website. Since we started doing that, we’ve been able to get more food out of the kitchen. We’ve been able to serve more families, to the point where on Father’s Day, we sold out of barbecue before we opened the restaurant. Literally, digitally, we sold out of barbecue and before, that was just unheard of.
“Yelp Connect is also probably one of my favorite new features because it allows us to push content to people who are already following our restaurant. It allows us to publish photos, menu updates, text content, a local deal—and we get analytics to back up what that reach was.”
Whether you’re reopening your doors or reinventing your business, it’s important to spread the word with your community. Everything from safety precautions to step-by-step instructions for picking up an order can help convert a new customer into a loyal fan. The more information that you can provide, the easier it is for diners to make the decision to order from you and eventually come back to dine in with you.
“You’ve worked so hard to build [your restaurant] to a certain point, it’s that creativity and that hospitality that’s going to give you the competitive advantage in the world moving forward because Amazon can’t do what we do. Walmart can’t do what we do. They need independent restaurants to provide for the community because we’re the voice of the village,” Walchef said.
Pesce concluded: “It’s all about adapting, and not every tool we’ve talked about is going to be right for every single business out there, but you have to try and be resourceful and adapt in a way that is convergent with how the world is trending right now—and that’s on a more digital path.”
To hear more of the discussion, listen here.
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