1. From Waiters To Widgets: Navigating Industry Change
Prepared for
Les Roches School of Hospitality Management
11 November 2009

2. Overview About Strategy & Market Intelligence Order Channel Revolution
What’s Happening?
Business Impact
Examples and Lessons Learned

3. About Strategy
Define
Determine strategy based on actionable Market Intelligence
Align
Communicate strategy to your team and organize resources to deliver it
Execute
Put programs in place and manage measurable results over time

4. Considering Context What’s happening? How does it affect my business?
“In the second quarter, 28% of all handsets sold in the U.S. were smartphones”
What’s happening?
How does it affect my business?

5. What’s Happening? Consumer Demands Operational Challenges Speed
Convenience
Low Cost
Operational Challenges
Labor/Training
Food Costs
Depressed Demand
Activity
Average hours per day, civilian population
Weekdays
Weekends and holidays (2)
Total, eating and drinking
1.18
1.35
Eating and drinking
1.07
1.19
Travel related to eating and drinking
.10
.15
“Restaurant industry job growth will actually grow faster than the U.S. population, particularly in the key demographics of teens and young adults”

6. Every Segment Is Responding
Pizza
Fine Dining
QSR
Consumer Demands
Speed
Convenience
Low Cost
Operational Challenges
Labor/Training
Food Costs
Depressed Demand
Convenience
Fast Casual
Grocery
Casual

7. The Pizza Problem 50% of pizzas are ordered on Friday and Saturday
Major spikes occur on specific days
Superbowl Sunday is the single biggest sales day of the year
Several other holidays show similar spikes
Very difficult for the restaurant staff to manage these efficiently

8. Stage 1: Call Center Solution
Larger pizza chains took the ordering out of the restaurant
Call centers to handle volume peaks
Initial activities in early 1980s
Problems still remaining:
Labor costs
Economies of scale don’t work for smaller chains and independents

9. E-commerce to the Rescue
Why not use this order channel for pizzas too?

10. Stage 2: Automated Ordering
“Hockey stick” adoption of new order channels
Papa John’s launched online ordering nationwide in 2001
Others experimenting and testing locally
was turning point
Domino’s and Pizza Hut went nationwide
Mobile and text ordering launched in 2007
Widgets arrived in 2008; iphone apps in 2009
May 2008: Papa Johns recorded over a billion dollars in orders from their online/text ordering system since launch
Benefits
Lower cost transactions
Higher consumer ticket
Better consumer experience
Papajohn’s widgets in 2008

11. Other Ordering Options
Drive-thru
Over 65% of some QSR franchises’ business is through the drive-thru
QSRs experimenting with remote order-taking
Phone Ahead/Curbside
Casual restaurants increasingly experimenting with curbside
Fast casuals looking at “phone ahead” windows
Self-service Kiosk/Tabletop

12. Anytime, Any“where”

13. The Customer Experience
hours
2-3 minutes
1 second

14. How Does It Affect My Business?
Consumers buying in different contexts
Channel/consumer segment relationships
Branding and customer experience/loyalty
Operational linkage and monitoring
Etc…
Sales
Marketing
Operations IT
Finance HR
2-3 minutes in the drive thru
What choices must be made?

15. Customer Engagement
“The new App is not only a convenient way to order from Pizza Hut – it's an entertaining way to place your order. The App uses innovative iPhone and iPod touch features including the Multi-touch user interface and accelerometer to make ordering each individual menu item a fun and customized experience.”
A new wrinkle on the old “give ‘em a little theater” approach

16. Atari + Chuck E. Cheese = Uwink
“A social entertainment and dining experience
Order by touchscreen at the table
Games which facilitate interaction with other customers
Sports events on multiple large screens
Walls display art, themes, games and guests’ personalized pictures and graphics”
He’s selling the software to do this too…

17. A Different Approach…

18. Perspectives to Consider
Customers
Operations
E-commerce
Social Media (2.0)
Restaurant Technology
Order Channel Evolution
Consumer Technology
Entertainment/Gaming

19. Make No Assumptions

20. Finding Time for Strategy
How do you make sure strategic thinking happens?

21. In Summary Many new order channels have recently become available
Define
Determine strategy based on actionable Market Intelligence
Many new order channels have recently become available
Compelling customer experiences are a major opportunity
Align
Communicate strategy to your team and organize resources to deliver it
Execute
Put programs in place and manage measurable results over time

22. Thank You! Valerie Shuman Shuman Consulting Group, LLC
5141 Crain Street, Suite 300
Skokie, IL 60077 T: E:
Thank You!