Enhancing customer experience through digital innovation
Market Realist has discussed digital strategies for several restaurant chains, which are all geared towards enhancing customer experience and increasing sales for the company. For example, recently McDonald’s (MCD) adopted Apple Pay to enable quicker payments using an iPhone.
Panera 2.0 is a blanket strategy to enhance customer experience using digital innovation. The idea is to cut wait time by giving customers different ways of ordering. For example, customers can use phone apps to order food and specify a pick-up time, and then simply pick up the order without waiting in line. Customers can also use the app to order while seated at a table within Panera Café, and have the food delivered.
Fast lane kiosks
The fast lane kiosks in Panera give customers the opportunity to interact with the ordering system. Customers place their order using the tablet-like machine above. Once the food is ready, employees deliver it to the table. Both the Panera app and the kiosk let customers fully customize their order. According to the company, half of its customers customize their orders in some way.
It appears that Panera is also hoping to accelerate adoption of its MyPanera Loyalty program, which would make the digital ordering process quicker. The company can then use this platform to push a promotion similar to what Dunkin’ Brands (DNKN) offers.
As of the third quarter, Panera has upgraded 43 restaurants to offer these technological advancements to its customers.
Similar initiatives in the industry
To learn about similar initiatives in the industry, read McDonald’s management initiatives for 3Q14 or Why Chili’s is changing the way we order food. Brinker International (EAT) owns Chili’s. You may also consider a broader restaurant portfolio like exchange-traded fund (or ETF) the Consumer Discretionary Select Sector SPDR Fund (XLY).
Next, let’s look at an important revenue driver, unit growth, for Panera Bread (PNRA) during the quarter.