Oct. 16, 2012
By Natasha Royer Coons, TeraNova Consulting Group Inc.
Each industry vertical has its own pace of technology innovation and risk-versus-reward criteria in regard to adoption. And specific to the fast casual sector, a few CEOs managing organizations from 30 stores to almost 600 stores, discussed with me their plans around technology adoption.
Don Fox, CEO of Firehouse Subs, David Wolfgram, CEO of Boudin and Pierre Panos, founder and CEO of Fresh To Order, answered questions including the following:
- How are you leveraging technology to drive differentiation, reduce costs and improve the customer experience for your restaurants?
- How did you make the critical decision when deciding to roll out a new technology in your restaurants?
They also discussed a range of technologies including digital signs, kiosks, tablet ordering, guest WiFi, mobile payments and social media as areas of innovation that were changing the landscape of how their businesses operated both in their brick-and-mortar environments as well as their virtual stores.
On the concept of change:
Overall, they believe technology innovation is inevitable and necessary for the industry. However, since margins in the business are notoriously razor thin, Fox says that vetting out anything that has fixed costs is deliberated upon very judiciously and must be something that adds value in the end on the consumer side.
"Concepts/operators have to be pro-change and pro-technology and it is based on this simple premise – if you told me my brand will be the same five or 10 years from now or even one year from now than from today, I would tell you the odds are high that I have a problem," he said. "It does not mean that we have to be the innovator. The framework must be vetted and deliberated. If the quantifiable data tests out than we will embrace the early adopter role."
This is clearly the case when FireHouse Subs took the early adopter position by deploying the Coca Cola Freestyle drink machine. According to Fox, the decision was heavily vetted and tested and the data was conclusive. As a result, Fox, who will share his insights on the CEO roundtable next week at Fast Casual Executive Summit, acted boldly and is still reaping the benefits.
David Wolfgram, CEO of Boudin Holdings Inc, the San Francisco-based parent company of Go Roma and Boudin Bakery, has a slightly different philosophy. Being a leading-edge technology pioneer requires high risk and a substantial amount of human and financial resources, and since technology is changing so rapidly in the fast casual industry, it's sometimes better to wait for the next-better version as opposed to blazing the trails as an early adopter. The early adopter could be stuck with sunk costs and a quickly obsolete system.
Digital menu boards/digital signage
Wolfgram, who will also speak about his experiences next week at the Fast Casual Executive Summit, said technology will be critical to long-term success of restaurants because it's expected from customers and has become a "have-to-have." Boudin has successfully rolled out a few pilots ranging from digital menu boards to tablet ordering for line busting. Specific to the digital menu boards, Wolfgram said they will derive ROI over time because of cost reduction in seasonal menu pricing, the ability to feature limited-time offers and new menu items and the ability to show calorie counts to comply with the new federal ruling. Boudin has also chosen to test the digital signs for branding. In its San Jose, Calif., store, one of the signs tells the Boudin story with a slideshow featuring historic photos and the baking process back-dropped against images of San Francisco where the company was founded.
This is sharply contrasted against the approach taken by Pierre Panos, founder and CEO of Alpharetta, Ga.–based Fresh To Order (F2O). Panos' Fresh To Order concept is what he would term "Fast-Fine" which features an elevated décor and enhanced service.
"Our service platform is high on guest interface over signage to deliver our messages. And with our décor more closely resembling that of quality dining, signage within our restaurant interiors is limited to those that are consistent with providing a 'Fast-Fine' ambiance," he said.
Panos describes "Fast-Fine" as the next evolution of fast casual which combines the quality of food typically found in fine casual dining with the operational platform and price points of fast casual. The food is delivered, the drinks are refilled, plates are cleared and protein is cooked upon order.
Although Fresh To Order may not be the type of concept where digital signs are the best solution, Panos has found another method of educating the clientele on the calorie count, fat and sodium content of their meals, as well as delivering a method for them to highly customize their order. At F2O, iPads are incorporated into the walls and surfaces at the front of the restaurant for either in-restaurant dining or take out. The iPads allow the customers to select the items, view nutritional information and choose items that fit within a certain dietary needs, such as high protein, low sodium or low fat. The client can check-out on the spot while enjoying high accuracy on the order, quick check-out times as well as information at their finger tips about their food selection.
On the subject of social media, the CEOs agreed that it was the modern word of mouth. Panos, for example, invested in a software program that tracks the immediate update of any digital content on the Internet involving F2O. An email comes to a select group of executives and via word recognition, any mention of the company on the Internet is turned into green and red spaces for positive or negative comments. This is a live feed of information and provides instant feedback. Panos said the investment allows the F2O team to manage its business more effectively and to know what guests are saying, so a response can be provided almost instantaneously. Panos calls this "Business at the Speed of Light." In addition, the store managers have smartphones and can immediately respond to reviews. They are empowered to respond directly and a response is expected under 24 hours.
Although most CEOs must be conservative when it comes to technology adoption, they also need to remain open to the many changes that could give them the competitive edge, enhanced customer experience and lower operational costs.
To learn more about technology innovation in Fast Casual, join TeraNova at the Brain Exchange at Fast Casual Executive Summit Oct. 21 to Oct. 23 in San Diego.
Look for subsequent articles and webinars called CEO Technology Roundtables from TeraNova Consulting Group. In the next article, learn more about CEO thought leadership around Mobile Payments and other technologies.
Natasha Royer Coons is the managing director of TeraNova, which provides simplified and fully managed telecommunications solutions to key verticals such as Fast Casual, Self Service Kiosk/Digital Signs and Retail. She has her MBA in International Business and a double major in Communications and East Asian studies
Cover photo: NEC