Feb. 6, 2015 | by Nicole Troxell
Is Panera 2.0 starting to pay off?

Panera will report on its Q4 and FY 2014 earnings on Feb. 12, and the question on everyone's mind is, "How's that 2.0 thing going?" We sat down with Panera's Executive Vice President - Chief Transformation and Growth Officer Blaine Hurst for some background on the initiative and an update.

Panera 2.0, a suite of technology updates aimed and improving the customer experience, started rolling out in 2014. What prompted the sweeping overhaul? 

As Hurst considered the biggest obstacles to Panera's growth, one issue kept surfacing for him: waiting. Nobody likes to wait in line, even for their favorite meal.

Lines – we've all experienced waiting in lines at the post office, the doctor's office, airports and more. Not coincidentally, these are also some of the same industries that have implemented self-service kiosks in recent years. Perhaps taking a cue from the recent successes kiosks have offered for customer service, Panera Bread decided to follow the same path.

All about access

Hurst recognized this and set out to help Panera eliminate this 'unpleasant experience.'

Improving access to the Panera experience was the obvious first step, so the company implemented web, mobile and kiosk solutions as well as redesigned parts of its kitchens to reduce friction for guests.

The result is Panera 2.0, a modern, technology sophisticated fast casual concept in the works since 2012. Ordering kiosks were the first step in modernizing Panera. Born out of improving access to ordering and payment, the kiosks number more than 700 in about 100 cafes.

Customers need to feel comfortable with the unfamiliar

Hurst and his team knew Panera's kiosks needed to be simple and easy to use, so they examined demographics and what devices people are most comfortable using. They settled on an iPad kiosk for its level of familiarity with the public, which allows the kiosks to be both friendly and approachable.

Panera considered that many guests would already be familiar with an iPad, but the company also considered customers who are still reluctant to use such technology and designed an intuitive interface that is intended to ease use of the device even if you aren't familiar with the product.

In designing the kiosk to provide a complete self-service experience, Hurst looked at how many clicks customers input to navigate an order to insure a more efficient route to the process. The kiosk software also brings up a customer's order history and favorites, and much like a host or hostess, they ask if a customer is dining in or carrying out. For dine-in orders, the kiosks instruct users to grab a pager-like device, input a number and grab a drink cup, all without the assistance of staff.

Happy workers, happier guests

But how does Panera 2.0 impact Panera employees? If anything, Hurst says, they've improved the quality of the work environment and the changes in 2.0 shops have produced more jobs as Panera employees at these locations now provide table service.

Any concept that insures your associates and teammates feel good is critical, Hurst says. It's not only customers who experience stress from waiting in lines; employees do too. When lines are backed up, there's not a whole lot of warmth between associates and guests, Hurst pointed out, so the kiosks are creating opportunities for improved interaction, which takes the stress off employees and creates a better work environment.

Ask not what your restaurant can do for kiosks, but what kiosks can do for your restaurant

For Hurst, that doesn't indicate kiosks are for every restaurant, "It’s going to be different for every restaurant. A kiosk is not the endgame. We see it as a way to enhance the guest experience, so if a kiosk fits in that for you, that’s what you should do. It's not a box to check off, but to enhance the in-store ordering experience. Also, the argument posed is that everyone will bring their own device and order at a table, but the kiosk takes very little commitment as a consumer. Downloading an app is higher level of commitment. A kiosk is still faster than loading an app on your phone and ordering from a table."

Though demographics indicate the kiosks tend to be skewed more toward use by the Millennial crowd and those in living in geographic areas that were early adopters of technology, more retirees are seen using them because increasingly, they are buying their own iPads and iPhones.

As more industries move to the technological forefront, customers will start to expect a friction free experience that keeps up with the times.

The bottom line

On whether the kiosks and 2.0 stores improve sales, Hurst said, "We're encouraged, or we wouldn’t still be doing it. The customers like that the kiosks are fully integrated with Apple Pay, contain full nutritionals and allow them to customize sandwiches."

Panera is expected to address sales from 2.0 stores in an earnings call scheduled for Thursday, February 12, 2015, at 7:30 am CDT where the company will address fourth quarter and full year 2014 earnings. 

Topics: Customer Service / Experience, Display Technology, Franchising & Growth, Marketing / Branding / Promotion, Operations Management

Nicole Troxell
Nicole’s work has appeared in business, education, technical, and travel publications. She is currently the editor of QSRweb.com and PizzaMarketplace.com. wwwView Nicole Troxell's profile on LinkedIn

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