Consumer-focused industries need to keep up with the increasing integration of technology, and the restaurant industry is no exception – specifically, the quick-service food sector. From digital menu boards to online ordering, technology’s reach in this industry is rapidly expanding. Panera Bread is one company that’s made a technological commitment to the guest experience and done so in an exceptional way. Not even three years after announcing its tech-focused initiative, the company is already seeing returns on its investment. The restaurant recently shared increasing fourth quarter earnings resulting from its digital efforts at its company-owned stores.
In 2014, Panera introduced its plans for Panera 2.0, described by CEO Ron Shaich as “an investment in the customer enabled by technology and powered by operational excellence.” While technology spearheads the initiative, the ultimate goal is to improve the customer experience. Panera has been adding technology that streamlines the dining experience making it easier to order ahead through your mobile device, adding kiosks for in-store dining convenience, and adding Apple pay for an expedited payment process. It’s an operation that aims to improve accuracy, convenience, and speed.
A New Way To Order
With a number of ways to place an order, Panera 2.0 makes it easy to get your food. Self-service kiosks are now in place alongside cashier stations to reduce wait times. Using Panera’s online ordering form or mobile app, guests can avoid lines by picking up their food at a predetermined date and time or dining in-store and having their meal delivered directly to their table. The kiosks, web platform, and mobile app all allow guests to save customizations, past orders, and “favorite” meals for easy future ordering.
Striving For Operational Success
In addition to the customer-facing technology, Panera invested in new equipment and systems to improve internal operations. It has installed display systems in the kitchens, auto-load balancing, centralized phone systems, customer-facing order displays at checkout, and an expediter station, where an associate confirms and verifies every order before it is delivered to the customer. All of this contributes to improved order accuracy, and thus, a better customer experience. As with any technology or system upgrade, Panera developed a comprehensive training program to ensure associates are properly equipped to use these new processes and systems effectively. The online ordering and apps also enable Panera to track and monitor customer analytics, including order history and frequency, which aids in product planning.
By the end of 2016, Panera had converted 626 restaurants to Panera 2.0. Blaine Hurst, executive vice president and chief transformation and growth officer for Panera, shared that 18% of orders arrive through digital platforms and the chain received more than 135,000 digital orders daily. The company is serving approximately 10 million people per week. Their revenue is increasing, and now Panera’s executives are looking to add even more stores in the next year. On April 5, 2017, JAB BV agreed to acquire Panera for $7.5 billion. JAB BV is paying a premium of approximately 20% to Panera’s all-time high closing stock price as of that same date because of the value Panera has created. Panera 2.0 has paid great dividend to Panera shareholders and customers. Said Hurst, “Panera 2.0 is an integrated experience that meets the differentiated needs of ‘to go’ and ‘eat in’ customers, so they don’t bump into each other. It provides new mechanisms for ordering, payment, food production, and, ultimately, consumption. We took a totally integrated approach, and believe what we are providing is a truly enhanced guest experience.” We’d have to agree!
“Panera Bread, Newington, CT” by Mike Mozart is licensed under CC BY 4.0