WEBVTT - Digitally Native Restaurants May Be the Future

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<v Speaker 1>Welcome to Chopping It Up. I'm your host, Michael Halen,

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<v Speaker 1>a senior restaurant and food service analyst at Bloomberg Intelligence.

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<v Speaker 1>Today we're joined by Carl Orsbourne. He's the co author

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<v Speaker 1>of the Delivering the Digital Restaurant books and COO of Juicer.

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<v Speaker 1>Thanks for doing this, Carl.

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<v Speaker 2>It's a privilege to be here. Mico. Thank you for

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<v Speaker 2>your time. Looking forward to our conversation.

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<v Speaker 1>Same man. So you know, let's start with a little

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<v Speaker 1>background on your career path for the listeners that aren't

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<v Speaker 1>familiar with your work.

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<v Speaker 2>Yeah, it's been an interesting journey in anyways. I spent

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<v Speaker 2>eighteen years at BP, the big oil and gas company,

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<v Speaker 2>fifteen years of which were in the convenience store environment.

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<v Speaker 2>That culminated in me running a thousand unit chain over

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<v Speaker 2>here on the West Coast and based in California for

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<v Speaker 2>a number of years. And I got to a point

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<v Speaker 2>in my career I think I turned forty, and I said,

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<v Speaker 2>you know what, there's a small company out there called

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<v Speaker 2>Amazon doing convenience retail. Pretty well. I'm driving a Tesla

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<v Speaker 2>and the world of gasoline might be a little different.

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<v Speaker 2>And I was thinking, what's the next chapter going to look? Like,

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<v Speaker 2>so I thought, maybe it's time to get into something

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<v Speaker 2>a little bit more entrepreneurial, bit more innovative. And it

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<v Speaker 2>led me to a conversation with actually my co author,

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<v Speaker 2>who had left Young Brands and went to Kitchen United,

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<v Speaker 2>you know, one of the foremost ghost kitchen companies out there.

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<v Speaker 2>And I was speaking to her initially with the intent

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<v Speaker 2>of trying to understand, you know, what's it like leaving

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<v Speaker 2>a company of that size and going into a startup environment,

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<v Speaker 2>and really we hit it off really well, and she

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<v Speaker 2>then said, well, why don't you come and run operations

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<v Speaker 2>for us at Kitchen United. And so that's really what

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<v Speaker 2>my journey into the restaurant restaurant technology started back in

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<v Speaker 2>twenty eighteen. And it was really there where I just

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<v Speaker 2>met so many different folks in the industry, the independence

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<v Speaker 2>through to the big chains, and saw the challenge of digitization,

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<v Speaker 2>saw the challenge of off premise. Of course, all of

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<v Speaker 2>this was pre pandemic, of course, where a lot of

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<v Speaker 2>restaurants were trying to say, is this a flash in

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<v Speaker 2>the pan, is this something we should take seriously, or

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<v Speaker 2>is it something that perhaps will be gone in a

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<v Speaker 2>few years. And I said to Meredith one day, driving

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<v Speaker 2>back from Pasadena, I said, it would be great if

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<v Speaker 2>we could get each of our clients, our prospects, a book,

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<v Speaker 2>a book that can tell them why this is happening,

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<v Speaker 2>why it's not the evil vcs, why it's not the

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<v Speaker 2>evil technology companies, but actually why it's the consumer that

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<v Speaker 2>is driving a lot of the energy in this direction.

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<v Speaker 2>And she said, great, and go on Amazon and see

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<v Speaker 2>what you can find. We'll do that, and I think

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<v Speaker 2>that's where Meredith's expectation of our book Journey with end

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<v Speaker 2>quite honestly, Mike, but it didn't right because obviously I

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<v Speaker 2>didn't find anything on Amazon. When we left Kitchen United

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<v Speaker 2>we went about writing the book, we were just in

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<v Speaker 2>the early throes of the pandemic. Every restaurant very quickly

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<v Speaker 2>became a ghost kitchen. Every restaurant had to embrace off premise,

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<v Speaker 2>and our book came out right in the middle of it,

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<v Speaker 2>so it could have been better timed. And in that sense,

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<v Speaker 2>the first book, delivering the Digital Restaurant, Your Roadmap to

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<v Speaker 2>the Future of Food, was all about the why. We

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<v Speaker 2>interviewed one hundred or so executives about what's going on

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<v Speaker 2>in the worlds of off premise and technology, Why to

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<v Speaker 2>be excited about it? Why not to be concerned? And

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<v Speaker 2>it became an international but seller, won a few awards,

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<v Speaker 2>and it really helped me, from a career standpoint, position

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<v Speaker 2>myself as a thought leader in this space. And that

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<v Speaker 2>really led to me being involved in a number of

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<v Speaker 2>advisory roles for food technology restaurant technology companies across the ecosystem.

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<v Speaker 2>I said, on the board of a restaurant group in

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<v Speaker 2>the Middle East, and it's also where my co founders

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<v Speaker 2>are of Juicer found me because they were coming in

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<v Speaker 2>from the travel and hospitality sector and came across the

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<v Speaker 2>book and they told me about what they were doing

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<v Speaker 2>in building a company to help restaurants price more effectively,

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<v Speaker 2>and for me, it just seemed like the next area

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<v Speaker 2>of innovation for the industry, and so about eighteen months

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<v Speaker 2>or so ago joined up with them and that's what

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<v Speaker 2>I've been doing ever since, alongside the new book which

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<v Speaker 2>has just come out, which is under the same name,

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<v Speaker 2>Delivering the Digital Restaurant but the Path the Digital Maturity,

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<v Speaker 2>and this one is almost an accompaniment to the first,

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<v Speaker 2>where it's more of a how to. The first books

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<v Speaker 2>why trying to help restaurants figure out how to you know,

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<v Speaker 2>work through the treacle of figuring out technology in our

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<v Speaker 2>industry and hopefully help them focus where the focus is needed.

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<v Speaker 1>Yeah, it's great. Both books are phenomenal. I can't recommend

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<v Speaker 1>them enough. And I love that you worked as a

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<v Speaker 1>driver for door Dash as part of your research for

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<v Speaker 1>the book, so I got to know, did you ever

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<v Speaker 1>try to sneak a French fry? Where you ever tempted

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<v Speaker 1>to sneak a French fry out of one of those

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<v Speaker 1>bags as a DoorDash?

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<v Speaker 2>No? No, but it was very much a front and

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<v Speaker 2>center area of concern at that time. A lot of

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<v Speaker 2>media was referencing it. But you know, the thing I

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<v Speaker 2>did would say is that I wasn't treated very nicely.

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<v Speaker 2>I really felt the pain that a lot of drivers

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<v Speaker 2>actually get. And you know, whether it be the staff

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<v Speaker 2>at the restaurant looking at the drivers as where you're

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<v Speaker 2>taking my tips away from me, or just the general

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<v Speaker 2>inconvenience that drivers were bringing into the overall mix of

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<v Speaker 2>the operating environment of a restaurant. And I think that's

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<v Speaker 2>really where we try to focus on the first book,

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<v Speaker 2>where we dedicated a whole chapter to drivers to say, look,

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<v Speaker 2>if you think about the driver as a team member,

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<v Speaker 2>as someone that is an extension of your brand, because

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<v Speaker 2>they are fall intents and purposes, the face of your

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<v Speaker 2>brand at the doorsteps of your customers, you know, three

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<v Speaker 2>miles away from your restaurant. If you treat them right,

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<v Speaker 2>then they're going to treat your brand right. And the

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<v Speaker 2>best examples out there are those that you know will

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<v Speaker 2>invite the drivers in to use the restroom, to give

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<v Speaker 2>them a free cup of coffee, to let them try

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<v Speaker 2>out their latest lco So that way, when they are

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<v Speaker 2>in front of the customer, they can say, well, enjoy

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<v Speaker 2>your chicken corma tonight. By the way, they've just done

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<v Speaker 2>the teaka masala differently. You know, you should check it

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<v Speaker 2>out next time. That type of extension of service is

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<v Speaker 2>what're we kind of have come to expect from the

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<v Speaker 2>servers at our tables, So why shouldn't we expect that

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<v Speaker 2>from the drivers at our doors as well.

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<v Speaker 1>Yeah, I think that was a great take away from

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<v Speaker 1>that first book. So I'm hearing a little bit of

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<v Speaker 1>concern about deliveries slowing down with consumer spending. Can you

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<v Speaker 1>give us a little color about what's going on out there?

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<v Speaker 2>Yeah, Well, look, I think it's natural to see some

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<v Speaker 2>pullback from where we've been in the last few years

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<v Speaker 2>through the pandemic. I think given the inflationory environment, the

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<v Speaker 2>resilience of the delivery channel is actually holding up pretty well.

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<v Speaker 2>I was listening to some Medalia research shared at Food

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<v Speaker 2>on Demand that forty one percent of customers say that

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<v Speaker 2>in spite of the inflationary pressures, they're still ordering as

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<v Speaker 2>frequently as they were before. And you know, you need

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<v Speaker 2>to look at the latest results from DoorDash right. Only

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<v Speaker 2>last month, DoorDash raised its profit forecast after beating their

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<v Speaker 2>quarterly revenue expectations, and they've been saying they've seen increased

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<v Speaker 2>orders on food, groceries and convenience products despite the high inflation.

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<v Speaker 2>And I think there's an important area there to focus

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<v Speaker 2>on because they weren't necessarily saying it was just on food, right,

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<v Speaker 2>So their investment in all these other verticals I think

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<v Speaker 2>is starting to play out as well. Similarly, you know,

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<v Speaker 2>their orders are up in that course, so I think

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<v Speaker 2>twenty seven percent. So yeah, I think there is some

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<v Speaker 2>commentary out there. Clearly it's not necessarily at the heights

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<v Speaker 2>of what we were seeing during the pandemic. You know,

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<v Speaker 2>On the flip side of all that, I think we're

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<v Speaker 2>definitely seeing a retrenchment on ultra fast retail for film,

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<v Speaker 2>and I think that is certainly dropping back. You know,

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<v Speaker 2>how fast do you really need that shampoo or box

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<v Speaker 2>of cereal? You know, I've read something recently about the

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<v Speaker 2>app downloads food and drink delivery. App downloads globally have

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<v Speaker 2>shrunk significantly in the last year. To give you some flavor,

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<v Speaker 2>I've got some numbers here over here. Seven hundred and

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<v Speaker 2>thirty seven million apps were downloaded in twenty nineteen, seven

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<v Speaker 2>hundred and ninety seven in twenty twenty, eight hundred and

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<v Speaker 2>seventy seven million in twenty twenty one, and then it

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<v Speaker 2>shrank in twenty twenty two to seven hundred and seventeen million,

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<v Speaker 2>so an eighteen percent drop, and interestingly, about forty four

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<v Speaker 2>percent of those were in the Asia Pacific region. And

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<v Speaker 2>from reading the first but you remember, we talked a

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<v Speaker 2>lot about how the US in many ways is still

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<v Speaker 2>behind a lot of other global entities out there, and

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<v Speaker 2>I think, you know, when you see that, you can

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<v Speaker 2>see there's still a lot of innovation happening, but an

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<v Speaker 2>app download is i'd tell one off event so probably

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<v Speaker 2>it's not something we should be too surprised to see.

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<v Speaker 2>Last thing I'd say about your question is if you

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<v Speaker 2>were to look at the specific channels of dash Pass

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<v Speaker 2>subscriptions or Uber one or grub up plus with their

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<v Speaker 2>Amazon Prime hook up, you know that these subscription orientated

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<v Speaker 2>channels are doing incredibly well right now. So the aggregators

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<v Speaker 2>are super super bullish on those, and I think it's

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<v Speaker 2>making the third party the first party conversion agenda that

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<v Speaker 2>much more difficult. But yeah, I'm still pretty confident. I

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<v Speaker 2>think we're still going to be in a good place

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<v Speaker 2>when it comes to delivery. But no huge surprise that

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<v Speaker 2>given the inflation environment, we've seen a bit of a

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<v Speaker 2>drop off.

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<v Speaker 1>Okay, good stuff, And that leads me to a couple

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<v Speaker 1>more questions that we have. Is DoorDash still the top

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<v Speaker 1>US option for third party delivery? And if so, what

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<v Speaker 1>are their big competitive advantages?

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<v Speaker 2>Well, look, the bracton market share that they've been able

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<v Speaker 2>to get is amazing. I think they're over or close

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<v Speaker 2>to see sixty percent market share in the in the

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<v Speaker 2>US right now. And again, I think that dash Pass

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<v Speaker 2>subscription has been something particularly supportive of that. You know,

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<v Speaker 2>they launched that in the summer of twenty eighteen, where

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<v Speaker 2>Uber one only launched in I think it was the

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<v Speaker 2>end of twenty twenty one. So they have approached market

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<v Speaker 2>sharing a very diligent fashion. You know, they targeted restaurants

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<v Speaker 2>that didn't have any delivery service. They really put a

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<v Speaker 2>focus on empowering restaurants with great data and insights and

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<v Speaker 2>trying to help them have the tools necessary to succeed.

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<v Speaker 2>And then they focused on the urban areas with the

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<v Speaker 2>you know, the larger households, the higher average order values.

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<v Speaker 2>I think they try to be a restaurant first organization,

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<v Speaker 2>and of course, unlike Uber which didn't necessarily start out

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<v Speaker 2>with the eats products, they have got their heartened mind

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<v Speaker 2>completely centered around the restaurant. You know, with all that said,

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<v Speaker 2>there are creating a level of consternation out there right

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<v Speaker 2>now with the price parity piece. Right so they're sending

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<v Speaker 2>letters out to restaurants saying, if you don't price within

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<v Speaker 2>a certain price range of your dining or your first

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<v Speaker 2>party platforms, we're going to reduce your presence or rankings

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<v Speaker 2>on the marketplaces themselves, which has got so many restaurants

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<v Speaker 2>concerned and nervous about well, what does this mean, you know,

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<v Speaker 2>even some of the biggest chains out there now. I

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<v Speaker 2>think there's a couple of ways of looking at that.

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<v Speaker 2>There's one, which is you could argue that given the

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<v Speaker 2>inflation environments, you can understand Doordash's position because perhaps they're

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<v Speaker 2>starting to see that impact. But similarly, I think restaurants

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<v Speaker 2>are realizing how the importance of having a first party

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<v Speaker 2>platform because if they have, if they have something that

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<v Speaker 2>can compete, if they can give their customers some value

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<v Speaker 2>which is at a cheaper price and perhaps as good

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<v Speaker 2>a experience, then why wouldn't they want to encourage their

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<v Speaker 2>customers in that direction, not just because of the better margins,

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<v Speaker 2>but also because of the data that they're going to

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<v Speaker 2>be able to get access to.

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<v Speaker 1>Yeah, for the national change that we cover, this has

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<v Speaker 1>been a key point of emphasis for them for a

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<v Speaker 1>couple of years now. So how effective have chains been

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<v Speaker 1>converting customers from third party to the first party in

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<v Speaker 1>the last year or so and is that impacting third

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<v Speaker 1>party delivery growth?

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<v Speaker 2>Well? I think it depends on the chain. Of course.

0:11:15.120 --> 0:11:17.560
<v Speaker 2>You know, there's certainly success stories when you look at

0:11:17.640 --> 0:11:21.440
<v Speaker 2>Chick fil A, Chipotle, Carva. I guess having a chain

0:11:21.600 --> 0:11:25.040
<v Speaker 2>beginning with CEA helps in that regard. But the way

0:11:25.080 --> 0:11:27.920
<v Speaker 2>I'd look at it is is think about the experience

0:11:27.920 --> 0:11:30.480
<v Speaker 2>that those chains are getting through their apps and their

0:11:30.520 --> 0:11:35.600
<v Speaker 2>first party they're typically offering loyalty, they're typically offering payment,

0:11:36.040 --> 0:11:38.960
<v Speaker 2>and they're typically offering an app that services an omni

0:11:39.080 --> 0:11:41.840
<v Speaker 2>channel guest, which means it's not just an app for

0:11:41.880 --> 0:11:44.640
<v Speaker 2>the delivery occasion, and that means you can use the app,

0:11:44.640 --> 0:11:47.200
<v Speaker 2>you're encouraged to use the app for every time you

0:11:47.280 --> 0:11:49.920
<v Speaker 2>engage with the restaurant. That is so critical. It's a

0:11:49.920 --> 0:11:52.800
<v Speaker 2>trifecta that I think is really really important. And you know,

0:11:52.800 --> 0:11:54.720
<v Speaker 2>when you look at Chick fil A and Chipotle's numbers,

0:11:54.840 --> 0:11:57.839
<v Speaker 2>certainly against the research that I've seen, they're getting something

0:11:57.960 --> 0:12:00.640
<v Speaker 2>like thirty to forty percent of their customers coming through

0:12:00.679 --> 0:12:04.120
<v Speaker 2>that first party channel. Now that said, they're still having

0:12:04.200 --> 0:12:08.079
<v Speaker 2>thirty percent or so, you know, going through a third party.

0:12:08.600 --> 0:12:11.200
<v Speaker 2>And so with that in mind, that tells you that

0:12:11.280 --> 0:12:13.880
<v Speaker 2>there's always going to be a third party customer, a

0:12:13.880 --> 0:12:16.200
<v Speaker 2>customer that has the past subscription that wants to be

0:12:16.200 --> 0:12:20.760
<v Speaker 2>able to utilize that particular medium. But even with Chick

0:12:20.800 --> 0:12:22.920
<v Speaker 2>Filan Chipotle, going back to what we were just talking

0:12:22.920 --> 0:12:25.679
<v Speaker 2>about with price premiums. You know, their price premiums are

0:12:25.679 --> 0:12:29.000
<v Speaker 2>as high as thirty percent in some instances, and so

0:12:29.040 --> 0:12:31.120
<v Speaker 2>they're saying to the guests, well, look, if you're willing

0:12:31.160 --> 0:12:33.840
<v Speaker 2>to pay for that door Dash or Uber Eats experience,

0:12:33.880 --> 0:12:36.000
<v Speaker 2>go right ahead. You're going to pay twenty five thirty

0:12:36.000 --> 0:12:38.480
<v Speaker 2>percent more. But if you come to us, we're going

0:12:38.520 --> 0:12:40.920
<v Speaker 2>to give you rewards. We're going to give you a seamless,

0:12:40.960 --> 0:12:43.560
<v Speaker 2>frictionless interface, and we're going to make sure you can

0:12:43.600 --> 0:12:46.400
<v Speaker 2>pay as simply as possible. You know, in the book,

0:12:46.440 --> 0:12:50.680
<v Speaker 2>I have this reference to count the clicks, and what

0:12:50.760 --> 0:12:53.200
<v Speaker 2>I encourage any restaurant listening to the podcast to do

0:12:53.280 --> 0:12:55.080
<v Speaker 2>is to count the amount of steps it takes for

0:12:55.080 --> 0:12:57.960
<v Speaker 2>your restaurant as a registered customer for them to go

0:12:58.040 --> 0:13:00.199
<v Speaker 2>through a door dash and to order the main idem

0:13:00.200 --> 0:13:02.600
<v Speaker 2>on your menu, and then count the same amount of

0:13:02.640 --> 0:13:06.160
<v Speaker 2>steps it takes on your first party interface, because every

0:13:06.160 --> 0:13:09.720
<v Speaker 2>incremental step, every incremental click, is a reason why they

0:13:09.720 --> 0:13:12.520
<v Speaker 2>sho might as well stay on the third party interface.

0:13:12.559 --> 0:13:14.959
<v Speaker 2>And I think we put a lot of time thinking

0:13:14.960 --> 0:13:17.880
<v Speaker 2>about how do we tell customers about the first party

0:13:17.880 --> 0:13:19.920
<v Speaker 2>you know, is it a bag insert, is it the packaging.

0:13:20.280 --> 0:13:22.160
<v Speaker 2>But actually a lot of times it's all about the

0:13:22.320 --> 0:13:25.200
<v Speaker 2>user centered systems, design of the actual app, of the

0:13:25.200 --> 0:13:28.120
<v Speaker 2>actual interface itself. And if you can get that right,

0:13:28.640 --> 0:13:32.000
<v Speaker 2>then actually you're removing the friction and you're creating the convenience.

0:13:32.000 --> 0:13:35.280
<v Speaker 2>And of course whider customers order delivery because of the convenience,

0:13:35.360 --> 0:13:37.000
<v Speaker 2>so you've got to have that front and center.

0:13:38.400 --> 0:13:40.360
<v Speaker 1>Yeah, and we saw that with Dominoes kind of being

0:13:40.400 --> 0:13:42.320
<v Speaker 1>ahead of the ahead of the game a little bit

0:13:42.360 --> 0:13:45.240
<v Speaker 1>with their tweet to order and zero click ordering systems

0:13:45.280 --> 0:13:49.640
<v Speaker 1>and things of that nature. Our third party delivery rate's

0:13:49.679 --> 0:13:52.520
<v Speaker 1>still in that fifteen to thirty percent range for orders

0:13:52.559 --> 0:13:53.920
<v Speaker 1>placed on the marketplace.

0:13:54.559 --> 0:13:58.440
<v Speaker 2>Yes, they are obviously scale matters. You can get certainly

0:13:58.480 --> 0:14:01.679
<v Speaker 2>some good rates out there. Exclusivity matters, so if you're

0:14:01.720 --> 0:14:04.600
<v Speaker 2>only going to be on one particular marketplace, then that

0:14:04.600 --> 0:14:07.840
<v Speaker 2>can lead to better rates. And I would always encourage

0:14:07.880 --> 0:14:11.880
<v Speaker 2>restaurants to really think about which apps are most prevalent

0:14:11.920 --> 0:14:14.760
<v Speaker 2>in their area. Even with door dash having sixty percent,

0:14:15.080 --> 0:14:17.559
<v Speaker 2>you know, there are certain parts of the states where

0:14:18.120 --> 0:14:20.560
<v Speaker 2>they don't have as many DoorDash drivers, they don't have

0:14:20.600 --> 0:14:23.200
<v Speaker 2>as much presence on the market for the customers using

0:14:23.240 --> 0:14:25.280
<v Speaker 2>those apps. And you know that's true in places like

0:14:25.320 --> 0:14:27.680
<v Speaker 2>New York, for example, where DoorDash users might not be

0:14:27.720 --> 0:14:30.800
<v Speaker 2>as prevalent as you might see elsewhere. Similarly, in LA

0:14:30.960 --> 0:14:34.480
<v Speaker 2>close to where I am, the Postbates customer still is very,

0:14:34.600 --> 0:14:38.080
<v Speaker 2>very prevalent, and so it's interesting how that has played out.

0:14:38.240 --> 0:14:40.800
<v Speaker 2>But what's happened recently in the last year or two

0:14:40.920 --> 0:14:43.800
<v Speaker 2>is that they started to introduce different tiers. In fact,

0:14:43.840 --> 0:14:47.480
<v Speaker 2>page seven of the part of the Digital Maturity touches

0:14:47.520 --> 0:14:50.240
<v Speaker 2>on these different tiers, and it's trying to empower the

0:14:50.320 --> 0:14:52.640
<v Speaker 2>restaurant with I guess a choice as to be able

0:14:52.680 --> 0:14:55.160
<v Speaker 2>to say, well, depending on which level of tier you

0:14:55.240 --> 0:14:57.800
<v Speaker 2>want to pay, you can get access to different services.

0:14:57.840 --> 0:14:59.960
<v Speaker 2>So you have to be on a different tier, for example,

0:15:00.320 --> 0:15:03.040
<v Speaker 2>to be able to have access to those dash past customers.

0:15:03.320 --> 0:15:04.920
<v Speaker 2>You have to be on a certain tier to be

0:15:04.960 --> 0:15:08.040
<v Speaker 2>able to have a wider delivery radius. Right, So there

0:15:08.040 --> 0:15:10.240
<v Speaker 2>are things which I think they're trying to do to

0:15:10.360 --> 0:15:12.480
<v Speaker 2>empower the restaurants to be able to have that choice.

0:15:12.520 --> 0:15:15.440
<v Speaker 2>But look, you know, we've gone from a world where

0:15:15.720 --> 0:15:18.760
<v Speaker 2>this was a small yellow pages of restaurants and now

0:15:18.760 --> 0:15:21.200
<v Speaker 2>it's huge, right, We're talking about a huge level of

0:15:21.280 --> 0:15:24.680
<v Speaker 2>choice that restaurants have to compete against. And it's super

0:15:24.680 --> 0:15:28.240
<v Speaker 2>super important to be above the fold when customers are choosing,

0:15:28.240 --> 0:15:31.280
<v Speaker 2>because there's only a certain amount of searches that they're

0:15:31.280 --> 0:15:33.680
<v Speaker 2>going to go through before making a choice as to

0:15:33.680 --> 0:15:36.080
<v Speaker 2>where they want to eat because they're hungry, right, They're

0:15:36.120 --> 0:15:37.440
<v Speaker 2>not going to spend all night trying to find the

0:15:37.480 --> 0:15:38.200
<v Speaker 2>perfect restaurant.

0:15:38.520 --> 0:15:41.240
<v Speaker 1>Yeah, that's a great point. And to that point, you know,

0:15:41.600 --> 0:15:43.960
<v Speaker 1>being above the fold and making sure that you know

0:15:44.400 --> 0:15:47.520
<v Speaker 1>customers see you when they open the app. What's the

0:15:47.600 --> 0:15:51.080
<v Speaker 1>right amount of marketing spend on those third party delivery

0:15:51.280 --> 0:15:52.720
<v Speaker 1>platforms for a restaurant?

0:15:54.560 --> 0:15:59.000
<v Speaker 2>You know, what's the right frequency is probably the right question, right,

0:15:59.040 --> 0:16:02.680
<v Speaker 2>And the answer to that is always on. The algorithms

0:16:02.760 --> 0:16:07.440
<v Speaker 2>will absolutely penalize you if you ever stop your marketing.

0:16:08.400 --> 0:16:11.440
<v Speaker 2>So I've heard many restaurants say to me, look, even

0:16:11.480 --> 0:16:14.880
<v Speaker 2>if I'm putting ten dollars on, it's better for me

0:16:14.920 --> 0:16:16.520
<v Speaker 2>to keep the ten dollars on than to shut it

0:16:16.520 --> 0:16:19.160
<v Speaker 2>off entirely. You know, and much like a brick and

0:16:19.240 --> 0:16:22.480
<v Speaker 2>mortar restaurant launch, you will want to use the launch

0:16:22.560 --> 0:16:24.840
<v Speaker 2>period benefits well. So if you're about to launch a

0:16:24.880 --> 0:16:27.400
<v Speaker 2>new concept, or even a new unit in a new location.

0:16:27.840 --> 0:16:29.720
<v Speaker 2>It's important for you to have a high level of

0:16:29.760 --> 0:16:32.360
<v Speaker 2>spend in those first thirty to sixty days, much like

0:16:32.400 --> 0:16:34.440
<v Speaker 2>you would with your grand openings and everything else that

0:16:34.440 --> 0:16:38.080
<v Speaker 2>you'd do for a physical launch. In terms of the

0:16:38.160 --> 0:16:41.600
<v Speaker 2>marketing spend on a platform, i'd also answer that in

0:16:41.640 --> 0:16:42.920
<v Speaker 2>a slightly different way to one, in the sense that

0:16:42.960 --> 0:16:45.080
<v Speaker 2>you should be looking for a ten x ro ass right,

0:16:45.120 --> 0:16:47.440
<v Speaker 2>so you want to be making sure that you're you're

0:16:47.520 --> 0:16:50.600
<v Speaker 2>getting at least that kind of level of return. I've

0:16:50.640 --> 0:16:53.600
<v Speaker 2>seen some advocate and in terms of percentage of sales

0:16:53.640 --> 0:16:56.560
<v Speaker 2>of five to eight percent of your sales to go

0:16:56.640 --> 0:16:59.920
<v Speaker 2>towards marketing. Andre Vena of doghouse is suggested ten per

0:17:00.040 --> 0:17:01.760
<v Speaker 2>sent to me in the past, and I think the

0:17:01.760 --> 0:17:04.480
<v Speaker 2>point is you need to have a view, you need

0:17:04.520 --> 0:17:06.960
<v Speaker 2>to measure it, and if it's successful, you need to

0:17:06.960 --> 0:17:08.760
<v Speaker 2>do more of it, and if it isn't, you need

0:17:08.800 --> 0:17:12.919
<v Speaker 2>to do less. And the whole idea of recognizing that

0:17:12.960 --> 0:17:15.360
<v Speaker 2>the restaurant industry now is fast becoming an e commerce

0:17:15.359 --> 0:17:18.679
<v Speaker 2>industry will help you condition your mind in the right

0:17:18.720 --> 0:17:21.840
<v Speaker 2>way to be able to explore this. Because the restaurant

0:17:21.840 --> 0:17:26.000
<v Speaker 2>marketing the cmos of restaurants and their makeup today is

0:17:26.080 --> 0:17:28.240
<v Speaker 2>so so different to what they were ten years ago.

0:17:28.520 --> 0:17:30.760
<v Speaker 2>And so this idea of ab testing, for example, which

0:17:30.760 --> 0:17:32.680
<v Speaker 2>is a you know common practice in e commerce world

0:17:33.040 --> 0:17:36.280
<v Speaker 2>is test different things until you see and improve and measure,

0:17:36.480 --> 0:17:38.800
<v Speaker 2>you know, sit until you see the outcomes that get

0:17:38.840 --> 0:17:42.440
<v Speaker 2>you to something that you're excited about. Because marketplace marketing

0:17:42.680 --> 0:17:45.400
<v Speaker 2>is performance marketing. You know, you're not trying to tell

0:17:45.400 --> 0:17:47.720
<v Speaker 2>your brand story and build awareness here. It's about really

0:17:48.200 --> 0:17:50.760
<v Speaker 2>those metrics. And the other thing I'd mentioned here is

0:17:51.119 --> 0:17:53.800
<v Speaker 2>it's important to look at consistency. If you're a chain,

0:17:54.320 --> 0:17:56.919
<v Speaker 2>you'll be amazed at how many of your locations have

0:17:57.160 --> 0:18:00.879
<v Speaker 2>the wrong hours listed, or they have inconsistent hero photos listed,

0:18:00.960 --> 0:18:03.680
<v Speaker 2>or even no photos against certain items, or maybe they're

0:18:03.680 --> 0:18:07.119
<v Speaker 2>not even listed because they've been they turned themselves off

0:18:07.200 --> 0:18:09.680
<v Speaker 2>last night and they haven't switched themselves back on. There's

0:18:09.720 --> 0:18:12.199
<v Speaker 2>a huge amount that can be done to just to

0:18:12.240 --> 0:18:15.640
<v Speaker 2>optimize your footprint, regardless of the marketing spend that follows,

0:18:16.119 --> 0:18:18.720
<v Speaker 2>and I'd highly encourage restaurants to focus on that first,

0:18:19.160 --> 0:18:20.840
<v Speaker 2>even before getting into the marketing space.

0:18:21.560 --> 0:18:24.960
<v Speaker 1>That's great, and you know, speaking to being always on,

0:18:25.160 --> 0:18:25.680
<v Speaker 1>I think that.

0:18:26.040 --> 0:18:26.199
<v Speaker 2>You know.

0:18:26.240 --> 0:18:28.120
<v Speaker 1>What I learned from your book is that that also

0:18:28.320 --> 0:18:30.840
<v Speaker 1>was important when it comes to just being available on

0:18:30.920 --> 0:18:34.639
<v Speaker 1>the marketplaces, right, there's penalties for thrattling. Correct.

0:18:35.920 --> 0:18:38.160
<v Speaker 2>Yeah, I think I haven't had this ever confirmed by

0:18:38.160 --> 0:18:41.800
<v Speaker 2>the marketplaces, but I think it's an increasing concern for them.

0:18:42.200 --> 0:18:44.320
<v Speaker 2>I mean, th had. We wrote an article for Nations

0:18:44.400 --> 0:18:48.480
<v Speaker 2>Restaurant News in last summer and it was called why

0:18:48.560 --> 0:18:52.200
<v Speaker 2>you Must Keep your Digital Doors Open. And the way

0:18:52.200 --> 0:18:54.280
<v Speaker 2>I would put it is, imagine, Mike, you and I

0:18:54.280 --> 0:18:56.560
<v Speaker 2>were to go out for lunch right now, and the

0:18:56.600 --> 0:18:58.879
<v Speaker 2>owners of the restaurant shut the door in our face,

0:18:59.760 --> 0:19:01.159
<v Speaker 2>and I didn't want to talk to us, and so

0:19:01.160 --> 0:19:03.600
<v Speaker 2>therefore we weren't even able to come in, even if

0:19:03.640 --> 0:19:06.080
<v Speaker 2>the restaurant was busy. I mean, that would be an

0:19:06.080 --> 0:19:10.320
<v Speaker 2>awful hospitality experience for us. But what typically happens is

0:19:10.359 --> 0:19:12.760
<v Speaker 2>that you and I would be invited to maybe sit

0:19:12.760 --> 0:19:14.760
<v Speaker 2>at the bar. They'd hand us a menu that'd give

0:19:14.800 --> 0:19:16.840
<v Speaker 2>us an indication as to how long we'd have to

0:19:16.880 --> 0:19:18.960
<v Speaker 2>wait for, and then empowers with the choice as to

0:19:18.960 --> 0:19:21.160
<v Speaker 2>whether we'd want to do that or not. Right when

0:19:21.160 --> 0:19:24.879
<v Speaker 2>you throttle, you're basically closing your digital doors you're basically

0:19:24.920 --> 0:19:26.800
<v Speaker 2>saying to the customer, we're not even open for your business.

0:19:26.840 --> 0:19:28.720
<v Speaker 2>We don't even care about you. We don't necessarily are

0:19:28.720 --> 0:19:30.000
<v Speaker 2>going to tell you when we're going to be back

0:19:30.040 --> 0:19:33.359
<v Speaker 2>open again. You're not empowering the guests at all. And

0:19:33.440 --> 0:19:35.600
<v Speaker 2>as you recall from the first book, we think third

0:19:35.640 --> 0:19:39.960
<v Speaker 2>party marketplace customers in the large part are opportunities for

0:19:40.000 --> 0:19:43.440
<v Speaker 2>you to gain new customers and to create that first impression.

0:19:43.880 --> 0:19:47.160
<v Speaker 2>So by actually throttling, you're losing the opportunity to give

0:19:47.200 --> 0:19:49.480
<v Speaker 2>that impression, to get that first time customer in the door,

0:19:49.520 --> 0:19:51.679
<v Speaker 2>to give yourself the opportunity to convert them to your

0:19:51.720 --> 0:19:55.480
<v Speaker 2>first party platform eventually as well. And so regardless of

0:19:55.480 --> 0:19:57.800
<v Speaker 2>whether you're being penalized on the marketplaces or not, I

0:19:57.800 --> 0:20:01.400
<v Speaker 2>think it's an awful customer experience. Uh. The flip side

0:20:01.440 --> 0:20:05.639
<v Speaker 2>of all this is that you are constrained in a restaurant.

0:20:05.720 --> 0:20:08.200
<v Speaker 2>You have a certain amount of capacity through pert and

0:20:08.280 --> 0:20:11.000
<v Speaker 2>I think there's an increasing amount of focus now being placed,

0:20:11.280 --> 0:20:13.520
<v Speaker 2>certainly through my friends over at Service Physics, trying to

0:20:13.560 --> 0:20:16.720
<v Speaker 2>help restaurants figure out what is the capacity through but

0:20:16.760 --> 0:20:19.560
<v Speaker 2>what is the total amount of orders that we can

0:20:19.680 --> 0:20:23.880
<v Speaker 2>truly channel through this kitchen, and you know you're seeing, therefore,

0:20:24.320 --> 0:20:26.040
<v Speaker 2>a change in the way in which the back of

0:20:26.080 --> 0:20:28.679
<v Speaker 2>house is being designed. You look to the way in

0:20:28.680 --> 0:20:31.159
<v Speaker 2>which Chipotle now have you know, two makelines, one for

0:20:31.200 --> 0:20:33.760
<v Speaker 2>the front of house, one for the off premise channels.

0:20:34.040 --> 0:20:36.919
<v Speaker 2>You look at the way in which this happened in

0:20:37.000 --> 0:20:39.520
<v Speaker 2>drive through back in the sixties and seventies, and how

0:20:39.880 --> 0:20:42.160
<v Speaker 2>they recognize, Look, if we're going to really make this work,

0:20:42.200 --> 0:20:43.960
<v Speaker 2>we're going to have to design a back of house

0:20:43.960 --> 0:20:46.200
<v Speaker 2>that helps us be able to get someone to drive

0:20:46.280 --> 0:20:48.840
<v Speaker 2>through and collect their order in a matter of minutes.

0:20:49.600 --> 0:20:52.000
<v Speaker 2>And now I think we're past the pandemic restaurants sort

0:20:52.040 --> 0:20:54.679
<v Speaker 2>of realizing this delivery thing is here to stay. This

0:20:54.840 --> 0:20:57.359
<v Speaker 2>is likely to be something like twenty thirty forty percent

0:20:57.400 --> 0:20:59.520
<v Speaker 2>of our business, and so if we don't adapt our

0:20:59.520 --> 0:21:02.240
<v Speaker 2>back of house operations to accommodate for that, then are

0:21:02.280 --> 0:21:05.639
<v Speaker 2>we truly maximizing the throughput capability of our restaurant to

0:21:05.720 --> 0:21:08.000
<v Speaker 2>service orders in the way our customers want to be serviced.

0:21:08.480 --> 0:21:10.639
<v Speaker 1>Yeah, it definitely seems to be here to stay. You know,

0:21:10.640 --> 0:21:14.160
<v Speaker 1>the casual dining chains that we cover, they're all deliveries

0:21:14.200 --> 0:21:18.280
<v Speaker 1>now starting to settle in at about double what it

0:21:18.440 --> 0:21:21.560
<v Speaker 1>was pre pandemic, so I don't see customer demand going

0:21:21.600 --> 0:21:24.959
<v Speaker 1>away anytime soon. The restaurant co op model was pretty

0:21:24.960 --> 0:21:28.520
<v Speaker 1>interesting when I read your first book. Have more popped

0:21:28.560 --> 0:21:31.800
<v Speaker 1>up since you since you wrote the first one, Not.

0:21:31.880 --> 0:21:36.119
<v Speaker 2>To my knowledge, doesn't necessarily mean that they haven't. I

0:21:36.119 --> 0:21:39.879
<v Speaker 2>think restaurants have their own communities. They're not always the

0:21:39.920 --> 0:21:44.320
<v Speaker 2>best to share. But John Siel's local group, who's we

0:21:44.400 --> 0:21:46.639
<v Speaker 2>focused on in the first book. I think it's fascinating

0:21:46.680 --> 0:21:48.840
<v Speaker 2>because you know, when you can have a model that

0:21:48.920 --> 0:21:51.719
<v Speaker 2>succeeds in areas where perhaps the big marketplaces have focused

0:21:51.760 --> 0:21:54.280
<v Speaker 2>their drive deployment elsewhere, or perhaps struggle to find the

0:21:54.280 --> 0:21:57.400
<v Speaker 2>necessary drivers. It definitely makes sense, and it's a way

0:21:57.440 --> 0:22:00.240
<v Speaker 2>of being able to encourage restaurants to come to get other,

0:22:00.720 --> 0:22:04.119
<v Speaker 2>utilize their polled resources, and support their local community. So

0:22:04.760 --> 0:22:07.000
<v Speaker 2>i'd be I haven't heard of any I'd be surprised

0:22:07.000 --> 0:22:09.520
<v Speaker 2>if it's the only one out there, but I think

0:22:09.560 --> 0:22:11.359
<v Speaker 2>clearly it's a different type of business model.

0:22:12.400 --> 0:22:15.640
<v Speaker 1>Yeah, are there any other unique business models that can

0:22:15.760 --> 0:22:18.359
<v Speaker 1>present the challenge to door dash and uber eats in

0:22:18.359 --> 0:22:19.400
<v Speaker 1>the United States?

0:22:20.600 --> 0:22:22.480
<v Speaker 2>I don't know whether they can present a challenge to

0:22:22.520 --> 0:22:26.280
<v Speaker 2>dowd Ash and uber is because I think it's about

0:22:26.560 --> 0:22:28.960
<v Speaker 2>service in a different needs state, and doored ash and

0:22:29.000 --> 0:22:31.600
<v Speaker 2>uber eyes have their role to play. But there are

0:22:31.640 --> 0:22:35.480
<v Speaker 2>certainly other models that are emerging. We talk about the

0:22:35.560 --> 0:22:39.080
<v Speaker 2>vertically integrated delivery kitchens in the second book, like cluster

0:22:39.119 --> 0:22:42.119
<v Speaker 2>truck and UMI and go to kitchens, and they have

0:22:42.440 --> 0:22:46.639
<v Speaker 2>a substantial economic advantage over the incremental model that we

0:22:46.680 --> 0:22:48.960
<v Speaker 2>refer to in the first book. And so therefore you know,

0:22:49.119 --> 0:22:52.440
<v Speaker 2>we described them in detail in a chapter of the

0:22:52.760 --> 0:22:55.840
<v Speaker 2>second book which is called the digitally native restaurant. And

0:22:56.600 --> 0:23:01.280
<v Speaker 2>that whole concept is about how you think about if

0:23:01.359 --> 0:23:03.840
<v Speaker 2>you were to redo the entirety of the business model,

0:23:03.840 --> 0:23:06.000
<v Speaker 2>if you're to start from a blank sheet of paper

0:23:06.040 --> 0:23:11.280
<v Speaker 2>and think about what a customer values, then you'd say, well,

0:23:11.440 --> 0:23:14.399
<v Speaker 2>does the customer really value the cost of labor in

0:23:14.440 --> 0:23:16.560
<v Speaker 2>this experience? Do they really value the cost of real

0:23:16.640 --> 0:23:19.840
<v Speaker 2>estate and the experience? Do they want better quality food?

0:23:20.000 --> 0:23:22.240
<v Speaker 2>Do they want better prices? Do they want the delivery

0:23:22.359 --> 0:23:24.960
<v Speaker 2>of this food to be better? And we can only

0:23:24.960 --> 0:23:27.520
<v Speaker 2>look at the recent stata to say that the delivery

0:23:27.520 --> 0:23:30.439
<v Speaker 2>experience is not good today. And I think the answer

0:23:30.440 --> 0:23:32.239
<v Speaker 2>to those questions would lead you to say, well, if

0:23:32.280 --> 0:23:34.880
<v Speaker 2>you're starting from a blank sheet of paper, then having

0:23:34.920 --> 0:23:38.840
<v Speaker 2>a business model where the entire operating system is shaped

0:23:38.840 --> 0:23:41.200
<v Speaker 2>in such a way that allows you to be able

0:23:41.200 --> 0:23:44.040
<v Speaker 2>to certainly reduce the real estate footprints and the costs,

0:23:44.280 --> 0:23:47.840
<v Speaker 2>certainly reduce the labor and reinvest that back into better

0:23:47.920 --> 0:23:50.560
<v Speaker 2>quality food at a better price, and be able to

0:23:50.600 --> 0:23:53.200
<v Speaker 2>do it at an experiity manner. And I think that's

0:23:53.240 --> 0:23:56.760
<v Speaker 2>super enticing and super encouraging. Fact. In a recent article

0:23:56.760 --> 0:23:58.959
<v Speaker 2>that we did, we actually wrote about the fact that

0:23:58.960 --> 0:24:03.160
<v Speaker 2>we think the native restaurant could well be the fastest

0:24:03.200 --> 0:24:05.800
<v Speaker 2>growing restaurant concept in the US that will follow after

0:24:05.880 --> 0:24:09.920
<v Speaker 2>Fast Casual. It's obviously small right now that I don't

0:24:09.960 --> 0:24:12.040
<v Speaker 2>know of any big chains that are doing anything like this,

0:24:12.160 --> 0:24:14.280
<v Speaker 2>but there are certainly many players like Cluster Truck and

0:24:14.400 --> 0:24:16.880
<v Speaker 2>UMI that are making some great progress out there. And

0:24:17.000 --> 0:24:20.200
<v Speaker 2>you know, Cluster Truck is one location in Indianapolis that's

0:24:20.240 --> 0:24:23.080
<v Speaker 2>doing over eight million AUV through this type of model.

0:24:23.240 --> 0:24:27.760
<v Speaker 1>Wow, impressive. Why are we seeing so many loyalty program

0:24:27.880 --> 0:24:28.760
<v Speaker 1>upgrades right now?

0:24:29.920 --> 0:24:34.040
<v Speaker 2>Yeah, Well, let me see, I have the way I've

0:24:34.040 --> 0:24:37.240
<v Speaker 2>had to answer that. Look, I think we didn't have

0:24:37.320 --> 0:24:40.840
<v Speaker 2>a chapter on loyalty in the second book. It kind

0:24:40.840 --> 0:24:45.000
<v Speaker 2>of proliferates all the way through in different ways because ultimately,

0:24:45.560 --> 0:24:49.359
<v Speaker 2>the understanding of a customer is something that I think

0:24:49.480 --> 0:24:52.879
<v Speaker 2>restaurants are starting to understand is super super important. The

0:24:52.960 --> 0:24:55.280
<v Speaker 2>fact that you can get customer data in ways that

0:24:55.320 --> 0:24:57.280
<v Speaker 2>you weren't really able to do before the world's of

0:24:57.280 --> 0:25:01.440
<v Speaker 2>delivery were upon us is something that's in really powerful.

0:25:01.640 --> 0:25:05.120
<v Speaker 2>So you think about the best restaurant experiences that we have, right,

0:25:05.160 --> 0:25:08.200
<v Speaker 2>You think back to your favorite restaurant, Mike, and why

0:25:08.320 --> 0:25:10.440
<v Speaker 2>that was a great experience. And I think to an

0:25:10.440 --> 0:25:12.720
<v Speaker 2>Italian restaurant near me, and you know, the guy that

0:25:12.840 --> 0:25:15.879
<v Speaker 2>always serves my wife and I. He remembers our names,

0:25:16.480 --> 0:25:18.879
<v Speaker 2>he remembers that we liked this particular bottle of wine.

0:25:19.280 --> 0:25:24.280
<v Speaker 2>He knows about my wife's dietary preferences, and therefore he

0:25:24.400 --> 0:25:26.880
<v Speaker 2>recommends things on the menu as a result, or comes

0:25:26.920 --> 0:25:28.800
<v Speaker 2>up with a bottle of wine that we usually like. Right,

0:25:28.840 --> 0:25:31.680
<v Speaker 2>And what an experience when you feel like you're that VIP.

0:25:32.840 --> 0:25:35.639
<v Speaker 2>So you can only get that on a handful of occasions.

0:25:35.640 --> 0:25:37.920
<v Speaker 2>Not every restaurant waiter is always going to be treating

0:25:37.960 --> 0:25:41.600
<v Speaker 2>you like that, But in a digital world, every customer

0:25:41.800 --> 0:25:44.480
<v Speaker 2>where you have that customer data can be treated like that,

0:25:45.200 --> 0:25:47.960
<v Speaker 2>and I think that's incredibly powerful. So what do I

0:25:48.000 --> 0:25:50.000
<v Speaker 2>mean by that in answer to your question about loyalty

0:25:50.040 --> 0:25:54.639
<v Speaker 2>program upgrades. Well, loyalty is far more than a punch program.

0:25:54.720 --> 0:25:57.679
<v Speaker 2>It's far more than a discounting program. It's about giving

0:25:57.720 --> 0:26:01.280
<v Speaker 2>your guests the type of experience that they want based

0:26:01.280 --> 0:26:05.120
<v Speaker 2>on their buying behaviors and their profile. And so Zach

0:26:05.160 --> 0:26:07.320
<v Speaker 2>Goldstein at Thanks, I love his line. He always says,

0:26:07.480 --> 0:26:09.880
<v Speaker 2>what if you were to treat what the top one

0:26:09.920 --> 0:26:12.440
<v Speaker 2>percent of McDonald's customers to be able to have access

0:26:12.480 --> 0:26:15.119
<v Speaker 2>to the McRib year round? All about if you were

0:26:15.200 --> 0:26:17.480
<v Speaker 2>to take the Taco Bell customers and say, for the

0:26:17.520 --> 0:26:20.199
<v Speaker 2>top one percent, they're invited to come to the headquarters

0:26:20.240 --> 0:26:24.520
<v Speaker 2>and provide feedback and develop the next lto that's a

0:26:24.600 --> 0:26:28.000
<v Speaker 2>way to treat loyalty in a way that would only

0:26:28.240 --> 0:26:31.280
<v Speaker 2>represent and resonate with the top one percent. Of course,

0:26:31.280 --> 0:26:33.520
<v Speaker 2>there are going to be those that are more value orientated,

0:26:33.560 --> 0:26:35.000
<v Speaker 2>and there are going to be those that are more

0:26:35.520 --> 0:26:38.040
<v Speaker 2>newness orientated that want to hear about the ltos. But

0:26:38.480 --> 0:26:41.640
<v Speaker 2>all of these things are enabling restaurants to be able

0:26:41.680 --> 0:26:43.720
<v Speaker 2>to say, if you understand your customer, if you're able

0:26:43.760 --> 0:26:46.880
<v Speaker 2>to segment them appropriately, you can then give them the

0:26:46.960 --> 0:26:50.240
<v Speaker 2>right mechanics they're going to drive them to increase their frequency,

0:26:50.320 --> 0:26:53.199
<v Speaker 2>to increase their spend, and to recognize that because you

0:26:53.320 --> 0:26:55.600
<v Speaker 2>know them, they want to know you, and they want

0:26:55.600 --> 0:26:57.400
<v Speaker 2>to have an ongoing digital engagement.

0:26:57.960 --> 0:27:00.760
<v Speaker 1>Yeah, very cool. I think that's a lot more powerful

0:27:00.800 --> 0:27:04.080
<v Speaker 1>than just giving somebody their tenth burger free or their

0:27:04.119 --> 0:27:06.720
<v Speaker 1>eleventh pizza free or something like that. Can you talk

0:27:06.760 --> 0:27:10.960
<v Speaker 1>a little bit about, you know, the rapid tech adoption

0:27:11.080 --> 0:27:13.080
<v Speaker 1>that we've seen over the last few years and how

0:27:13.119 --> 0:27:16.160
<v Speaker 1>that's impacting independent restaurants.

0:27:16.560 --> 0:27:24.520
<v Speaker 2>Yes, you know. The all it takes is standing in

0:27:24.520 --> 0:27:28.359
<v Speaker 2>the middle of a conference exhibition hall and looking at

0:27:28.640 --> 0:27:30.879
<v Speaker 2>a independent restaurant. So who perhaps has come to that

0:27:31.040 --> 0:27:32.520
<v Speaker 2>this is there one a year that they go to

0:27:33.600 --> 0:27:37.480
<v Speaker 2>and they look around and there's hundreds of vendors and

0:27:37.520 --> 0:27:40.880
<v Speaker 2>they're going, where the heck do I start right there?

0:27:41.720 --> 0:27:45.200
<v Speaker 2>It's this mire of confusion and complexity. There are lots

0:27:45.200 --> 0:27:47.720
<v Speaker 2>of folks out there that's saying they have an only

0:27:47.800 --> 0:27:50.320
<v Speaker 2>one solution. There are lots of folks out there that

0:27:50.359 --> 0:27:53.320
<v Speaker 2>say they have a very specific solution, and as a

0:27:53.320 --> 0:27:56.880
<v Speaker 2>result of that, as an independent, you're coming in and thinking, all, right, now,

0:27:56.920 --> 0:27:59.560
<v Speaker 2>I recognize I need to treat delivery, right. I recognize

0:27:59.560 --> 0:28:02.520
<v Speaker 2>I've got to invest in technology. And I think what's

0:28:02.560 --> 0:28:05.760
<v Speaker 2>happened through the pandemic is a lot of restauranting. You know,

0:28:05.880 --> 0:28:08.240
<v Speaker 2>chains and independent alike have done a bit of a

0:28:08.280 --> 0:28:11.640
<v Speaker 2>spray and pray strategy of just deploying their resources into

0:28:11.680 --> 0:28:15.399
<v Speaker 2>whatever technology was necessary to keep their doors open. And

0:28:15.480 --> 0:28:17.959
<v Speaker 2>now they're looking at this and you know, a lot

0:28:17.960 --> 0:28:21.200
<v Speaker 2>of the more established chains they're spending money maybe two

0:28:21.200 --> 0:28:24.000
<v Speaker 2>to four percent of their sales on technology, fifteen to

0:28:24.040 --> 0:28:26.760
<v Speaker 2>twenty different types of technology across their chain, and they're

0:28:26.760 --> 0:28:29.120
<v Speaker 2>probably utilizing each one not thirty forty percent of its

0:28:29.119 --> 0:28:31.760
<v Speaker 2>true capability, and they go, well, this doesn't make sense.

0:28:32.000 --> 0:28:35.480
<v Speaker 2>And of course, in this cost environment right now, there's

0:28:35.520 --> 0:28:38.280
<v Speaker 2>probably a lot of CFOs asking their CEOs to say, well,

0:28:38.640 --> 0:28:40.480
<v Speaker 2>we need to tighten our belts a little bit here.

0:28:40.880 --> 0:28:43.160
<v Speaker 2>And that's exactly the same for the independent as well.

0:28:43.200 --> 0:28:47.320
<v Speaker 2>And so the independent not only lacks the resource to

0:28:47.360 --> 0:28:50.040
<v Speaker 2>have that level of spend, but they also don't necessarily

0:28:50.040 --> 0:28:54.640
<v Speaker 2>have the capability and capacity to spend in understanding what

0:28:54.760 --> 0:28:57.600
<v Speaker 2>this technology can do and how to fully utilize it.

0:28:58.200 --> 0:29:00.640
<v Speaker 2>And so the role I think here is for the

0:29:00.720 --> 0:29:04.240
<v Speaker 2>technology companies to be better at being able to say

0:29:04.560 --> 0:29:09.040
<v Speaker 2>who they service, what they offer, truly offer, how they

0:29:09.080 --> 0:29:12.200
<v Speaker 2>differentiate from their competitors, and to be able to clearly

0:29:12.280 --> 0:29:15.120
<v Speaker 2>articulate the way in which they support the restaurant be

0:29:15.120 --> 0:29:18.320
<v Speaker 2>able to utilize their technology after the contract is signed.

0:29:18.800 --> 0:29:21.160
<v Speaker 2>You know, the very basis of the Path to Digital

0:29:21.200 --> 0:29:24.440
<v Speaker 2>Maturity book that we've written is to help the independent

0:29:25.040 --> 0:29:26.920
<v Speaker 2>look at where they're at, to find where they are

0:29:26.920 --> 0:29:30.240
<v Speaker 2>on this path to digital maturity and say, focus in

0:29:30.320 --> 0:29:33.440
<v Speaker 2>on that space. First, deploy your resource, deploy whatever capacity

0:29:33.440 --> 0:29:36.600
<v Speaker 2>you've got on getting good at that particular area. And

0:29:36.640 --> 0:29:38.440
<v Speaker 2>then once you've got to that place, and there's a

0:29:38.440 --> 0:29:41.000
<v Speaker 2>whole bunch of worksheets and tips within the book, once

0:29:41.000 --> 0:29:43.400
<v Speaker 2>you've got to that place, then move on to the next.

0:29:44.040 --> 0:29:46.040
<v Speaker 2>And at some point you might get to a point

0:29:46.040 --> 0:29:48.280
<v Speaker 2>on this path to say, you know what, that's it

0:29:48.320 --> 0:29:50.080
<v Speaker 2>for me. That's as far as I'm going to get.

0:29:50.120 --> 0:29:52.560
<v Speaker 2>And that might mean that stunts your growth from that

0:29:52.600 --> 0:29:55.880
<v Speaker 2>particular channel onwards, but at least you know that you've

0:29:55.920 --> 0:29:57.640
<v Speaker 2>done as much as you can based on what you

0:29:57.640 --> 0:30:00.080
<v Speaker 2>are able to do, and I think that's going to

0:30:00.000 --> 0:30:02.760
<v Speaker 2>to get to a far more efficient use of an

0:30:02.800 --> 0:30:05.800
<v Speaker 2>independent spend on technology. And it's also going to help

0:30:05.840 --> 0:30:08.280
<v Speaker 2>them to recognize it's a marathon, not a sprint.

0:30:08.840 --> 0:30:11.680
<v Speaker 1>No, I guess. Kind of focusing back out on the

0:30:11.760 --> 0:30:15.640
<v Speaker 1>larger picture again, I'd assume cheaper labor is part of it.

0:30:15.640 --> 0:30:17.840
<v Speaker 1>But why are the delivery fees so much cheaper in

0:30:17.960 --> 0:30:19.680
<v Speaker 1>China versus the United States?

0:30:20.440 --> 0:30:23.480
<v Speaker 2>Well, you're right, I mean, for sure, the cheaper labor

0:30:23.520 --> 0:30:28.160
<v Speaker 2>is a big factor. When you look at also the

0:30:28.520 --> 0:30:32.000
<v Speaker 2>way in which restaurants are located next to the public

0:30:32.040 --> 0:30:35.080
<v Speaker 2>that they service. Density is a big part of it

0:30:35.200 --> 0:30:39.000
<v Speaker 2>as well, right, So, I think for me the density

0:30:39.000 --> 0:30:41.120
<v Speaker 2>factor we've touched on a little bit when we reference

0:30:41.160 --> 0:30:43.600
<v Speaker 2>the UK as well, which doesn't have the cheap labor,

0:30:43.640 --> 0:30:45.840
<v Speaker 2>but it certainly has the density of where its population

0:30:45.960 --> 0:30:48.880
<v Speaker 2>is relative to the restaurants. But I think those two

0:30:48.880 --> 0:30:51.480
<v Speaker 2>combined are very much part of it. The other side

0:30:51.480 --> 0:30:54.640
<v Speaker 2>of it is when you look at ELIME and mit on,

0:30:55.040 --> 0:30:58.880
<v Speaker 2>the two primary aggregators in China, they are doing and

0:30:58.960 --> 0:31:01.440
<v Speaker 2>have been doing a lot what stored Ash and uber

0:31:01.440 --> 0:31:03.160
<v Speaker 2>eats are starting to get into as well, which is

0:31:03.280 --> 0:31:05.760
<v Speaker 2>multiple verticals, right. So when you go onto the apps,

0:31:06.240 --> 0:31:10.040
<v Speaker 2>they'll have the WeChat integration, which is the communication device

0:31:10.040 --> 0:31:13.200
<v Speaker 2>that everyone uses, like the WhatsApp in the US, and

0:31:13.280 --> 0:31:16.200
<v Speaker 2>so everyone communicates through that, payment is done through that,

0:31:16.560 --> 0:31:18.680
<v Speaker 2>but they also have through those apps the ability to

0:31:18.800 --> 0:31:22.960
<v Speaker 2>use like an Expedia of Fandango. So there's multiple verticals

0:31:23.000 --> 0:31:25.680
<v Speaker 2>being supported through one interface. So in that sense, when

0:31:25.720 --> 0:31:27.960
<v Speaker 2>you speak to people that have lived in China and

0:31:28.000 --> 0:31:30.680
<v Speaker 2>have worked and used those apps, they say, it's just

0:31:30.960 --> 0:31:34.120
<v Speaker 2>part of the way in which we engage with given services,

0:31:34.160 --> 0:31:37.600
<v Speaker 2>and so I think that obviously drives efficiencies as well,

0:31:37.640 --> 0:31:41.280
<v Speaker 2>because when you've got numerous different things being delivered and

0:31:41.400 --> 0:31:46.200
<v Speaker 2>utilizing the logistics fleet to support, you're driving those economies

0:31:46.240 --> 0:31:48.200
<v Speaker 2>into the oval system as well. And that's one of

0:31:48.240 --> 0:31:50.280
<v Speaker 2>the things that I think we're going to see over

0:31:50.360 --> 0:31:52.880
<v Speaker 2>time when we look at how dawed Ash and uber

0:31:52.880 --> 0:31:55.400
<v Speaker 2>eats need to try and drive better profitability back into

0:31:55.400 --> 0:31:58.520
<v Speaker 2>their businesses, is how do we make logistics more efficient?

0:31:59.000 --> 0:32:01.080
<v Speaker 2>And I think large part of that is about utilizing

0:32:01.120 --> 0:32:05.720
<v Speaker 2>the available fleets of delivery in a more spread fashion

0:32:05.720 --> 0:32:07.600
<v Speaker 2>as opposed to just during the peak day parts of

0:32:07.600 --> 0:32:08.440
<v Speaker 2>when people are eating.

0:32:10.080 --> 0:32:13.680
<v Speaker 1>Yeah, it's interesting, all right. Can you touch on some

0:32:13.720 --> 0:32:16.360
<v Speaker 1>of the ghost kitchen and virtual brand issues that we've

0:32:16.360 --> 0:32:18.800
<v Speaker 1>been hearing a little bit about. You know, we've heard

0:32:18.800 --> 0:32:22.120
<v Speaker 1>about Reef obviously with some issues. I was that Brinker's

0:32:22.160 --> 0:32:28.280
<v Speaker 1>investor day last week, and they're gonna end their Maggiano's

0:32:28.320 --> 0:32:33.640
<v Speaker 1>Classics virtual brand of the Maggiano stores. You know, was

0:32:33.680 --> 0:32:36.760
<v Speaker 1>there just over investment over the last couple of years

0:32:37.600 --> 0:32:41.040
<v Speaker 1>or is there something else going on in those business models?

0:32:42.600 --> 0:32:46.600
<v Speaker 2>Very timely subject, right, We've got obviously the next bite

0:32:46.720 --> 0:32:49.200
<v Speaker 2>out to see three that's happened recently as well. So

0:32:49.800 --> 0:32:53.080
<v Speaker 2>there's there's a lot of people coming out of the woodwork.

0:32:53.640 --> 0:32:55.880
<v Speaker 2>I told you so these things were always destined to fail.

0:32:56.600 --> 0:33:01.040
<v Speaker 2>But look the bis I posted something yesterday. The bicycle

0:33:02.320 --> 0:33:05.280
<v Speaker 2>launched in eighteen hundred and something, right, and the penny

0:33:05.320 --> 0:33:07.880
<v Speaker 2>farthing came out seventy years later from its first the

0:33:07.880 --> 0:33:10.840
<v Speaker 2>wooden bicycle, And today everyone's going around on these forty

0:33:10.880 --> 0:33:13.760
<v Speaker 2>mile an hour electric bikes and it's like, Wow, how

0:33:13.800 --> 0:33:16.880
<v Speaker 2>far has this thing come? And I think we're at

0:33:16.880 --> 0:33:19.720
<v Speaker 2>the Penny Fathers the stage of this right now, right it's there.

0:33:19.760 --> 0:33:21.120
<v Speaker 2>It kind of makes sense. It gets me around, but

0:33:21.160 --> 0:33:23.280
<v Speaker 2>it's not necessarily the most efficient way of us being

0:33:23.320 --> 0:33:28.440
<v Speaker 2>able to transport ourselves. And in that sense, I think

0:33:28.600 --> 0:33:33.640
<v Speaker 2>we're just in a place of innovation evolving. The terms

0:33:33.640 --> 0:33:39.479
<v Speaker 2>ghost kitchens of virtual brands get interwoven unnecessarily. My position,

0:33:39.520 --> 0:33:42.600
<v Speaker 2>ghost kitchens as the hardware and virtual brands are the software,

0:33:42.640 --> 0:33:46.160
<v Speaker 2>and they can operate interdependently of each other. You can

0:33:46.240 --> 0:33:49.280
<v Speaker 2>have traditional brick and mortar brands operating out of a

0:33:49.280 --> 0:33:52.120
<v Speaker 2>ghost kitchen, and you can have virtual brands operating out

0:33:52.120 --> 0:33:54.880
<v Speaker 2>of a brick and mortar kitchen, right, so's they can

0:33:54.960 --> 0:33:57.960
<v Speaker 2>work independently of each other. And certainly in the second

0:33:58.000 --> 0:34:01.160
<v Speaker 2>book we reference the fact there are different types of

0:34:01.240 --> 0:34:04.600
<v Speaker 2>models out there, different types of ghost kitchens that service

0:34:04.720 --> 0:34:07.960
<v Speaker 2>the needs of what you are after versus others. Same

0:34:08.000 --> 0:34:11.280
<v Speaker 2>with virtual brands, right, And it's about trying to assess,

0:34:11.400 --> 0:34:14.520
<v Speaker 2>for the restaurant standpoint, what do you need, what are

0:34:14.560 --> 0:34:18.759
<v Speaker 2>your strengths, where are your opportunities? Because part of the

0:34:18.840 --> 0:34:22.080
<v Speaker 2>challenge that's come with having so much money invested into

0:34:22.160 --> 0:34:24.480
<v Speaker 2>not just ghost kitchens and virtual brands, but just general

0:34:24.520 --> 0:34:27.920
<v Speaker 2>restaurant technology in general. What's come with that is a

0:34:28.000 --> 0:34:31.120
<v Speaker 2>huge level of expectation, you know, the founders and one

0:34:31.239 --> 0:34:34.879
<v Speaker 2>now myself is we get this money, and we get

0:34:34.920 --> 0:34:37.960
<v Speaker 2>this money and with then the promise of returns, and

0:34:38.320 --> 0:34:40.879
<v Speaker 2>that means the expectations are set in such a way

0:34:40.920 --> 0:34:44.600
<v Speaker 2>and that leads to large sales forces being developed very quickly,

0:34:45.000 --> 0:34:47.840
<v Speaker 2>and as a result of that, the potential and the

0:34:47.840 --> 0:34:52.360
<v Speaker 2>propensity I would argue for over selling and overpromising and

0:34:52.440 --> 0:34:56.719
<v Speaker 2>ultimately under delivering. And I think that's part of the

0:34:57.120 --> 0:34:59.640
<v Speaker 2>challenge that has existed over the last few years, which

0:34:59.640 --> 0:35:02.560
<v Speaker 2>I think, given the slightly tighter investment environment right now,

0:35:02.920 --> 0:35:05.279
<v Speaker 2>is actually creating a better model for us. Right We're

0:35:05.280 --> 0:35:07.480
<v Speaker 2>going to run better businesses now with the fact that

0:35:07.520 --> 0:35:09.400
<v Speaker 2>there's less money around and we've got to create a

0:35:09.400 --> 0:35:12.439
<v Speaker 2>business model that works. And so I'm not saying that's

0:35:12.480 --> 0:35:15.280
<v Speaker 2>necessarily the case with all Ghost Kitchen and virtual brand models,

0:35:15.320 --> 0:35:18.360
<v Speaker 2>but when you think about the thing that has encouraged

0:35:18.440 --> 0:35:21.759
<v Speaker 2>restaurants into working with the Ghost Kitchen, it's because it

0:35:21.840 --> 0:35:24.279
<v Speaker 2>seems too good to be true. So you're saying, this

0:35:24.400 --> 0:35:26.719
<v Speaker 2>great idea that I've got for a food concept, I

0:35:26.760 --> 0:35:29.080
<v Speaker 2>now can come in and pay a few thousand dollars

0:35:29.200 --> 0:35:31.759
<v Speaker 2>rent and not have to deploy seven figure capital some

0:35:31.760 --> 0:35:34.759
<v Speaker 2>I'm into developing my own brick and mortar restaurant, and

0:35:34.840 --> 0:35:37.080
<v Speaker 2>everyone goes, well, that's fantastic, I'll do that. And what

0:35:37.120 --> 0:35:39.600
<v Speaker 2>they've forgotten about is what we talked about earlier is

0:35:39.600 --> 0:35:42.160
<v Speaker 2>that you still have to create brands that can resonate

0:35:42.360 --> 0:35:45.120
<v Speaker 2>and reach the customer when you don't have any physical doors.

0:35:45.680 --> 0:35:47.760
<v Speaker 2>It's why the virtual brands out there that are succeeding,

0:35:47.840 --> 0:35:50.640
<v Speaker 2>like the mister Beistsburger, that have the reach right, that

0:35:50.760 --> 0:35:55.120
<v Speaker 2>have the presence through celebrities, they're the ones that still

0:35:55.120 --> 0:35:57.840
<v Speaker 2>seem to be resonating and succeeding. You only need to

0:35:57.840 --> 0:36:01.520
<v Speaker 2>look at Pinky Cole's venture Slutty Vegan, which you know

0:36:01.800 --> 0:36:05.240
<v Speaker 2>she's not a celebrity as such, but she gets digital marketing.

0:36:05.320 --> 0:36:09.160
<v Speaker 2>She gets the importance of creating digital engagement. She recognizes

0:36:09.200 --> 0:36:12.319
<v Speaker 2>the way in which if you create that connection in

0:36:12.360 --> 0:36:15.600
<v Speaker 2>digital environments, you can create both a virtual and a

0:36:15.640 --> 0:36:19.440
<v Speaker 2>physical relationship with your customers, which is why they're Texas launchries.

0:36:19.600 --> 0:36:22.719
<v Speaker 2>Recently they had thousands of people queue up to get

0:36:22.719 --> 0:36:27.759
<v Speaker 2>their first taste of Texan Slutty Vegan. So I think

0:36:27.880 --> 0:36:31.440
<v Speaker 2>part of it, the get rich quick mentality has been exposed,

0:36:31.560 --> 0:36:33.840
<v Speaker 2>and I think there's been a lot that have realized

0:36:33.880 --> 0:36:36.879
<v Speaker 2>that not every model works for them, and I think

0:36:36.920 --> 0:36:39.080
<v Speaker 2>it's about trying to recognize that there is a place

0:36:39.080 --> 0:36:41.000
<v Speaker 2>for them, but it's about making sure you make an

0:36:41.000 --> 0:36:44.000
<v Speaker 2>informed decision so that the model works for you as

0:36:44.040 --> 0:36:45.200
<v Speaker 2>well as for the operator.

0:36:46.920 --> 0:36:50.640
<v Speaker 1>Yeah, that's great. I agree. You know, just from a

0:36:50.680 --> 0:36:54.640
<v Speaker 1>capacity utilization standpoint, right, like using a virtual brand to

0:36:55.239 --> 0:36:59.759
<v Speaker 1>you know, in a kitchen that's being underutilized, or using

0:36:59.760 --> 0:37:03.240
<v Speaker 1>a ghost kitchen to help alleviate pressure on a kitchen

0:37:03.280 --> 0:37:06.960
<v Speaker 1>that's absolutely jammed on a Friday and Saturday night. I

0:37:06.960 --> 0:37:09.879
<v Speaker 1>think there's always going to be a need for that.

0:37:09.920 --> 0:37:11.719
<v Speaker 1>So it's going to be very interesting to see how

0:37:11.719 --> 0:37:16.640
<v Speaker 1>it all shakes out. All right, great, so let's talk

0:37:16.640 --> 0:37:19.239
<v Speaker 1>about Juicer a little bit. Can you just talk I

0:37:19.280 --> 0:37:22.440
<v Speaker 1>guess about how it got started and how you got

0:37:22.440 --> 0:37:24.600
<v Speaker 1>affiliated with the team of Juicer.

0:37:25.440 --> 0:37:28.880
<v Speaker 2>Yeah. So Juicer came as a result of an idea

0:37:28.920 --> 0:37:31.840
<v Speaker 2>from our chairman, Drew Patterson, who was the former CMO

0:37:32.400 --> 0:37:36.120
<v Speaker 2>found a CMO over at Kayak and the CEO of

0:37:36.239 --> 0:37:38.000
<v Speaker 2>jet Sets. So he came in from the travel e

0:37:38.000 --> 0:37:42.560
<v Speaker 2>commerce space, and Ashvin our CEO, built a e commerce

0:37:42.560 --> 0:37:44.520
<v Speaker 2>company in the hotel space as well, used to run

0:37:45.400 --> 0:37:48.480
<v Speaker 2>e commerce for a global hotel chain. So the guys

0:37:48.520 --> 0:37:53.560
<v Speaker 2>came really from seeing a lot of the marketplace challenges

0:37:53.600 --> 0:37:56.520
<v Speaker 2>that hotels had to face and have almost seen the

0:37:56.520 --> 0:37:58.640
<v Speaker 2>playbook that restaurants are going through. It's kind of funny

0:37:58.680 --> 0:37:59.960
<v Speaker 2>in a way because I always call them the claim

0:38:00.320 --> 0:38:02.080
<v Speaker 2>they're going to tell They're always telling me about what's

0:38:02.120 --> 0:38:05.319
<v Speaker 2>going to happen next, And you think about that, and

0:38:05.400 --> 0:38:07.239
<v Speaker 2>then you see in which the ways in which our

0:38:07.600 --> 0:38:11.759
<v Speaker 2>our flight tickets and our hotel rooms fluctuating price, Well,

0:38:11.760 --> 0:38:15.400
<v Speaker 2>this has never happened in restaurants. You know. I posted

0:38:15.440 --> 0:38:19.080
<v Speaker 2>something a few days ago about this little boy that

0:38:19.200 --> 0:38:23.359
<v Speaker 2>was running a lemonade stand, and it's a TikTok video,

0:38:23.440 --> 0:38:27.040
<v Speaker 2>fun very amusing TikTok video. And there's people walking by

0:38:27.120 --> 0:38:28.759
<v Speaker 2>and they say and they said, well, how much is

0:38:28.760 --> 0:38:32.400
<v Speaker 2>the lemonade? And the little boy goes fifty dollars. They go,

0:38:32.440 --> 0:38:36.040
<v Speaker 2>what fifty dollars? That's a lot. And the point by

0:38:36.239 --> 0:38:40.200
<v Speaker 2>me referencing that is that if that little boy had

0:38:40.480 --> 0:38:43.640
<v Speaker 2>taken the typical restaurant approach, he had taken the cost

0:38:43.680 --> 0:38:45.759
<v Speaker 2>of the lemons, the cost of the water, the cost

0:38:45.760 --> 0:38:47.960
<v Speaker 2>of the cups, the cost of the sugar, and come

0:38:48.040 --> 0:38:50.200
<v Speaker 2>up with maybe a price after looking at what the

0:38:50.200 --> 0:38:53.040
<v Speaker 2>other kids are selling down the street. And then when

0:38:53.040 --> 0:38:54.880
<v Speaker 2>the cost of lemons and the cost of sugar increase,

0:38:54.960 --> 0:38:57.400
<v Speaker 2>he might increase his price, right, And that's the traditional

0:38:57.440 --> 0:38:59.719
<v Speaker 2>way of how restaurants price their menus. It's why over

0:38:59.760 --> 0:39:03.000
<v Speaker 2>the last year we've seen two or three blanket price

0:39:03.080 --> 0:39:08.160
<v Speaker 2>increases happen across restaurant menus. But it's such a blunt instrument,

0:39:08.560 --> 0:39:12.400
<v Speaker 2>it really is. And so using demand based pricing, using

0:39:12.480 --> 0:39:15.040
<v Speaker 2>data science to be able to understand that different products

0:39:15.080 --> 0:39:19.120
<v Speaker 2>on a restaurant's menu have different levels of elasticity, and

0:39:19.200 --> 0:39:21.680
<v Speaker 2>to be able to understand, based on the capacity stuff

0:39:21.719 --> 0:39:23.960
<v Speaker 2>that we were talking about earlier, that at different times

0:39:24.000 --> 0:39:27.120
<v Speaker 2>of the week, the restaurant's kitchen is at different levels

0:39:27.120 --> 0:39:31.400
<v Speaker 2>of stress. Isn't there an opportunity to say, well, the

0:39:32.080 --> 0:39:35.680
<v Speaker 2>cheeseburger that's ten dollars on a Monday at three pm

0:39:36.040 --> 0:39:38.799
<v Speaker 2>could potentially be ten dollars and fifty cents on a

0:39:38.800 --> 0:39:42.719
<v Speaker 2>Friday at seven pm. And I want to emphasize that,

0:39:42.760 --> 0:39:45.600
<v Speaker 2>at least with juicer. We put in some very specific

0:39:45.680 --> 0:39:48.279
<v Speaker 2>constraints here, so we asked the restaurant, you know, what

0:39:48.320 --> 0:39:51.000
<v Speaker 2>types of range are they comfortable with, and many of

0:39:51.040 --> 0:39:53.480
<v Speaker 2>them will say, you know, zero to twenty percent. So

0:39:53.520 --> 0:39:55.520
<v Speaker 2>that means you don't get the tailor swift effect, right,

0:39:55.560 --> 0:39:57.680
<v Speaker 2>so that when all the restaurants around them, or when

0:39:57.680 --> 0:39:59.560
<v Speaker 2>you're going to a heat wave, you're not suddenly seeing that,

0:39:59.760 --> 0:40:02.160
<v Speaker 2>you know, drinks prices are five hundred percent of the

0:40:02.200 --> 0:40:05.920
<v Speaker 2>typical price. The point here, I think is is that

0:40:06.000 --> 0:40:07.799
<v Speaker 2>you can use data, much like we are talking about

0:40:07.800 --> 0:40:10.080
<v Speaker 2>with customers. You can use data to make more informed

0:40:10.120 --> 0:40:12.799
<v Speaker 2>decisions around pricing your menus. And that's what our team

0:40:12.840 --> 0:40:16.760
<v Speaker 2>are doing. We take a suite of pos transactional data,

0:40:17.200 --> 0:40:20.080
<v Speaker 2>we put that into our algorithm. Our algorithm is built

0:40:20.120 --> 0:40:22.719
<v Speaker 2>by one of our other co founders who's built one

0:40:22.760 --> 0:40:27.400
<v Speaker 2>of the leading dynamic pricing engines that supports the hotel industry.

0:40:27.520 --> 0:40:29.000
<v Speaker 2>So we've kind of been there and know how these

0:40:29.000 --> 0:40:33.239
<v Speaker 2>things work. And then we take those prices, we deploy them,

0:40:33.320 --> 0:40:36.000
<v Speaker 2>we measure them, we analyze them, we deploy them very

0:40:36.040 --> 0:40:38.640
<v Speaker 2>gradually so you don't get stick a shock effect, and

0:40:38.680 --> 0:40:40.440
<v Speaker 2>then we report back to the restaurants, So the restaurant

0:40:40.480 --> 0:40:43.600
<v Speaker 2>doesn't actually have to get involved at all in really

0:40:43.840 --> 0:40:46.239
<v Speaker 2>doing anything at all that they would otherwise have to do,

0:40:46.280 --> 0:40:49.400
<v Speaker 2>because for us, it's a full service solution. I think

0:40:49.440 --> 0:40:52.840
<v Speaker 2>what's helpful about this then is that if you deploy

0:40:52.920 --> 0:40:55.399
<v Speaker 2>this in the right way, you can then optimize things

0:40:55.440 --> 0:40:58.799
<v Speaker 2>like promotions. You can optimize your e commerce presence. Right,

0:40:58.800 --> 0:41:00.799
<v Speaker 2>you can understand, well, what if I want to drive

0:41:00.840 --> 0:41:02.879
<v Speaker 2>volume at different times, what if I want to treat

0:41:02.880 --> 0:41:05.560
<v Speaker 2>different customer segments differently in different ways, and what about

0:41:05.600 --> 0:41:07.440
<v Speaker 2>if I want to use other data streams? You know,

0:41:07.520 --> 0:41:09.520
<v Speaker 2>so our product over time is going to include weather

0:41:09.960 --> 0:41:15.040
<v Speaker 2>specific events, delivery time raises, the ways in which customer

0:41:15.120 --> 0:41:17.920
<v Speaker 2>ratings play into this. In fact, Mike, I don't know

0:41:17.920 --> 0:41:19.759
<v Speaker 2>where they told you this to you before, but you know,

0:41:19.800 --> 0:41:22.240
<v Speaker 2>we did a survey of a thousand restaurants across fifteen

0:41:22.239 --> 0:41:25.600
<v Speaker 2>different states in the US on Super Bowl Sunday and thought,

0:41:25.640 --> 0:41:27.759
<v Speaker 2>you know, if ever there was a time for restaurants

0:41:27.760 --> 0:41:31.080
<v Speaker 2>to change their price, this would be it. Do you

0:41:31.160 --> 0:41:34.120
<v Speaker 2>know how many restaurants out of those thousands changed their price?

0:41:34.920 --> 0:41:38.000
<v Speaker 2>Not one, not one, not one change of price. And

0:41:38.080 --> 0:41:40.399
<v Speaker 2>it tells you that there's money on the table here,

0:41:40.440 --> 0:41:42.600
<v Speaker 2>So dynamic pricing I think is going to come. We're

0:41:42.600 --> 0:41:44.560
<v Speaker 2>certainly going to see more volatility, but for us this

0:41:44.680 --> 0:41:47.080
<v Speaker 2>is like two three price changes a day at max.

0:41:47.719 --> 0:41:49.680
<v Speaker 2>So a lot of this is about just slowly get

0:41:49.680 --> 0:41:51.920
<v Speaker 2>into this and using more data to make more informed

0:41:51.920 --> 0:41:55.200
<v Speaker 2>pricing decisions and taking money that's on the table. We're

0:41:55.239 --> 0:41:59.839
<v Speaker 2>focused on off premise largely because the customers today are

0:42:00.000 --> 0:42:02.160
<v Speaker 2>would you receive in dynamic prices, It's just it's coming

0:42:02.200 --> 0:42:05.480
<v Speaker 2>through the delivery price, right, and so restaurants aren't benefiting

0:42:05.520 --> 0:42:07.560
<v Speaker 2>a tool from that. So in that sense, we think

0:42:07.600 --> 0:42:11.200
<v Speaker 2>the customer is going to be more accommodating and ultimately

0:42:11.200 --> 0:42:14.680
<v Speaker 2>it's going to help restaurants optimize their off premise margins.

0:42:14.320 --> 0:42:18.480
<v Speaker 1>To yeah, maybe ease the customers into this whole dynamic

0:42:18.560 --> 0:42:23.600
<v Speaker 1>pricing you know type of scenario. And I think it's

0:42:24.000 --> 0:42:26.320
<v Speaker 1>it's really important. They talked about it that like twenty

0:42:26.360 --> 0:42:30.680
<v Speaker 1>percent Governor on't it because I feel like, you know,

0:42:30.920 --> 0:42:34.760
<v Speaker 1>customers could be taken aback in restaurant if the price

0:42:34.840 --> 0:42:39.920
<v Speaker 1>increases are too much. What types of restaurants do you

0:42:39.920 --> 0:42:41.759
<v Speaker 1>think dynamic pricing would work best for?

0:42:43.360 --> 0:42:45.919
<v Speaker 2>Well, certainly those at least for where our business model

0:42:45.960 --> 0:42:48.200
<v Speaker 2>is right now that have off premise focus that have

0:42:48.440 --> 0:42:51.520
<v Speaker 2>a certain amount because you want you have to allow

0:42:51.560 --> 0:42:54.520
<v Speaker 2>the data to take you in the direction you wanted

0:42:54.560 --> 0:42:57.400
<v Speaker 2>to go. So that needs to be a certain amount

0:42:57.440 --> 0:43:00.360
<v Speaker 2>of volume, a certain amount of iterations of transactions to

0:43:00.360 --> 0:43:03.680
<v Speaker 2>to get to a statistical relevance. So there is something about,

0:43:03.840 --> 0:43:07.200
<v Speaker 2>you know, the volume that I think is critical, But

0:43:07.480 --> 0:43:09.759
<v Speaker 2>beyond that, there isn't really a cuisine type that I

0:43:09.800 --> 0:43:14.920
<v Speaker 2>would say this is prevalent towards it price point. I

0:43:14.920 --> 0:43:17.040
<v Speaker 2>think again it comes down to volume, right, So if

0:43:17.080 --> 0:43:19.840
<v Speaker 2>your average tray value is ten dollars, then that's not

0:43:19.880 --> 0:43:22.640
<v Speaker 2>going to work if you've got a million AUV. But

0:43:22.960 --> 0:43:24.799
<v Speaker 2>if you're a Chick fil A, then why not right,

0:43:25.080 --> 0:43:29.040
<v Speaker 2>so that it could work for them very well. The

0:43:29.080 --> 0:43:31.799
<v Speaker 2>other way I would look at it is thinking about

0:43:31.800 --> 0:43:34.560
<v Speaker 2>how you can build the tray valley. Right, So maybe

0:43:34.640 --> 0:43:37.400
<v Speaker 2>the entree prices don't change that much, but if you

0:43:37.440 --> 0:43:39.960
<v Speaker 2>find there's a certain particular time of day where you're

0:43:39.960 --> 0:43:43.359
<v Speaker 2>getting less attachment rate of beverages or desserts or appetizers,

0:43:43.600 --> 0:43:47.000
<v Speaker 2>then maybe use that to reduce those ancillary items to

0:43:47.000 --> 0:43:49.520
<v Speaker 2>build your tray value. Right, So there are different ways

0:43:49.520 --> 0:43:52.600
<v Speaker 2>to approach it, and at the moment we haven't found

0:43:52.600 --> 0:43:56.400
<v Speaker 2>a particular cuisine site that hasn't necessarily worked better or

0:43:56.400 --> 0:43:59.400
<v Speaker 2>worse than another. I think ultimately it's about trying to

0:43:59.400 --> 0:44:02.640
<v Speaker 2>see what resins with customers and using that gradual approach

0:44:02.680 --> 0:44:04.640
<v Speaker 2>to ensure that we don't create any stick of shock

0:44:04.880 --> 0:44:06.280
<v Speaker 2>and no negative guest sentiment.

0:44:07.480 --> 0:44:10.520
<v Speaker 1>Yeah, very cool. You know, I'm interested to see what

0:44:11.600 --> 0:44:14.200
<v Speaker 1>it could do, right in terms of maybe even in

0:44:14.320 --> 0:44:16.960
<v Speaker 1>out the volume in a day, Maybe some more price

0:44:17.000 --> 0:44:20.360
<v Speaker 1>sensitive customers could trade down from a dinner to like

0:44:20.719 --> 0:44:25.240
<v Speaker 1>a mid afternoon discounted meal or something of that nature,

0:44:25.320 --> 0:44:27.800
<v Speaker 1>and kind of maybe ease some pressures on the kitchen

0:44:27.840 --> 0:44:28.600
<v Speaker 1>and stuff like that.

0:44:28.880 --> 0:44:31.280
<v Speaker 2>Nothing would please me more than to see the customers

0:44:31.320 --> 0:44:35.000
<v Speaker 2>train themselves in this. I think it would be amazing. Imagine,

0:44:35.160 --> 0:44:38.279
<v Speaker 2>imagine if restaurants are able to encourage their customers to

0:44:38.280 --> 0:44:40.440
<v Speaker 2>recognize if they order ahead, they can get a bit

0:44:40.440 --> 0:44:42.759
<v Speaker 2>more value. What if you could just move the order

0:44:42.880 --> 0:44:45.120
<v Speaker 2>volume from six pm to five pm? And what that

0:44:45.160 --> 0:44:48.839
<v Speaker 2>could do. If you treat a restaurant kitchen like a

0:44:48.840 --> 0:44:51.839
<v Speaker 2>factory and think about it from that standpoint, then actually,

0:44:51.880 --> 0:44:53.680
<v Speaker 2>there's so much money on the table. I mean, in

0:44:53.719 --> 0:44:56.440
<v Speaker 2>many ways going back to virtual brands, that's what the

0:44:56.480 --> 0:44:58.960
<v Speaker 2>logic of you know, an ihop having a virtual brand

0:44:59.120 --> 0:45:01.960
<v Speaker 2>doing things in the even and not during the breakfast rush. Right,

0:45:02.000 --> 0:45:03.640
<v Speaker 2>So it's all of this is about how do you

0:45:03.719 --> 0:45:05.880
<v Speaker 2>utilize and sweat the acid as best as you possibly

0:45:05.920 --> 0:45:07.280
<v Speaker 2>can in the most optimal manner.

0:45:09.200 --> 0:45:11.439
<v Speaker 1>Awesome, man, Well, I'm gonna end it there. I could

0:45:11.440 --> 0:45:15.000
<v Speaker 1>ask you questions all day once again, if you haven't

0:45:15.600 --> 0:45:20.319
<v Speaker 1>the books delivering the digital restaurant, they're absolutely fantastic. And

0:45:20.360 --> 0:45:24.600
<v Speaker 1>where can listeners find out more about Juicer? And where

0:45:24.640 --> 0:45:26.560
<v Speaker 1>should where should they go to purchase the books?

0:45:27.120 --> 0:45:30.280
<v Speaker 2>I'm glad you asked the books. Well, if you support

0:45:30.320 --> 0:45:33.120
<v Speaker 2>third party marketplaces, you can go to Amazon of course,

0:45:33.120 --> 0:45:35.200
<v Speaker 2>where you can get a kindle me read you the

0:45:35.200 --> 0:45:38.920
<v Speaker 2>book on audible or how back paperback. If you'd like

0:45:38.960 --> 0:45:42.400
<v Speaker 2>to find out more about Juicer, hook me up on LinkedIn,

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<v Speaker 2>but also go to juicerpricing dot com. We'd love to

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<v Speaker 2>hear from you and listen to about your stories about

0:45:47.440 --> 0:45:49.520
<v Speaker 2>how you price and how we can perhaps help all.

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<v Speaker 1>Right, good stuff, Thanks again for doing this, and thanks

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<v Speaker 1>to all the listeners. Have a good day, everybody

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<v Speaker 2>Two