Why Menus Matter
As we come upon 2021 and the one-year anniversary of the COVID pandemic, our experience and research indicate that menus matter. Delivering on evolving customer expectations and quickly changing market dynamics will require restaurants to have a good handle on menu mechanics and integration with technology.
In This Article
Consumer demand for restaurants and hospitality have shifted in countless ways over the last five years. The COVID pandemic has put that shift into hyperdrive, and brands across every category and size have invested to improve consumer-facing experiences. In order to remain viable with customers and maintain market share, these brands face new challenges that extend deeper into the store’s operations and digital ecosystem.
Beneath the surface, in order to prepare for the long haul brands are focusing their attention on streamlining the ordering ecosystem between stores, eCommerce platforms and third party partners that specialize in logistics and last-mile delivery.
As we come upon 2021 and the 1 year anniversary of the COVID pandemic, our experience and research indicate that menus matter. Delivering on customer expectations and the ability to quickly pivot to the next wave of evolution will require restaurants to level-up on internal mechanics around menu management and order orchestration. In order to deliver year-over-year unit growth, brands will desperately look for levers to drive incremental traffic, returning customer trips and improved store financials.
Having a good handle on menu mechanics and integration with technology will be critical for the ongoing success of restaurants looking to grow sales or improve market position.
Consumers demand choice, safety and accuracy
The convergence of consumer safety concerns and digital convenience further amplifies the need for restaurants to have digital ordering channels be in lockstep with the store. In place of someone taking your order from across the counter, the customer is expecting they should be able to place an order through a website, mobile app or in-store kiosk with the same accuracy, if not better. This is the customer expectation across all retail.
Unlike traditional eCommerce systems that have clearly defined and reliable SKU based inventory and order management systems, restaurants offer variations of products which adds a significant layer of technical complexity.
For example, the same menu item:
- Might be able to be modified or customized, but in a controlled and deliberate way. Some toppings are allowed, yet others may not be.
- Price may include a set number of modifications — such as an associated sauce or topping, but upcharges for additional toppings.
- Maybe part of a combo meal, which when paired with other items results in a different menu item and price together.
- Subject to different taxation rules or bottle deposit requirements in different locales.
- Customer dietary restrictions or preferences might need to be stringently adhered to throughout the preparation and packaging process.
Defining the base menu and the associated rules was largely sufficient when stores ran standalone registers using paper-based ticketing systems. The introduction of digital ordering ushered in a new level of complexity to the restaurant technology ecosystem, in which the back of house preparation (kitchen display) must be kept in sync with the customer’s orders whether that be in-store, drive-thru or online.
Restaurants that have more complex business models or restaurant technology aspirations have additional considerations to contend with:
- Schedule based menu availability (eg. breakfast items only before 10 AM).
- Digital Menu Board integration.
- Promotional offerings, such as digital loyalty or coupons.
- Product supply chain restrictions or product recalls (eg. Contaminated or shortages).
- “Secret Menu” offerings.
Bottom Line: Customers expect they can place the same order through the digital channels as if they walked into a store and expect to receive the same (or better) level of service. This is why menus matter.
Corporate control with local flexibility
Not every restaurant struggles with menu complexity — some brands have designed their menus with simplicity in mind, or have allowed the store to operate with few restrictions. For brands with fewer than 1,000 units, the effort to roll out a new menu item may be manageable without a lot of effort. For these restaurants, the absence of an established technical solution for menu management does not pose a significant risk.
For many restaurant brands in excess of 1,000 units, they struggle with striking the right balance between controls and flexibility. This concept of a common menu but with localized adaptations is a very common pattern across technology projects, and the restaurant category is no different. In our experience working with franchise focused, multi-unit restaurant companies with unit counts > 1,000 the recurring requirement is that restaurant technology must be easy to use for the local restaurant operator, but allows corporate to reclaim control of the menu. Building a system that satisfies both requirements hinges on the design of the menu.
The value proposition for corporate-level control includes:
- Maintain brand consistency and merchandise product that is actively being promoted.
- Optimize menu item pricing, based on what makes sense for the brand and with strategic market pricing considerations.
- Ability to perform data analysis on product sales and demand-based forecasting.
- Track materials inventory and proactively manage the supply chain.
The local restaurant operator is looking for the ability to:
- Honor promotional pricing for local store marketing efforts.
- Flexibility to upcharge more/less for modifications or toppings.
- Make product substitutions in the case of products being unavailable.
- Publish menu changes regularly to digital ordering channels, including owned and third party service providers.
Technology solution providers in the market today offer bolt-on Menu Management applications that work exceptionally well when paired with the provider’s native platform. While this is an attractive option for many, this approach quickly leads to “vendor lock-in” whereby the cost or inconvenience to move to another platform is prohibitive. Restaurants should be positioning themselves for future growth, and proactively mitigating the risk of near term decisions that create long term restrictions.
Bottom Line: Organizations with aspirations to grow to > 1,000 units and operate with a franchise-based model should not overlook the long term implications of how they structure their menu, and the cascading system complexities as that menu evolves over time.
Treat delivery like a valued partner
Delivery service providers (DSP) are here to stay, at least for the foreseeable future. Companies such as DoorDash, GrubHub (Takeaway.com) and UberEats/Postmates are actively in growth, investment and acquisition mode. These companies are investing in their technology offerings, paying to acquire new customers and striking new deals with restaurants — all in order to make their balance sheets look more attractive.
DSPs understand that amidst a pandemic there is plenty of market share to go around. Even brands who own their delivery experience have conformed to the shift in customer expectations and have a presence on the delivery marketplaces. DSPs can act as a force multiplier if managed correctly, and it is possible to have a mutually beneficial relationship — but it all starts with the menu, which drives customer choice and ordering efficiency.
- Items available to customers through the DSP must actually be available at the store.
- Delivery workers favor speed and convenience at the store, which ultimately drives customer satisfaction.
- The ability to customize or modify orders through the DSP should be accurately reflected on the order ticket and ultimately delivered to the customer.
- Pricing must be competitive even amidst giving up margins to DSPs.
Brands who do not have the internal mechanics to manage their menu, pricing variability or out of stocks will either opt for a very simple menu through the DSP or quickly find themselves underwater in managing the complexities. Mis-management of the menu across the DSP and the store can have a significant lasting effect on the customer’s experience, and could potentially downgrade the restaurant in the eyes of the customer and the service provider.
Bottom Line: In a quickly evolving digital restaurant ecosystem, a restaurant’s ability to make quick decisions to improve market positioning is directly connected to how nimble they can be with managing their menu. Adding new menu items or on-boarding a new delivery service provider may consume significant resources and present tremendous risk for a brand that is not prepared to scale.
What is a restaurant brand to do?
The majority of brands and restaurants may not face the challenges described. Creating a menu and configuring within the store is likely one of many one-time setup tasks, so the pain point may lay dormant for a while. But for a restaurant brand looking to grow, there will come a time when they will face the challenge of launching new menu items, roll out new pricing, improve eCommerce ordering or rapidly grow and launch new stores.
For brands who overlook the need for a robust technical strategy for their menu, they will likely encounter pain points such as:
- Unexpected fragility when making any type of menu change — items missing, prices incorrect, inability to customize or modify commonly ordered menu items.
- Long configuration cycles for changes that might seem, turnkey — adding a new modifier/sauce, removing a menu item, launching a promotional offer, recipe changes.
- Unnecessary customer friction stemming from digital or delivery orders due to order accuracy, dropped orders or speed of service.
How can we help?
The challenges that underpin growth are exactly the types of problems that we like to tackle for our clients. Other solution providers and agencies can provide a point of view on narrowly scoped challenges — we tackle the challenges that have far-reaching implications that those that seem insurmountable.
At its core, effective menu management during a time of COVID represents the convergence of two opposing forces:
- Physical & Digital — How can menu technology enable a more seamless experience while customers interact with my store personnel (or not interacting at all) within my store?
- Business vs. Technology — How can menu technology enable speed, incremental profitability or reach new audiences to enjoy the latest menu item?
- Strategy vs. Execution — How can menu technology simplify operations for store personnel and yet provide valuable insights to make timely and actionable decisions?
Our WWT Digital practice has worked with brands of different sizes and at various stages across their digital transformation journey. Working within our experience has informed our approach — which we know is not a “one size fits all” — and the strategy is fueled by the brand’s business objectives and desire for technology to drive organizational and operational change.
Addressing the near-term need for contactless or delivery service options amidst a pandemic may be the near-term imperative, but the long term priority should be establishing a menu architecture that is compatible, predictable and flexible across the myriad of ordering channels and scalable for future business needs. Restaurant technology offerings and the digital ecosystem has evolved significantly in the last 12 months.
Every brand should be proactively evaluating how their current menu design impacts business performance today and opportunities for future growth — at the end of the day, menus matter.