Why Curbside Pickup Is Here To Stay—Even After The Pandemic Ends
Roseville, Minnesota, A customer waits in her car for her roadside contactless pickup order … [+]
Education Images / Universal Images Group via Getty Images
Roadside service is certainly nothing new. Casual restaurants like Applebee’s and Outback Steakhouse have been squeezing quite a bit of juice out of this canal since the early 2000s.
Undoubtedly, the casual dining segment has cornered the roadside market, providing a convenient and quick opportunity for fast food weary consumers. However, Covid-19 has changed that. Curbside is everywhere now as restaurants, including those with drive-thrus, are sprinting to find more access points to make up for closed dining rooms.
Will the curb remain after things return to normal and dinner resumes?
During a presentation last week at the JP Morgan Gaming, Lodging, Dining and Recreation conference, Starbucks SBUX CFO Pat Grismer said roadside pickup is one of the chain’s key initiatives driving its future US recovery
“We see roadside collection as a key enabler for our longer term recovery,” he said, adding that the roadside currently exists in about 800 stores and will more than double in the next few months. “Roadside pickup is so important because it gives customers another option. I don’t want to get on the thoroughfare. I placed my order on my phone. I can easily drive to a parking lot designated for collection and the partners bring my order to me. It works wonderfully. This relieves the traffic and takes more account of customer demand. “
Interestingly, Grismer said that Drive-Thrus stores are where the roadside chain does business, meaning the canal complements, rather than cannibalizes, a critical access point.
This is not surprising to Lisa van Kesteren, CEO of the market research company SeeLevel HX, which has been publishing an annual drive-through study for around 20 years.
“[Curbside] is an additional channel to get more traffic brands need and some people prefer it, ”she said. “The main advantage of Curbide is the ability to order in advance, which shouldn’t lead to waiting. Customers don’t like to wait in line. The curbside perception is that they come first because they don’t see anyone in front of them and that their food will be hotter and fresher. ”
Covid-19 has undoubtedly made this habit possible as brands like Panera PNRA, Taco Bell, Wendy’s, Burger King, and Shake Shack SHAK spend their time and money on the roadside business. According to SeeLevel HX and Bluedot’s recently published The State of What Feeds Us report, 50% of consumers use the curb more or much more than before the breakout.
It took Panera seven days to get its curb canal up and running. In just a few weeks, Curbside was recording 5% of Panera’s sales compared to about 15% of the Rapid Pick-up business launched about five years ago. This is promising enough for CEO Niren Chaudhary to predict that Panera will play on the roadside for the long term, as he said in a May interview.
In fact, there seems to be some liking here.
For starters, Curbside can allow these brands to serve more customers at the same time, which is good for both impatient customers and sales. Second, the curb reduces the volume stress with a full drive through, which saw visitor numbers increase by 26% in the April, May and June quarters alone.
“Drive-thru’s get very, very busy, and waiting times can be long at peak times during the day. The more they can dilute the waiting time on a channel and the more they can use different channels, the more money they make, “said van Kesteren.” The drive-thru also has a limited number of orders that it can take and serve, so it’s one after the other. Carryout can be placed by many customers and they can all pick up at the same time, so there are fewer bottlenecks. ”
Perhaps this is why Wendy’s is focused on the roadside. The chain has pulled about 90% of its business from drive-through since the COVID-19 outbreak. During the second quarter, Wendy’s CEO Todd Penegor said the company will continue to work on initiatives like roadside, adding, “We know customers need a smooth experience as we move forward in a post-Covid world.”
It is important to note that the curbside is not just done at the push of a button. Most of the brands that have successfully added the channel in the past six months have a robust mobile app that makes the ordering process easy. If such an infrastructure is already in place, it makes sense to add another access point. That seems to be the motivator of Burger King parents Restaurant Business International.
“For our guests who cannot access our Drive-Thrus, we are introducing new pick-up options on the roadside for our mobile apps. [Curbside] This is an additional opportunity outside of the company, “said RBI CEO Jose Cil during the company’s second quarter, adding that the channel offers long-term growth potential.
Brands have been slow to build their apps over the past few years, but – like everything else in this business – COVID-19 has accelerated their use. In fact, 49% of customers downloaded more than two or more apps during the pandemic.
Therefore, brands that have an app are investing even more in order to use the curb canal efficiently in this area. Dunkin ‘is a good example here. During the company’s Q2 call, CEO Dave Hoffman said his investment in integrating the Dunkin ‘app internally has enabled the team to make changes faster than ever, including rolling out Curbide.
“We’ve introduced new roadside features to the app for every franchise that so wishes, and added a more complex roadside order flow for customers,” he said. There are now more than 1,400 Dunkins offers on the roadside.
Shake Shack has also just started picking up the roadside in its app. The channel is expected to be live at around 50 Shacks by the end of the third quarter.
“It’s very early, but we’re encouraged by the initial results and the convenience this brings for our guests,” said CEO Randy Garutti during the company’s second quarter.
Shake Shack adds curbs by adding walk-in windows, pickup areas, and drive-thrus at the same time, underscoring the criticality and long-term profitability of off-premise.
“We hope to create access in places where we may not have had access before,” said Garutti. “[Curbside] has grown a bit every day. People find out every day. We didn’t market it. It literally just shows up in the app … People are trying more and more every day and we are really excited about it. ”
He adds that the channel is safe, which is just as important as convenience right now. There’s also the added benefit of being a high-margin channel, at least when compared to delivery. These notoriously high delivery charges are not used on roadside orders as they exclude the middleman – the third-party delivery company. This is perhaps the biggest driver behind the broadcaster’s growth.
“Delivery is becoming more and more expensive and that costs a toll. The curb is not only cheaper, it also arrives at your dining table rather hot, as there are not two stops ahead of you, ”said van Kesteren. “Some customers who have never been to the side of the road before have tried it because of COVID and found they really like the convenience. It’s efficient and simple, and has less risk of exposure to germs. I think it will stay. “