Innovation and technology are driving new retail formats


LAS VEGASEarlier this week, Shake Shack opened its first drive-thru in Minnesota. It was an about-face for the food retailer, as its CEO had said from the start of the company that there would never be a drive-thru. But about three years ago, executives began to realize that drive-thru would attract a wider audience in certain markets. Then came Covid, when grocery retailers and restaurants doubled down on this format amid the need for social distancing.

After that, the company looked into drive-thru, Carren Coston, director of ICSC and vice president of real estate and development at Shake Shack Enterprises, linked to the ICSC National Conference here in Las Vegas. “We’re opening two over the next two weeks and we’ll have quite a few next year,” she said in a panel session.

Like everything else in the retail sector, the pandemic has left an indelible impression on the restaurant concepts and formats of the sector. Drive-thru services are available; is therefore to take away. Gastronomy was, for a while, out. Fast casual is the order of the day. Some of these trends will reverse as the pandemic one day abates, but others seem here to stay, such as Shake Shack’s adoption of drive-thru. In fact, the company is also considering other formats, Coston said, like small restaurants, maybe without seats. “We have a lot to learn from the drive first. ”

The Kitchen United business concept is another trend that gained traction and then accelerated during the pandemic. It serves restaurants for off-site meals, explained panelist Atul Sood, chief commercial officer.

We work with malls, grocery stores and we also look at food halls. We aim to launch 10-12 kitchens or restaurants in the same establishment serving different types of cuisine and we see ourselves as equipment. The advantage for its customers: access to a large customer base in a small neighborhood.

Technology gives the advantage

As these businesses grow, they are made possible through investments in technology, some of which were made before the pandemic. Shake Shack, for example, has reinvested in its global platforms to make collecting food as easy as possible, Coston said. “On the digital side for us, it’s about making the drive a different experience. A big part of our investment is in our menu boards and the technology that proofreads the orders to make sure there is consistency. We also pre-order through an app. As many orders as we can place, that’s ideal.

Kitchen United, too, relies heavily on technology, which it itself has developed, Sood said. Indeed, its technological platform is a de facto source of income for the company. “Our average order is around $ 60 because people order cross concepts. All delivery people lose money with every order. $ 35 is maybe the threshold where it becomes profitable, ”he said.

“When you have 12 different restaurants under one roof, you have to make sure that everything is prepared and comes out at the right time so that our technology controls all of those orders according to the customer’s needs. “

More convenience

These investments in new technologies and formats will fuel another larger trend that panelists are seeing on the horizon, which is increasingly convenient for the customer and getting food to them as quickly as possible. Existing brands strive to meet this premise, just like new ones in the market.

“I think the next big brands across the country are being created,” Sood said. “They are faster and more agile. Many of them will be multi-format. Lots of smaller spaces, less room for customers to sit and dine. New ways to get in and out. I’m betting on a lot more ghost kitchens.

On the other hand, the Red Robbins of the world, with their grand halls and dining rooms, may well disappear, he continued. “I think people don’t want that anymore,” although he thinks full service will make a comeback. Full Service is “waking up to capture some of the market share that fast casual has taken over the past decade. Some of the things they do with virtual concepts are quite innovative.

At the same time, restaurants are wary of the pendulum swinging too far in any direction. “We are looking to have a balanced portfolio,” said Coston. “We are not trying to be a full-fledged company. We do not want [our restaurants] be backed up in a line of cars on the street.

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