Friday, June 02, 2017

Panera Bread, Technology, and Wait Times: The Value of Prototyping

Popularity can be a blessing and a curse for fast casual and fast food restaurants.   Naturally, these chains want as many customers as possible to frequent their locations.  However, customers will become disenchanted very quickly if the wait times become lengthy.   The easy way to solve these issues is to open more locations.   You can't continue to do that forever though.  You have to be able to drive same-store sales, and you must address wait times in order to maintain the customer satisfaction necessary to achieve that revenue growth.  

Panera Bread faced this issue in recent years.  They tackled the problem head-on with a number of initiatives, including the use of technology.  The Wall Street Journal discusses their strategy in an article today titled, "How Panera Solved Its Mosh Pit Problem."   Mobile ordering became a key part of Panera's strategy.   They have done an amazing job with the Panera app, and the mobile ordering system put in place along with that app.  As a frequent customer, I find the mobile ordering system simple, easy-to-use, and very convenient.  I often will order on my phone when I leave my office or home, and I can simply walk in and pick up the order from a shelf near the entrance as soon as I arrive at Panera. Payment is already taken care of via the app.  

How did Panera develop such an effective system?   They prototyped, and they iterated many times.  They used a prototype store in Braintree, Massachusetts as their testing ground.  Even the top two executives spent a great deal of time watching how workers and customers interacted in this location.   They didn't settle quickly on one solution, devised in a boardroom somewhere. They listened to feedback, and they adapted based on that feedback.   What a great innovation story! The article describes the approach, led by CEO Ronald Shaich and President Blaine Hurst:

The chain opened a prototype Panera in Braintree, Mass., to test all elements of “Panera 2.0”: self-order kiosks, delivery, digital ordering and a new practice of bringing food to customers’ tables.  Messrs. Shaich and Hurst spent about 100 hours a week in that Braintree cafe observing what would work.  Easing the ordering bottleneck by taking orders online, instead of at the counter, wasn’t enough: The kitchen had to be able to handle the volume. Allowing customers to place orders themselves led to more customization, but also more staff mistakes. The company revamped the way employees process orders in an effort to minimize errors by simplifying the kitchen display systems.  “It was literally hundreds of these little things that we did,” said Mr. Hurst, who became company president last year after holding several other executive positions with Panera.

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