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The Spoon

Daily news and analysis about the food tech revolution

mobile ordering

Ordrslip Adds Postmates Integration to Its Mobile App Software for Restaurants

Restaurant tech company Ordrslip announced today it has partnered with Postmates to add delivery integration into its mobile app software, according to a company press release sent to The Spoon. Per today’s announcement, Ordrslip’s software lets restaurant customers “create custom-looking whitelabel mobile ordering applications via Ordrslip.”

It’s no secret that, since the pandemic pushed the restaurant industry to off-premises formats, usage of mobile apps for ordering and payments is on the rise. It’s also pretty commonly known at this point that sophisticated apps a la Starbucks are far too expensive and resource-consuming for most independent restaurants and chains to create themselves. Hence the growing selection of tools (see below) various third parties offer to get restaurants the digital properties they need without decimating their already decimated margins.

The Ordrslip approach is this: Ordrslip creates a branded mobile app for the restaurant with all the features needed to fulfill pickup and delivery items, including order-ahead capabilities, payments, iOS and Android compatibility, POS integration (only with Square and Clover for now), and order tracking. You can read the full list of features here. The app looks and functions as if it belongs to the restaurant but is powered by Ordrslip’s softare in the background. As of today, there is the option to add Postmates integration in order to fulfill the last-mile delivery end of the operation.

The promise is that by using Ordrslip with the new Postmates integration, restaurant customers can bypass the controversial per-transaction commission fees they normally get charged by third-party delivery services. Ordrslip pricing is $100/month per location or $1100/year per location, with one-time setup fees of $1,000 and $750, respectively. (The setup fee applies to all locations a restaurant might operate.)  

On the one hand, those are high numbers for already struggling restaurants, which would have to be doing enough delivery to surpass $100/month in commission fees per transaction. On the other, there’s a pandemic happening and folks are staying at home and ordering more delivery. In other words, $100 in commission fees to Grubhub Et al is probably on the low end these days, though restaurants still have to pay some commission to Postmates for delivering the order.

Ordrslip is one of a growing number of companies offering restaurants workarounds to 30 percent commission fees on delivery orders. POS platform Toast, ChowNow, and many others have various tools in the market that let restaurants process orders and payments through a separate platform so they only need to use the delivery service for actual deliveries. Another company, ShiftPixy, bypasses delivery services altogether and provides the drivers itself. And even the delivery services themselves are participating in this trend. Uber Eats is piloting a tool that lets restaurants process orders through their own platforms, though Uber Eats retains the customer data.

Uber Eats also just announced its plans to buy Postmates for $2.65 billion, a deal that is expected to close in the first quarter of 2021. That deal is unlikely at this point to affect a partnership like the one Ordrslip announced today.

Denny’s Off-Premises Sales Have Almost Doubled Thanks to the Pandemic

Denny’s announced on its Q2 earnings call this week that average weekly sales for off-premises orders have almost doubled since the start of the pandemic, from $4,000/week in February to $7,900/week in July.

Like other restaurants that have historically been known for their in-dining room experiences, Denny’s found itself having to quickly pivot when the pandemic hit. Speaking on the call, John C. Miller, CEO of the Spartanburg, S.C.-based chain, outlined the ways in which his company has adapted to the changes.

Those efforts included continued focus on Denny’s long-established Denny’s on Demand platform, which allows guests to place online orders for pickup and delivery. (The chain’s menu is available through most of the major third-party delivery services.) Like others, it also added curbside pickup and, once stay-at-home restrictions began to loosen, converted areas of its parking lots and sidewalks into outdoor seating.

The reinvention of the restaurant menu is another common theme to emerge from this pandemic. And by reinvention, I mean pared down selections that allow kitchens to work more efficiently. Denny’s was no exception here, having streamlined its own menu to focus on its most popular items, and offering family-style bundles, as well.

If Denny’s story of off-premises orders saving the day sounds familiar, that’s because it’s the state of most major restaurant chains the U.S. right now. McDonald’s said it made 50 operating changes to get “pandemic ready,” many of them around digital ordering and off-premises orders. Starbucks, which saw one of its toughest quarters so far, is completely overhauling some traditional sit-down locations and turning them into to-go-centric stores. 

Denny’s itself has permanently closed some of its sit-down locations due to “unforeseeable business circumstances prompted by COVID-19.”

“This quarter has proven to be one of the most difficult quarters this country and especially the full-service restaurant industry has ever seen,” Miller said on the call. And there’s no telling what Q3 will look like, since the state of the restaurant industry changes practically every day and full recovery is dependent in part on the trajectory of the pandemic.

Six Flags Adds Mobile Food Ordering to Its Theme Parks

There is no way you could get me to go to a theme park right now. Too many people in one place, too much complacency and too many unknowns about where we are at with this pandemic.

However, theme parks across the country are pushing past their COVID-19 concerns to re-open. As they do, they are implementing new procedures to create social distancing and minimize viral transmission as much as possible. Part of those procedures is mobile food ordering.

Six Flags announced last week that it was rolling out mobile food ordering and contactless payment across all of its parks. Guests just need to download the Six Flags mobile app, which allows them to choose their restaurant, place their order and pay. The app then gives them pickup instructions.

Six Flags isn’t the first to offer mobile ordering. Disney theme parks, which haven’t opened to the public yet, have reportedly expanded their mobile ordering and contactless payment options as well. And for a while there, it looked like Disney was even thinking about delivering its food to the front door of annual passholders.

Beyond theme parks, mobile ordering and contactless payment are quickly becoming table stakes for any restaurant. Fears of becoming a coronavirus hot spot have restaurants doing extra scrubbing and removing contact points that lots of people touch.

In places like theme parks, which involve masses of people and lines, I also wouldn’t be surprised to see the implementation of something like WaitTime. WaitTime uses computer vision and AI to monitor room occupancy (so there aren’t too many people in one room), and can measure crowd densities so establishments can map out where they need to thin people out.

Despite mobile ordering and contactless payments, studies show people are still wary about going back to restaurants (I get it!). If they do go back to theme parks, it won’t be because they can suddenly order a churro from their phones. But if they can’t resist the siren song of roller coasters this summer, perhaps it will get more people more to adopt mobile ordering and use it across more restaurants.

Allset’s Tech Gives New Meaning to the Concept of Quick Service in the Restaurant

Not so long ago, the idea of ordering your food before you got the restaurant then sitting down in the establishment’s dining room to eat it felt unnecessary. Why go to a restaurant dining room at all if you’re in that big of a hurry? Why not hit the quick-service chain down the road if you’re that badly in need of quick service?

Flash-forward to now, and being able to order ahead is becoming a must-have for restaurants, in or out of the dining room.

This is what Allset, a company based out of San Francisco, wants to address. In addition to currently offering a bundle of contactless features restaurants can use during this current restaurant industry upheaval, the company also allows customers to order food ahead of time for any type order, whether they’re eating in the dining room or taking it to go.

More than ever, restaurants are finding they need to offer high-tech order-ahead features for both in-house and off-premises meals, and that both speed and minimized human-to-human interactions are important parts of that process. Some companies — third-party delivery services and a slew of restaurant-tech products — offer these things for pickup and delivery orders, but they typically come at a high cost and don’t include any solution for the actual dining room.

Allset doesn’t have any significant competitors when it comes to offering a package that addresses every restaurant experience, which is probably a big reason demand for the service is up. Over the phone this week, CEO Stas Matviyenko said the company has been busier than ever as restaurants scramble for solutions to help them navigate the new normal. “[The pandemic has] changed the way people dine, the way people want to dine. The way restaurants have to serve people [has] changed dramatically.”

Allset, which was founded in 2015 by Matviyenko and Anna Polishchuk, started as a service for dine-in restaurant experiences. Users could choose a restaurant via the Allset app, order and pay for their meal ahead of time, and have their meals ready within about five minutes of their being seated at the restaurant. The company added a takeout component to the business in 2019, a fortuitous move considering the entire industry went off-premises a few months ago. 

As Matviyenko explained to me, Allset was actually working with a contactless pickup solution before the pandemic hit. Seeing inefficiencies in the usual pickup order process — flagging a staff person down to notify them of your arrival, waiting around for the order — the company started offering a way for restaurants to streamline that process. The “ideal” experience, he said, would be for a customer to order and pay for their meal, find their food in a designated pickup area, and be able to grab it and go without ever interacting with staff. Allset actually raised $8.25 million to further develop this concept at the end of March, just as dining rooms were shutting down.

But just because the industry is leaning heavily on off-premises nowadays doesn’t mean Allset is forgetting about the dining room. Matviyenko suggests that a technology like theirs is actually more important nowadays. Restaurants — which have always operated off thin margins — now have to contend with lower sales because of reduced capacity requirements in their newly reopened dining rooms. They will want to turn tables faster in order to get more transactions on a day-in, day-out basis, and one way to do that is to cut down the time a customer has to wait between sitting down and actually getting their food. As well, there are people who would just prefer to grab a quick bite for lunch without eating it from a takeout box, and this is an area Allset has always served. 

It doesn’t hurt that the restaurant menu format is also changing, thanks to reopening guidelines that suggest businesses use digital menus. Baking pre-order into that digital format seems just mere steps away, rather than the giant leap it would have been pre-pandemic.

Currently, Allset is waiving all commission fees for restaurants, and the app is free for customers to use. Matviyenko said since the COVID-19 crisis began, they’ve been getting much more interest from restaurants large and small. Moving forward, he says he expects to see the company grow much faster than before.

CardFree’s Streamlined Platform Hints at the Restaurant Tech Stack of the Future

We’ve said it before, we’ll say it again: in today’s pandemic-stricken restaurant industry, restaurant tech companies have to fight hard to stay relevant, and only those solutions that can help restaurants make their digital operations truly efficient will be left once the fallout is over.

CardFree, a company based in San Francisco and something of a restaurant tech vet, is hoping to make the transition to digital easier for restaurants. The company makes an all-in-one mobile merchant platform that integrates digital ordering and payments, coupons, and loyalty programs into a restaurant’s existing setup. It also offers a pay-at-the-table function that uses a customer’s own mobile device, rather than a tabletop kiosk (aka germ repository). It also recently added a new way for customers to process payments — not through any earth-shattering new technology but via some good old-fashioned SMS messaging with its new text-to-pay function.

The company was founded in 2012, a time when the concept of mobile payments via a smartphone was first gaining attention and many wondered if the credit card would disappear entirely. It didn’t. In fact, CardFree’s CEO and cofounder Jon Squire told me over the phone this week that the company saw “early resistance” even to pay-at-the-table concepts, where a user processed the payment themselves instead of handing over a credit card.

As global health crises do, though, the COVID-19 pandemic changed everything. Digital orders were up 63 percent in March, according to NPD Group, and one recent survey found that 73 percent of consumers ordering takeout and delivery said they would be more inclined to get takeout (over delivery) if the experience were contactless. Meanwhile, the National Restaurant Association’s restaurant reopening guidelines clearly state that “Contactless payment systems, automated ordering systems, mobile ordering apps, website updates and simple texts can help you to communicate and conduct business with reduced need for close contact.”

CardFree’s platform is one of many out there offering tools to make the restaurant experience more contactless. A restaurant can choose one or more of the technologies the company offers (mobile ordering, payments, etc.) and add to the stack over time. Squire said that of all the technologies out there, mobile ordering itself is probably the most important one for restaurants to add right now, though in terms of a solution, “You’re going to want something you can expand.”

As I mentioned above, that expansion might include some SMS messaging. CardFree has launched what it calls a pay-to-text feature, where customers call in a to-go order and can receive a link via SMS to pay for their meal. This is less cumbersome than reading a credit card number over the phone, and more sanitary than passing one between customer and cashier at the actual restaurant.

“Almost all the folks we’re working with are taking the person’s cell phone number as part of the order process,” says Squire. Once the phone number hits CardFree’s system (which is integrated with the restaurant POS), the user receives a text with a link they can click through to pay using Apple or Google Pay or their credit card:

Squire said that of the restaurants he’s talked to, many still see “about 60 percent” of orders placed ahead of time come via a phone call to the restaurant, not placed through a digital property like a mobile app. Finding a way to make the telephone experience more contactless from start to finish will be important going forward. That said, not many restaurant tech solutions pushing “contactless” bundles currently offer any kind of feature that addresses phone orders. That gives CardFree something of a leading edge here.

Squire doesn’t necessarily believe the pandemic and seismic shifts in the restaurant biz will render the credit card obsolete, as some have suggested. Of going “card free,” he said “Doing it’s our name and we’ve been doing it for 10 years and [credit cards] still exist. I’m reticent to say they’ll go away.” 

Regardless, restaurants will need to go more digital, even if they’re accepting credit cards. And to help make that possible for cash-strapped businesses that are currently lucky to keep the lights on, CardFree has been giving away its products for free for small-to mid-sized independent restaurants. While there is technically a three-month time stamp on the free period, Squire suggests that’s a fluid deadline where certain restaurants are concerned. For CardFree, which has historically worked with enterprise-level brands, this is a way of helping the whole restaurant industry stay afloat, not just mainstream chains.

As Squire said, “It’s been helpful to know [we’re] doing something to push this in the right direction.”

Swipe Right for Double Guac, Chipotle Just Created a Virtual Assembly Line (Other Restaurants Should Too)

As restaurants slowly reopen with reduced capacity and more emphasis on takeout orders, one thing we will see more of is restaurant chains using tech to better customize meals purchased through mobile apps. So it should come as little surprise that Chipotle, a company known for its digital-forward business model, just released a bunch of new customization features to its app that effectively recreate the assembly line experience customers get in brick-and-mortar locations. The company announced today its Complete Customization Chipotle app, which lets customers get pretty granular about ingredient preferences and portions in their meals.

To be clear, Chipotle hasn’t released a brand-new app; all updates are to its existing one, and nothing’s changed about the way customers sign in and access menus, loyalty points, etc. Changes are more about the way customers select and customize their meals in the digital format, which Chipotle seems to hope will mirror the real world experience as much as possible.

Chipotle’s in-store format has always involved customers moving down an assembly line-style setup, dictating to staff what they want in their burritos and/or bowls, how much they want of each ingredient, and any other special instructions. The setup has always made it super-easy to customize a meal — at least, so long as you ordered that meal in the store. Up to now, the Chipotle app has been somewhat limited in terms of customization.

The features released today change that. Customers can now swipe left and right in the app to designate how much of each ingredient they want with their meal. For example, meat portions can be single or double and ingredients like salsa and sour cream can be “normal,” “light,” or “heavy.” In general, the app is now just easier to use.

While on the surface these might appear to be small changes, they actually suggest how certain restaurant types could survive in a post-pandemic restaurant industry. Per state reopening guidelines, person-to-person contact should be minimal as possible, and long lines of people waiting for their turn at the assembly station will be frowned upon if not outright banned. Offering the digital equivalent will let customers order exactly what they’re used to getting from the chain while still satisfying the requirements for social distancing.

Digitizing the assembly line is also a way for Chipotle to drive more orders to its app, which is important for a company with a future tightly tied to its digital business. That digital business surpassed $1 billion in sales in 2019, and Chipotle has also recently introduced new store formats (walk-up locations, drive-thru lanes) that lend themselves to digital and off-premises ordering. The pandemic hasn’t slowed that growth. Chipotle reported its highest quarterly level ever for digital sales on its Q1 2020 investor call in April. “As people started to implement social distancing, we moved swiftly by driving further investments toward digital and delivery designed to reduce friction, while increasing convenient access,” Chipotle CEO Brian Niccol said on the call. 

Advanced customization tools at QSRs and fast-casual restaurants have been a priority for some time now, with some chains — McDonald’s, Starbucks — implementing AI tools to improve personalization. But using customization to recreate in-store experiences that might otherwise go the wayside could be where customization proves itself most valuable. It’s easy to imagine chains like Subway or Blaze Pizza increasing the customization capabilities of their apps to recreate their own assembly line experiences. It might even breathe a little life back into the buffet, which is dying a painful death at the moment, by making the self-service aspect of that format virtual.

All those things cost money, which restaurants don’t have a lot of right now. Any mobile restaurant app is expensive to build in house; including sophisticated customization tools would be prohibitive for most businesses, which creates an opportunity for restaurant tech companies looking to prove their own worth in these uncertain times. 

Tim Horton’s Secures Investment to Expand Its Tech-Centric Coffee Model in China

Canadian coffee chain Tim Horton’s has secured an undisclosed amount of funding from Chinese tech company Tencent, according to AgFunder News. The company originally announced the news via a post on Weibo.

Tim Horton’s China unit will use the new funds to build up its digital assets and infrastructure as well as expand its number of locations in the Chinese market. Currently, it operates about 50 stores in that country and says the investment from Tencent will let the company hit its target number of 1,500 stores sooner than originally planned, though a specific time wasn’t named. 

Tim Horton’s first entered the Chinese coffee market in February of 2019. 

Digitizing the coffee market in China is a big business right now. Tim Horton’s faces competition from Luckin, which has always pursued a digital-first model that emphasizes mobile ordering, AI-powered self-service coffee terminals, and delivery. (Side note: Luckin is currently at the center of an accounting scandal that is raising questions about future growth.)

Starbucks is also a major competitor in China, having partnered with Alibaba’s food delivery platform Ele.me to grow its delivery footprint. Starbucks has also partnered with Alibaba’s Heme supermarkets to operate its own ghost kitchens, and launched its very first to-go-centric Express store in Beijing last year. 

Tim Horton’s new investment funds come at a time when all these companies will need to double down on their tech investments to make the coffee experience as to-go-centric as possible. The COVID-19 pandemic has placed things like contactless payment, delivery, and mobile orders into the center of future restaurant operations. Major chains that want to keep growing will need to spend more on these technologies in order to meet consumer demand for both convenience and safety, not only in China but in the rest of the world, too.

Despite a Pandemic, Chipotle’s Digital Business Keeps Growing

Chipotle just recorded its highest quarterly level ever for digital sales, according to the company’s Q1 2020 investor call yesterday. Company CEO Brian Niccol said digital sales grew 81 percent, to $372 million, representing 26.3 percent of sales during the first quarter.

Numbers include the month of March, when restaurants across the country started shutting down dining rooms in efforts to stem the spread of the novel coronavirus. The upheaval this has caused for the restaurant industry can’t be understated: everyone from small, independent restaurants to massive chains like The Cheesecake Factory have seen sales drop in some cases, and nosedive in others.

Why not Chipotle?

For one, the company has long been doubling down on its digital business, which powers off-premises orders for delivery, takeout, and drive-thru. Prior to the pandemic, Chipotle already operated a $1 billion-plus digital business. Over the last couple years, the company has forged partnerships with multiple delivery companies, revamped its rewards programs, introduced new store formats for to-go-friendly business models, and added more drive-thru lanes — “Chipotlanes” — to its locations. It helps that the chain has always offered the kinds of quick-service meals made with food that travels well.

On the call this week, Niccol suggested that in order to combat the sudden loss of dining room traffic, the company was able to accelerate its existing digital initiatives: “the majority of our restaurants are open for to-go orders, which is allowing us to successfully leverage the digital platform we put in place over the past two years.”  

He added that, “As people started to implement social distancing, we moved swiftly by driving further investments toward digital and delivery designed to reduce friction, while increasing convenient access.” 

Delivery remains the fastest-growing segment of Chipotle’s digital offerings. A partnership struck with Uber Eats in March no doubt helps, as it gives the chain access to even more potential diners. Niccol said digital order-ahead transactions were also up, “doubling from the levels seen prior to COVID.” Daily signups for the Chipotle rewards program have spiked “nearly fourfold.”

A recent consumer survey that Niccol referenced on the call said Chipotle customers would return “at a similar or higher rate than before” once the pandemic eases enough to let dining rooms reopen. Given that, Niccol said he expects the company to continue expanding unit volume, margins, and store base in the long term. 

If nothing else, Chipotle’s glowing reports of the last quarter illustrate why it’s so important now for restaurants to be running with a digital and off-premises strategy in place. For smaller businesses with shallower pockets, this of course throws a host of other issues on the table, paying third-party delivery commission fees being one of the ugliest. Smaller restaurants would also typically need to look to third-party platforms that can assist them with building and running the kind of mobile app that functions well, and also address the issue of customer data. 

Right now, most restaurants are just struggling to keep the lights on. For those that manage, pulling from Chipotle’s digital playbook is a move worth considering in the longer term. 

Curbside Bots and Contactless Everything: What the Post-Pandemic Restaurant Will Look Like

Even an introverted work-from-home veteran like me is starting to get kind of daffy during this here quarantine. But I will say that being stuck at home has given me a lot of time to think (and write) about the state of the restaurant industry, and I catch myself imagining what eating out will be like once we’re past this pandemic. So when Starbucks CEO Kevin Johnson posted a letter this week to employees about the chain’s future, it caught my attention.

In his letter, Johnson more or less said the chain is planning to reopen some of its locations and outlined a plan for doing so. To be clear: Johnson uses the words “open” and “reopen” several times in the text, but at no point promised that your local Starbucks will reopen overnight with the usual setup and operations that existed before the pandemic. 

Which is why I’m singling out Starbucks in the first place. As an international chain that has already dealt with this recovery process overseas, and as a leader in digital business and operations, Starbucks’ plans for reopening stores give us a good hint of what we can expect restaurants to look like once the process of opening the economy begins.

Pulling from Johnson’s letter as well as numerous statements and activities from other restaurants, tech companies, and governments, we put together some predictions for what the post-pandemic restaurant experience might entail.

Note that most of these predictions are around operations and the customer experience. There are a host of other issues, from labor to food waste, I’ll be unpacking those over the next few weeks, so stay tuned.

More space, fewer tables. This is less prediction and more fact, with public figures like California Governor Gavin Newsom saying restaurants will have more space between tables and fewer seats, to ensure social distancing when eating out. Separately, the WSJ noted that restaurant chains may operate at half capacity going forward, and include things like plexiglass shields between booths. That could also spell the end of buffet-style dining and family-style seating. Golden Corral, that bastion of all buffet restaurants, has closed all units for the time being. Even before state-mandated shutdowns, other businesses were nixing community seating. And grocery stores are closing down hot bars.

Lots more mobile payments. Some restaurants are already pushing customers to use their mobile apps to order and pay for food, eliminating the need to touch a kiosk or swipe a credit card. Granted, you have to have a well-designed, easy-to-use app in order to do this, which means we’ll see a surge in smaller restaurant chains developing and/or improving their own mobile experiences for customers, whether in-house or through a third-party service. I expect we’ll also see an uptick in mobile-only locations (though it’ll vary based on state laws around cashless businesses).

Curbside delivery for all. Curbside pickup was once the territory of Sonic and the odd McDonald’s location. With dining rooms shuttered these last few weeks, restaurants have had to find other ways of bringing food out. And since not all of them have been equipped with drive-thru, curbside pickup has become the default option for many. This is one of the methods Starbucks has put into practice over the last few weeks, in some cases even taking it a step further to offer “entryway pickup” for locations without parking lots.

Contactless everything. “Contactless delivery” barely existed as a phrase before China implemented it during the peak of its fight against the novel coronavirus. Now, everyone from Instacart to Pizza Hut offers it, and I doubt we’ll revert back to the old way of handing goods off between courier and customer. For contactless to live up to its name, though, brands need to think about the technical logistics behind the operation. Restaurants’ online order systems need to have the option built right into the checkout process. They should consider providing additional features, such as push notifications to alert customers when and where their order is ready. Contactless will stick around permanently for delivery and curbside orders and, when companies figure out how, probably for in-store purchases, too.

More drive-thru lanes. Austin, TX-based chain Torchy’s Tacos explained to me recently that once the chain was forced to shut down dining rooms, it quickly opened drive-thru windows in locations that had always had the feature but had never utilized it. Many restaurants set up shop in locations that were once a Wendy’s or other fast-food chain. If they haven’t already, they could utilize that space to start offering drive-thru on the regular to customers.   

Gloves and face masks for workers. Restaurants I’ve spoken with over the last couple weeks are quick to emphasize the steps they are taking to protect both customers and workers when it comes to health. Gloves and face masks nearly always come up in that conversation. They’re also part of Gov. Newsom’s plan for restaurants, and will definitely make their way into other states’ frameworks for reopening business.

Robot staff.  Having said that, though, some might just opt for robots when it comes to who’s going to handle your food. My colleague Chris Albrecht recently pointed out that dining customers might prefer “the cold sterility of a robot” to a server wearing a face mask and gloves. Robots, of course, bring up the whole loss of human jobs angle. However, as Chris notes, with fears around the virus and human-to-human contact unlikely to subside for some time, for those restaurants that can afford it, robots might be an appetizing option, at least where city laws permit. Somehow I think they would come in especially handy for running curbside orders to cars.

Okay, wait a minute. Does all this mean my future restaurant experience will involve ordering food ahead of time via an app, then waiting at a plexiglass-encased table for a wheeled bot to roll up with my burger? That sounds lonelier than a month in quarantine.

I doubt it comes to that scenario, though. The COVID-19 situation changes daily, which mean so do expectations about what restaurants will look like when the economy reopens. Maybe all of these predictions will come true. Possibly none of them will. The most likely scenario is that a few of them, like curbside pickup and mobile payments, will become industry standards, and restaurants will use a mixture of the others based on time, money, and customer volume. As states begin discussions around reopening the economy and more chains like Starbucks start outlining their plans, we’ll get a clearer picture of what to expect in the the post-pandemic restaurant experience.

Thanks to Tech, Restaurant Employees Are Accessing Earnings Faster

One area that’s part of any good discussion about the future of the restaurant concerns employees — that is, the servers, baristas, drivers, managers, and others who make up the backbone of the industry.

How they get paid is something that’s fast changing as the industry grapples with dining room closures, mass layoffs, furloughs, and general economic tension. This week, we wrote about Domino’s teaming up with challenger bank Branch to offer employees instant access to their earnings via the Branch app.

Branch is one of a few apps out there that lets hourly workers — who often live paycheck to paycheck — get faster access to much-needed cashflow. DailyPay, which we’ve written about before, is another popular one.

I see an uptick in restaurants making it possible for employees to use these types of apps in future. As everything in the previous section of this newsletter suggests, the restaurant model is rapidly changing, and it’s hard to guess now which formats are most likely to be around next week, next month, or even next year. That means it’s also hard to predict how many people a restaurant will need on staff, and how many hours those individuals can work.

With so many questions up in the air, the least restaurants can do is integrate with one of these apps to get their employees paid faster.

Philz Coffee Pilots a Mobile-Order-Only Location in San Francisco

Some restaurant chains are responding to the rising demand for off-premises orders with drive-thru lanes dedicated to mobile customers. Philz Coffee, a San Francisco-based chain, just took things a step further and opened an entire store dedicated to mobile orders. The shop opened Wednesday in S.F.’s Salesforce Transit Center, where Philz also opened a full-service location.

As the mobile-only label suggests, you have to download the Philz app and place all orders through it in order to pick up a coffee at this particular location. When an order is ready, a customer will see their name appear on a board above one of the three counters in the store where drinks are made. There is no indoor seating, and minimal outdoor patio seating.

San Francisco’s Salesforce Transit Center, which is still a work in progress, is a major bus terminal for the city as well as a hub for restaurants and events. By offering a to-go-only store in this location, Philz is clearly capitalizing on the rush-hour foot traffic and number of customers wanting a fast, easy way to grab their morning beverage on the way to work.

The mobile-only format for coffeeshops isn’t unique to Philz. Starbucks unveiled to-go-only stores in China and NYC last year that are similar in that orders are placed through the mobile app and the physical locations have a much smaller footprint due to limited seating. 

One thing that isn’t clear about the new Philz location is whether it will accept cash if all orders have to be placed through the mobile app. Much ado has been made over the exclusionary nature of cashless businesses, and San Francisco is among the cities considering a ban on that particular business model. 

Another issue this new Philz location will have to contend with, at least for now: the COVID-19 pandemic. Currently, the Salesforce Transit Center has suspended events at Salesforce Park, a public space located within the Transit Center complex. While both the park and Transit Center remain open for now, this is hardly the optimal time to be opening a new coffee shop in a crowded urban location. Right now, more than three in 10 customers plan to leave the house less often to go out for food and beverages according to a recent survey from Technomic. Work-from-home mandates from major companies will also reduce the number of people moving in and out of public spaces like the Transit Center for the next while.

A spokesperson for Philz told Restaurant Dive that the chain is planning to open more of these mobile-only locations if this pilot location is successful in terms of business. Both the debate over cashless business models and the increasing restrictions on public places due to COVID-19 may very well affect that success, at least in the near future.

Snackpass Raises $21M Series A Round for Its Order-Ahead Food App for Students

Order-ahead food app Snackpass has raised $21 million in Series A funding in a round led by Andreessen Horowitz with participation from First Round, General Catalyst, YCombinator and Inspired Capital. The round brings total funding for Snackpass to $23.7 million.

Snackpass was founded in 2017 at Yale University. Though the company has since relocated headquarters to San Francisco, its focus, for now, remains on college campuses. The app is currently available at 11 schools around the U.S., and Snackpass said in a press release it will use the new funding to expand to 100 campuses over the next two years.

With the app, Snackpass users can order and pay for food then pick it up at the restaurant. (There is no delivery functionality at present.) Where the company sets itself somewhat apart from the food app pack is with its social features and loyalty program. Users earn loyalty points that can be redeemed for free food, either for themselves or friends. The latter highlights the social aspect that’s a major centerpiece of Snackpass’s strategy. Built into the app is a Venmo-like feed where each purchase a user makes shows up and where people can communicate with one another, get restaurant recommendations, and send gifts (i.e., free food).  

This emphasis on creating a community within the app is one of the reasons Snackpass has been able to maintain something other food delivery apps struggle with: a loyal user base. Third-party delivery may be on track to have 44 million U.S. users in 2020, but most of those people hop between apps, more interested in finding the best deals on food than claiming allegiance to, say, DoorDash versus Uber Eats. 

A loyalty program, which is different from subscription models many of the big-name food delivery apps offer, is also key to keeping Snackpass users coming back. The company claims a 75 percent penetration rate among students within six months of being on a college campus. The service can also sync with students’ campus meal plans.

Right now, college campuses are fertile grounds for testing new approaches to food delivery. Though unique, Snackpass is hardly the only app out there catering to students. Earlier this year, food delivery app Good Uncle was acquired by Aramark, a longtime food services provider for colleges and universities. In 2018, Grubhub acquired Tapingo, an order-ahead app for college students that’s at 150-plus schools.

Those are only a couple names in the pack. DoorDash, Allset, and others are also making their way to schools in the U.S., and the competition for college students will intensify as we head into 2020. The new funds, as well as having a name like Andreessen Horowitz in their court, will hopefully give Snackpass enough financial and operational muscle to stay in the center of that competition.  

Chipotle Unveils a New Restaurant Design to Support Delivery, Digital Ordering

Chipotle today announced it is testing a design prototype for its stores aimed at further growing the chain’s billion-dollar digital business.

According to a Chipotle press release, the new digital-centric store design will be trialed in the following different Chipotle store formats: an urban storefront, a standalone restaurant with a Chipotlane, and an endcap restaurant with a Chipotlane. So far, the chain has stores in Chicago, IL, Cincinnati, OH, and Phoenix, AZ set to test the new design. It will also retrofit two existing stores in California.

“By better suiting our restaurants to accommodate the digital business, we’re able to finalize orders more effectively and provide a better overall experience for our guests,” Curt Garner, Chief Technology Officer, said in a statement.

The new store model will integrate longtime pieces of existing layouts, such as an open views of make-lines in the kitchen, with more recent changes the chain has made to accommodate the uptick in digital and delivery orders. That includes dedicated pickup shelves for digital orders, second make-lines meant to fulfill meals for delivery, and more Chipotlanes. 

In case you hadn’t guessed, Chipotlanes are a big part of that strategy. Unlike traditional drive-thru operations, those of Chipotle are designed specifically for digital orders. You cannot simply drive up to a menu board and order on the spot from a Chipotlane. Instead, customers order ahead via mobile and only use the window to pick up their food. Third-party delivery drivers can use this feature as well, saving themselves the trouble of having to walk into the store and locate their order. 

On Chipotle’s Q3 earnings call this past October, CEO Brian Niccol said the chain expects a total of 60 Chipotlanes by the end of 2019, though some of these new openings may shift into Q1 of 2020. Additionally, of the 150 to 165 new restaurants Chipotle plans to open in 2020, about half will include a Chipotlane. 

Whether by drive-thru, pickup shelves, or some other method, restaurant chains giving their stores makeovers for the digital-ordering era is a major strategy right now. Just yesterday, we wrote that Shake Shack is opening a new NYC location that will emphasize digital ordering and delivery. Starbucks, Krispy Kreme, and a boatload of others have already made similar moves.

As to how widespread Chipotle’s new design prototype will expand, the chain said in the press release it will asses the performance of each of the four new locations before deciding when and where to roll the concepts out nationally.