Joe Skupinsky

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3 Preventable Problems That Set Up Franchisees for Failure

By Joe Skupinsky

Franchise

Image source: wabagrill.com

The relationship between a franchisor and a franchisee is much like a human relationship. You want to strive for a healthy, co-dependency built on open communication and mutual respect. You don’t want it to be needy, possessive, or insecure as a result of poor communication. That kind of operational environment can make one of the parties want to either lock the door behind them or leave the key on the table.

Franchising is a two-way street and both parties can have a different perspective and interpretation of events.  With this in mind, we’ve pinpointed 3 common problems that often indicate a franchisee is being set up to fail:

  1. Poor communication and understanding of expectations. Saying and doing are two very different things. For example, are your brand’s best practices actually being fulfilled in your stores or are they just pages in an Excel spreadsheet or binder tucked away in the back office? The successful franchisor leads by example, like by organizing key operational responsibilities into actionable tasks. When paper checklists are transformed into a checklist on a mobile device, you suddenly have capabilities that you never had before- like viewing aggregated data in real time, tracking actionable items like tasks and projects, and more.

Pro-Tip: A corporate-owned store can provide a great baseline for operations and help franchisees determine how to communicate expectations to franchisees. Both parties should embark on a path to better operations together, so be flexible where possible. For example, standards for cleanliness can’t be compromised, but perhaps you can negotiate on the execution of category promotions.

  1.  Not responding to franchisee’s real needs in real-time and/or franchisees not reporting issues in real-time. In 24-hour retail environments, equipment can break, staffing shortages can present a real problem, and brand loyalty can suffer. Customers remember the broken coffee machine, the dirty floor or restroom, and long lines at the register. Do you take any proactive or preventative measures leading up to the problem, and what do you do when there’s a real situation in a store?

Pro-Tip: Franchisors can empower franchisees to communicate via real-time notifications. Think about it this way: In an unfortunate circumstance like a family emergency, how do you want to be contacted? Do you want an email that might get buried in your inbox on a busy day, or do you want a message right to your mobile device? In today’s fast-paced world, most people want the notification as soon as they look at their device. Plus, as a matter of practicality, you want documentation of the reported event.

  1. There’s no follow up at the store level. It all comes down to accountability. For example, the marketing materials or product didn’t arrive to the store in time, and a rush shipment went out. The franchisee receives the materials and the issue seems to have been resolved. However, what senior management should do at this point is allow the franchisee to set up the promotion and confirm they did so with a photo. In fact, all franchisees with the same promotion should be doing this to ensure proper execution. 

Pro-tip: It’s not unreasonable to think that you could send out a directive like this in the morning and gage compliance among your network by the end of the day, all by a simple glance at your mobile device. Effective franchisors won’t make audits and checklists a “big brother” spy game; rather, they’ll use these insights to reward effective franchisees and employees who are going the extra mile. 

Bonus Pro-tip: Zenput provides the tools that can improve communication and accountability between franchisee and franchisor. Find out more about Zenput’s mobile platform and the power of real-time insights by clicking here. 

How McDonald’s Can Make New Menu Item Execution More Manageable

By Joe Skupinsky

mcdonalds interior.jpgHas McDonald’s finally hit its stride with its newly announced menu items? Analyst Andrew Strelzik of BMO Capital Markets thinks so. From a stock perspective, he believes that McDonald’s is on pace to reach its 2019 objectives, which includes a cash return to shareholders. Finally, some good projections for the Golden Arches.

When it comes down to it, a $22 to $24 billion cash return to shareholders comes down to brand initiatives. According to Strelznik, McDonald’s is poised to benefit from new menu items, a corresponding large-scale marketing project to promote the new items, and a stronger brand image to support demand. McDonald’s is set to take advantage of an improving restaurant environment that will emerge in the second half of the year.

Today’s modern food culture values real, made-to-order food, and McDonald’s seems to have gotten the message. By mid-2018, customers who order a Quarter Pounder can expect a fresh beef patty off the grill, not from out of the freezer. The move to go fresh comes after the chain tested the fresh beef burgers at more than 400 restaurants in Dallas and Tulsa, OK, for about a year.Competitors Wendy’s, In-N-Out Burger and Shake Shack all use fresh beef. Considering that McDonald’s revenue fell for the fourth year in a row last year, it might have been time for the company to return to its roots: the hamburger. That’s really what it comes down to, right? Quality food served in a quality environment by friendly staff. Everything else is a distraction (a point Carl’s Jr. and Hardee’s seem to have realized by dropping the sexy ads and introducing a Baby Back Rib Burger).

Combine that with the fact that McDonald’s has recently lowered prices across its drink menu, and launched a line of Minute Maid slushies in the Midwest and South. Indeed, it seems like Mickey D’s has a spring in its step as it aims to recapture lost customers.

Food Safety is a Top Concern Among Franchisees

As a brand initiative, McDonald’s fresh beef is exciting, but don’t forget that when it was first being tested in restaurants, franchisees were rightfully concerned about speed of execution and food safety. According to a Nomura survey, one franchisee wrote, “If we do not handle the meat perfectly, there is an opportunity for bacterial invasion of our product.”  

That is absolutely true, and brings to light storage, handling, and preparation concerns. Food safety is a wide-scale, concerted effort that requires attention to detail, documentation and adequate follow-up. It’s one thing to test a concept in 400 restaurants. It’s another ballgame to have more than 10,000 restaurants offering fresh beef. And in an organization as sprawling as McDonald’s, food safety is going to require the initiative of forward-thinking franchisees.

Forward-thinking is about using technology to your advantage. It’s about realizing that there’s a better way to communicate through real-time, cloud-based technologies, and that there’s a better way to document kitchen conditions than paper and pen.

Let’s face it: it’s safe to never change your menu and to never change. It’s also how brands lose—when they can’t adapt. As one McDonald’s franchisee stated, "Our line continues to slow down with added items and will continue to do so. However, we are a restaurant and we ought to always serve the best food so [the slow down of the line] may not outweigh the positive [of adding fresher ingredients]."

A lot of critics have wondered if McDonald’s would ever be able to make a comeback. It seems like all the pieces are finally coming together. The question remains: are franchisees up for the challenge? Will they be able to navigate the “noise” of more foot traffic, avoiding distraction and prioritizing food safety?

There are tools to help franchisees create a consistent customer experience. Check out Zenput’s mobile form for gaining store insights and contact us for a demo.

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Topics: Restaurants, restaurant cleanliness, cleanliness

For That Person Who Needs to See the Value of Mobile Tech in Retail Operations:

By Joe Skupinsky

I’ve said this in the past, but it’s worth repeating: at Zenput, we are practitioners of reality. We are the real-time operational insights provider through our mobile software solution. Our customers in the convenience store, restaurant, retail, and CPG spaces realize our value as they customize our platform to fit their own unique operational needs. We’re always talking about real-life solutions to real-life problems.

With that mindset and approach, we don’t always concern ourselves with theory and hypotheticals. So the other day, as I was reading up on industry trends, I came across a “textbook” representation, and really a validation, of what Zenput offers.

Class is in session, and I shall profess! First, check out the chart below (credit to Scott Allen Mongeau for this visual):


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First, observe the two axes: “analytics maturity” and “business value.” Notice as analytics mature, they become more transformative for your business and as business value increases, it becomes more strategic.

Now look at where the chart begins: Data Quality is the figurative “low man on the totem pole.”

How is your data quality? Are you still using spreadsheets? Paper and pencil checklists? There’s a better way to collect data than manual processes. In fact, to move upward on this trajectory, you’re going to have to use technology and automation.

So you adopt technology and you get promoted to Descriptive (business Intelligence). Say you adopt Zenput, which has the basic function of giving you the ability to document or report conditions at your locations in real-time. You essentially create a mobile checklist that you can distribute to store managers with the click of a button in real-time, and the answers are collected in real-time. Great! But you can do so much more...

The next step on your trajectory is Diagnostics. Set up Zenput to alert you of exceptions. For instance, your managers numerically rate the promotional execution from 1 to 5, and you get alerted to any display that scores a “3” or below. Zenput easily identifies those stores, allowing you to virtually check in and see what the problem is.

You also have the ability to follow-up on any shortcomings that were documented during the descriptive phase. Assign follow-up tasks and monitor compliance in real time. This is when you start to gain even more knowledge about challenges your managers have at the store level. For instance, maybe the promotion wasn’t executed correctly because the vendor or distributor did not deliver the correct materials. If this happens across several locations, it can be a major setback. But now, you’re wiser for having diagnosed the cause of the problem.

Move up another step in your trajectory to Predictive (forecasting and probabilities).When it’s time for your next retail promotion, you can now plan better with your vendor or distributor to set yourself up for success. You can better predict what might happen, all the while still documenting and diagnosing what actually does happen at the store level. Think of it as a continuous cycle of learning and adjusting.

The next promotion is Prescriptive (optimizing systems). Zenput has dashboard views with historical analysis and reporting functions. Want to know just how well that summer beverage promotion was executed? The data is right at your fingertips. You start to see patterns in your operations, which according to the diagram, can be transformative to your business.

Finally, the ultimate phase of your trajectory is Semantics (social context and perception). Honestly what is the point of this discussion about trends in data analytics? It’s to elevate your brand and deliver the best customer service experience possible. Optimizing internal operations will translate externally to customers.

You know it’s true: customers know when you don’t have your stuff together. This is what damages brands over time. Not to bust on the Golden Arches, but that is one of the areas where McDonald’s has struggled in recent history. Widespread operational inefficiencies began to affect the customer service experience and brand loyalty.

Well that concludes my business theory lesson, and I hope you’ve seen the value of mobile technology and where Zenput fits in the data analytics diagram. Share this post with that person in your organization who needs to see the value of mobile tech in order to believe!

Before I dismiss this class, I’ll leave you with one last word of wisdom, if I may: start somewhere. Start with the technology that’s right in your pocket. Consider mobile technology and how it can improve your data, diagnostic abilities, and planning. Use mobile to your advantage, because if you don’t, a competitor will!

How to Stand Out in a Gas Station Cluster

By Joe Skupinsky

Screen Shot 2017-03-01 at 1.54.15 PM.png(Image Source: Google Maps)

I always thought it was strange that there were three gas stations on a single corner down the street from my college—until I started learning more about the convenience and gas retail industry.

Around the time I saw this pattern, a game theorist in San Francisco noticed the same thing and attempted to get to the mathematical root. As Presh Talwalkar explains, this phenomenon is partially the result of population clusters, so a couple of thousand people driving to and from a college could warrant a cluster of gas stations.Here’s a brief explanation video:  

 

The basic reasoning using the hot dog stand example in the video is this: both stands move closer to the center to capture more of a competitor’s customers. If either stand moves, they’ll lose customers. So when competing on location, everyone wants the central location. This applies to gas stations, fast-food chains, and political candidates. Here at Zenput, it was important for us to understand this game theory concept, considering we work with two-thirds of these groups. (Sorry, we don’t currently have plans to enter the political realm anytime soon!)So if moving towards the center of the geographical market is a naturally occurring trend that makes sense for a brand, it also follows that convenience store operators should do everything in their power to stand out from their competitors.


In order to maintain revenue, it becomes crucial to be so in tune with your customer that you have the ability to react to changing conditions in real time.

Since Talkwar used the example of businesses on a beach, and we’re all longing for summer at this point, I’ll use the example of the first warm day of the season. the example of businesses on a beach, and we’re all longing for summer at this point, I’ll use the example of the first warm season of the day. Maybe that day sneaks up on you, and you hadn’t yet planned an in-store beverage promotion. Not only is it warm outside, but the day falls on a weekend. This is a prime opportunity to catch customers filling up for a weekend day trip. They’ll also be filling up right across the street at your competitor’s location. You decide to take action by launching an impromptu beverage promotion.

Now you don’t have signage on the drop of a dime, but you do have some well-positioned cold-cases located at the front of your store. You decide that every store should stock up those coolers with a selection of thirst-quenching beverages, from waters and sports drinks to lemonades and iced teas. Maybe you allow store managers to institute a buy-one-get-one deal on a well-stocked beverage. And while you’re managing the cold case, you make sure to stock it with the latest healthy snacks, yogurt and to-go fruit and veggie cups—everything that’s convenient to take on the road. Now you’re responding in real time to your customers’ needs!

So to recap what has happened in this example:

->The brand is responding in real time to forces (like Mother Nature) that are beyond your control.

-> The brand is taking advantage of a situation by offering a timely product assortment.

-> The brand is in tune with customer needs, which may earn a future visit.

Assuming the competitor across the street didn’t have a better executed promotion, your brand has won today!


Real-Time Response Is Within Reach

The example I used above may seem out of reach to some large-scale operators. But as a practitioner of reality, I’m here to tell you that any gas station and convenience store retailer with the right tools can execute and “think on their feet” in real time. Zenput’s real-time functionality enables that kind of response at the store level.

This is what the chain of events would look like:

-> Senior managers recognize a trend and make the executive decision that they want to promote certain items.

-> Senior managers push out a notification that, for instance, the cold case must be stocked immediately with certain items.

-> Regional and/or store-level managers receive that notification and move to arrange those items.

-> To ensure compliance, store-level managers are required to take a photo of the cold case once it’s stocked.

From Zenput’s central dashboard, senior managers would immediately be able to tell if stores were in compliance with this directive because Zenput would provide data on stores that weren’t. That’s right—you can virtually check into each store!

This isn’t utopia—it’s the power of real-time mobile technology. And it’s why Zenput is being used in more than 6,500 c-stores worldwide. In fact, more than 15,000 people will use Zenput today.  

Learn what Zenput can do to improve your store-level execution by scheduling a demo, or check out our testimonials page to learn more how our platform is helping other businesses like yours every day.

Topics: gas stations

The 3-Part Call-to-Action Against Rising Convenience Store Operating Costs

By Joe Skupinsky

 

 

cutting operating costs

We’re living in politically uncertain times. While the new Presidential administration has promised to be pro-small business, there’s no guarantee that convenience store operators will experience change at the local level. That’s the American democratic process and the power of states’ rights. It’s also part of the frustration for business owners who don’t see change—they just see rising operating costs while their gross margin dollars slow down. That was the key point of this recent article in NACS Magazine. Direct store operating expenses (DSOE), including wages, payroll taxes, health-care insurance, card fees, utilities, repairs/maintenance and supplies, are all on the rise. These rising costs jeopardize the operator’s profitability.

Those in the convenience store industry with strong political convictions and a penchant for activism know the reality: When it comes to costs that are not under your direct control, business owners are at the mercy of government action (or inaction) at the state and local levels. But this is not to say that business owners are not in control over efficiency. In these challenging times, it’s crucial to make every dollar count and to generally increase accountability in your organization.

There are the 3 areas every convenience store operator needs to focus on in 2017:  

  1. Document and be proactive about the “little things.” The so-called little things are often part of a bigger picture of efficiency. Your managers know what’s working in their stores and what’s not. They know the faulty equipment, they know when the promotional placement isn’t working, and they know their staffing needs. And if your store managers are too wrapped up in the day-to-day operations to report it, then that’s a task for regional managers. The question is: are you providing your team the tools of communication to report these issues before they become larger problems? Are you responding to these concerns in real-time?  

  2. Manage labor costs. According to NACS data, health care and wages comprise more than 48% of DSOE. More states are raising their minimum wage above the $7.25 federal wage. Leroy Kelsey, director of industry analytics at NACS, points out that convenience store operators have direct control over the decision to offer a higher hourly wage. More convenience store operators may choose this path considering that more mass retailers are bumping up their hourly wages to $10 per hour. However, the key is to retain good employees. “You’ve got to close the loop on training people, acknowledging them and presenting them with opportunities to grow. The best retailers are doing that right now,” he advises.  

You’ve probably seen these graphics floating on LinkedIn and other social networks. Employees stay when they are paid well, challenged, promoted, involved, on a mission, empowered, and trusted. Creating such an environment requires a grassroots effort that needs the support of regional managers and store managers. It will require the ability of the organization to identify and recognize talent. If you think it’s impossible, think again. The right tools make it possible for daily or weekly reporting of employee achievements at the store level.

  1. Treat each store like a microenvironment for efficiency. Speaking of a grassroots effort, convenience store operators need not wait for the next big promotion to follow up with stores. Senior managers and regional managers are likely on the same page when it comes to best practices for operations, but they need employees to comply. Standardize those best practices with checklists that become a routine part of a manager’s reporting system. Then, assign tasks based on those checklists, as needed.

If the thought of a paper checklist immediately turns you off, we don’t blame you! It’s time to go paperless with your process, especially for operators with dozens, maybe even hundreds of locations. Imagine having the ability to make a change, whether it’s the way a store is restocked or the way your foodservice team handles the afternoon rush, and then having the ability to observe and document that change over a period of time. Mobile tools like Zenput give managers that flexibility.

Zenput Helps Improve Accountability

I could happily extol the benefits of using Zenput for the next 500 words, but I don’t think that would be as effective as if you heard it from a major convenience store retailer, MAPCO, which uses our platform. Watch MAPCO’s testimonial or read about the eye-opening operational insights they have gained and acted on, and please feel free to reach out to us with questions that pertain to your specific needs.

Download the MAPCO case study

Also, while you’re visiting, please check out examples of the mobile forms retailers can customize for store-level insights. Remember: Forms are distributed in real-time to mobile devices via cloud-based technology. No Internet in the store? No problem! The information will sync online once a connection is restored.

Omnichannel is Here to Stay: 3 Ways Conventional Retailers Can Adapt

By Joe Skupinsky

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Here’s a fact: Not all retailers Zenput works with are equipped to offer the online shopping experience... yet—but they also don’t have to right now.

Plenty of retailers we work with have core businesses that rely on foot traffic and/or drive-thru operations. Your customers may be just “catching up” to the technology of ordering groceries or food delivery online or through an app. But in the convenience industry, especially, as long as people have to physically stop to fill up a tank, there will be an opportunity for in-store traffic.  

So how common is omnichannel retail? It appears to be fundamentally changing the way customers approach major retail channels, and it’s starting to change retailers’ approach to how they serve customers.

Of course, we also know that in December, Amazon opened a store for employees in its hometown of Seattle that has no checkout line. Just scan in with the new Amazon Go app and the store’s computer vision and technologies tracks the items you’ve purchased. It’s pretty cool, but also a little creepy at the same time!

As referenced in this CNN Money report, the political climate may not be ready for that level of automation in the workforce. Still, the point must not be lost: brick-and-mortar retailers are incorporating more aspects of the streamlined, fast, and convenient digital experience. Retailers of consumer products must start turning their attention to digital outreach and learn how to accommodate customers who shop in a world of instant gratification.

How Retailers Can Adapt in the Short-Term

We tend to focus so much on what a giant like Amazon is doing, but just as important is the why. Why is Amazon looking at brick-and-mortar grocery stores and bookstores? Because the stores, which are experimental right now, partly serve as an advertisement for Amazon’s digital products! In this way, Amazon embodies the omnichannel approach of integrating a digital and physical shopping experience. It’s lofty “stuff” of the future, but not entirely relevant to Zenput’s customers who are just looking for ways to be more efficient and live in “the now.”

So while it’s crucial that retailers recognize the opportunities presented by digital integration, it’s equally as important that they recognize their strengths outside of the digital world. Here are 3 ways retailers can begin to adapt to the omnichannel mindset without losing sight of who they are and how they can best serve their core customers:

  1.  Personalize – Automation streamlines and makes things similar. It can also potentially remove the fun, memorable parts of shopping. I wouldn’t be able to tell you if I enjoyed scanning my grocery items at Store A over Store B. But if Store B recognized my loyalty and gave me something for it, I’m more apt to return. This is a reason why loyalty and other rewards programs are becoming increasingly important, and why well-trained staff and customer service will continue to be paramount.

  2. Curate — Very much tied to personalization, curating is more than simply knowing what customers want; it’s about quality. Don’t be just good at where you excel—be GREAT! For example, you can make certain products or foodservice items your specialty. The preparation, selection and placement of products will be crucial, as customers return for consistency and an easily navigable environment. Convenience stores already have an advantage in offering a smaller footprint store, so they should take advantage by carefully considering product placement.

Remember: Unique retail experiences drive in-person visits and thankfully, it doesn’t require a song and a dance—the basics done right will do just fine!

  1. Start thinking mobile – From social engagement to rewards programs, your customers are on their phones—and you need to be there, too! Aside from your customers, who else is on their phones constantly (at least when they have a break)? Your employees—and probably you, too! The culture towards mobile technology is slowly changing from a nuisance you lock in a break room or an office drawer to a practical tool that can be utilized appropriately during the workday.

So let’s stop cursing the fact that everyone has a computer in their pocket and embrace it instead!

What can you learn with the right mobile apps and real-time insights?

…to be discussed next time!

The Future of Convenience Store Foodservice

By Joe Skupinsky

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Did you go to the NACS Show in Atlanta this year? We did, and had a great time exhibiting our product for the second consecutive year! A huge thanks to everyone who stopped by our booth.

The NACS show always presents great opportunities to make new acquaintances, and it’s also a great time to catch up with our current customers. But one of the most important things we take away from NACS is education. We always want to learn about the topics and trends that matter most to our customers.

One of the hot topics—and it has been a hot topic for the past few years—is the future of foodservice in the convenience store industry. Convenience Store News attended a foodservice trends session led by Clint McKinney,  group director of Category Advisory- Convenience Retail for Coca-Cola North America. McKinney shared six keys to satisfying new customers:

  1. Value Plus - meal bundling or offering a new topping or flavor
  2. Evolution of Healthy - simple ingredients, fresh food, transparency, and “clean eating”
  3. Flexibility & Discovery - expanding meal occasions to coincide with the growth of snacking
  4. Hyper-Convenience - on-demand delivery, takeout, and drive-thrus
  5. Digitization - using social media to create share-worthy content
  6. Brand Authority - having a clear brand identity and telling a clear story  

In another session, NACS Chairman Jack Kofdarali advised retailers that they must put an emphasis on food as challenges arise in other product categories. He explained how not that long ago, customers were choosing between something delicious vs. something fast. That’s no longer the case, as many retailers are providing delicious food, quickly.

Improving Retail Execution: A Practical, On-Location Approach

Successful convenience store foodservice operators would agree that execution is fundamental to building a brand. That’s where Zenput helps convenience store retailers and other foodservice operators. Zenput allows retailers to identify what they do best and where they need to improve—all to strengthen their brand.

Let’s revisit some of the key points and see how, exactly, Zenput can help C-store operators with each.

Value Plus - Zenput allows retailers to build custom audit forms, for everything from store cleanliness to price and promotional accuracy. Inaccuracies and issues can be identified and addressed in real time.

Evolution of Healthy - Customers want healthy and fresh foods, but supplying the demand has its own challenges. The store’s cold case needs to be regularly restocked and refreshed. With Zenput, managers can make this a daily task and track compliance across stores. Zenput is even compatible with a food thermometer as an added food safety audit functionality. 

Hyper-Convenience - If you’re a convenience store operator with drive-thrus - great - you’re ahead of the industry curve! Using Zenput to audit your drive-thru, along with your kitchen and staging area, helps identify potential weaknesses like dirty or broken appliances that may be slowing you down or costing you customers.

Zenput is also a great tool for maintaining high execution in the forecourt, which strongly drives convenience store sales. This topic was addressed in another NACS Show educational session. John Eichberger, executive director of the Fuels Institute, discussed the importance of first impressions at the forecourt and advised retailers to make it clean and friendly, while satisfying customer cravings.

Convenience store retailers can also audit their forecourts to make sure they’re clean, functioning, and up-to-date with all the latest promotional signage. Whether they’re located outside or inside the store, clean restrooms certainly send the right message to customers who are considering a foodservice purchase.

Eichberger added that there are three principles to keep in mind: brand visibility, brand perception and brand experience. Like the foodservice takeaways, it all comes back to brand.

Practical, Everyday Branding

If there’s one takeaway about branding that I want to share, it’s this: it doesn’t sit on a shelf.  

There’s the philosophy of branding, and then there’s branding in reality. At Zenput, we are practitioners of reality, and our flexible platform reflects that. We want retailers and foodservice operators to use our mobile solution to measure and report actual conditions in their stores. Get notified in real-time when something is askew, assign a task to fix it, and then have the ability to follow up to ensure its completion. Experiment with new audits to improve retail execution and know you can easily change them, as you should in an ever-changing retail environment.

To learn more about our mobile solution, check out our blog, or click here to: find out more about how we help convenience store operators improve their operations.

If you'd like to schedule a demo, go to zenput.com and click on ‘Schedule demo’ in the top right corner.

 

Topics: C-store

Starbucks vs. McDonald’s: A Fair Fight for Breakfast Dollars?

By Joe Skupinsky

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“It was the best of times, it was the worst of times. It was the age of breakfast, it was the age of dicsovering if premium works better over value in a crowded industry.” How do you like my intro for “The Tale of Two Retailers”? I’m no Dickens, but I can’t help but compare McDonald’s All-Day Breakfast with Starbucks recently announced brunch test.

If you missed the latter news, Starbucks is testing a “Weekend Brunch” menu in select markets. As you may have guessed, the menu is offered only on weekends. The program began in late August in 78 Starbucks stores in the greater Portland and Seattle area. Brunch foods, including Belgian waffles, baked French toast, and quiche made from cage-free eggs, can be ordered from about 8 a.m. to 2 p.m. or until the food supply runs out.

Testing brunch is yet another way Starbucks is trying to move past its just-a-coffeehouse image. Starbucks has also experimented with selling wine and beer to attract diners during the evening hours. Recently, the company also made separate commitments to stock Megpies artisan tarts and Bantam mini stuffed bagels, which appeared on the hit TV show “Shark Tank,” across thousands of locations. What do all of these items have in common? They’re premium upsells intended not only to drive customer traffic but drive profit margins.

And then there was the McDonald’s strategy…

Can Value Still Save McDonald’s?

In late July, McDonald’s Corp. reported weaker-than-expected same-store sales growth in its second quarter. All-Day Breakfast has been credited with driving sales earlier this year, so this was a sign that the menu could be losing some momentum. Business Insider also reported on unintended consequences of the All-Day Breakfast menu and McPick 2 menu, which allows customers to choose two items for $5. According to one analyst, customers may be “exploiting” the promotions to trade down to cheaper menu items, causing average values for lunch and dinner to fall and therefore dampening overall sales growth.

It’s not just analysts being critical of McDonald’s strategy. Franchisees have expressed their disapproval in a recent survey. "I am very alarmed about the discounting push. I have never seen the corporation be so aggressive with discounts,” one franchisee wrote. “The regional marketing teams are adding numerous other discounts to the McPick 2, primarily breakfast items. They are encouraging, quite literally, everything being on sale. This is a very hard cultural adjustment for me."

What’s the solution so that discounts don’t cannibalize sales growth? According to the same analyst, McDonald’s must lower labor costs and turn to automation. We already see that happening with the gradual rollout of self-ordering kiosks with premium offerings at some McDonald’s locations. It shouldn’t be about replacing employees with machines. Rather, automation should be about freeing up current employees to do other tasks, including properly executing menu items and ensuring accuracy of orders.

The Takeaway

There are many changes happening in both the quick-service and fast-casual restaurant segments. As the industry moves forward with technology and innovation, companies will need to have a solid grasp of restaurant-level insights as they pertain to basic operations. For instance, if a fresh beef patty is introduced to more McDonald’s stores (it’s being tested), are the right sanitation protocols being followed? Are fresh ingredients stored at the right temperatures? And as McDonald’s works to expand the All-Day Breakfast menu, franchisees must remember customer service is still crucial, especially for a financially fragile company.

Zenput is a mobile software solution that creates a chain of accountability within organizations, allows senior managers to gain insights on basic store operations, and enables real-time communication to address challenges as they arise. To learn more about Zenput for restaurant operations, click here.

Topics: Restaurants

Is Less Really More on Fast-Casual Restaurant Menus?

By Joe Skupinsky

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Mark Twain famously wrote, “Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).”

In the quick-service and fast-food industries, we continue to see brands that take the approach of the simplified menu. Think of some modern, successful chains: Chipotle, Shake Shack, Five Guys Burgers and Fries. All keep their menus to a few items. Even The Organic Coup, an organic chicken chain backed by Costco, plans to nest in the Seattle market by basically offering three variations of the same menu item: the chicken sandwich.

So it’s worth noting when you find an exception to this modern unwritten rule of menu curation. Meet The Stand, a Southern California chain offering more than 40 entrees, burgers, sandwiches, hot dogs, salads, and more at each of its four locations.

“A lot of narrowly focused concepts have dumbed down their menu so much that it’s hard to get more than two people to agree to go to them sometimes unless it’s your once-a-month trip to Shake Shack or something like that,” CEO and Co-Manager Murray Wishengrad told QSR magazine. “We just felt that that strategy—although very common and certainly revered by customers and the financial marketplace—wasn’t what we wanted it to be.”

The Stand welcomes you and that friend in your group who always ruins your dinner plans with, “Eh, I just had that a couple of days ago.” They hope that customers will frequent locations multiple times per week. Rather than looking to Chipotle for inspiration, The Stand looks to The Cheesecake Factory, which has an extensive menu. The Stand is also differentiating itself from competitors by collaborating with local brewers to make custom brews. This sounds like one hoppin’ place, if you’ll pardon the beer joke.

Standing Up, Not Sitting Down

What’s your take on The Stand’s approach vs. the “less is more” approach? What does it mean for restaurant operations and growth? Only time will tell if the fast-casual segment sticks with the simple menu approach or sways back to longer menus.

Regardless, restaurants need to take a stand on menu strategy because it’s so fundamental to growth. Expanding a restaurant chain like The Stand and transferring an extensive menu to multiple locations is tough work that requires excellent communication. Offering new menu items and promotions across your locations is also an exercise in communication. That’s where Zenput can help. Learn more about our mobile solution for restaurant operations by clicking here.

See Also

Why Regularly Inspecting Your Franchise is Important
Menu Pricing Matters in Fast-Food Segment
Hidden Menus Build Customer Loyalty
Healthy Food Promotions: A ‘Must’ for Retailers
Restaurant Operations Lessons from In-N-Out Burger

Topics: Restaurants

Hidden Menus Build Customer Loyalty

By Joe Skupinsky

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Nostalgia, special experiences, customization—these are the hallmark qualities of hidden menus that are on the rise across the quick-service and fast-food segments, as well as c-stores. Secret or hidden menus now have a huge following on social media as Millennials love to share their “hidden treasures.”

The Secret to Building Loyalty

In the better-for-you realm, hidden menus present an opportunity to mix and match fresh items for tasty new creations. In either setting, customers are getting that personalized and customizable experience. In the fast-food realm, secret menus make the occult—and maybe the flat-out sloppy—deliciously taboo.

Face it: You’re more likely to divulge secrets over a pint of ice cream with your loyal friend. From where else could you walk in and order a “Suicide Burger” if not from your good ol’ buddy Burger King? And only at In N Out Burger are you comfortable looking a cashier in the face, and declaring, “I’ll take those fries ‘Animal Style.’”

No matter the style of food, there are opportunities to build loyalty… if your locations are on the same page.

A ‘Secret’ to Everyone but Your Employees

In order to build loyalty, your employees will have to be well-versed on your hidden menu offerings as well as your ingredients and the various menu possibilities. Good execution comes down to good training and good customer service.

Make a decision as a brand. If you’re going to offer a hidden menu, let your employees in on the secret. Perhaps change it up by season to keep customers interested and coming back for more.  Of course, auditing your locations for special offerings, along with employee knowledge and customer service, is something that can become part of your routine.

Use the hidden menu to your advantage to drive revenue, and you’ll be well on your way to becoming the next foodservice legend!

Topics: Restaurants