Restaurants are in flux, and fast-casual chains are in the unique position of being able to benefit both from consumers’ continuing interest in off-premises ordering and newly mobile consumers’ return to on-premises dining. With 36 percent of the United States population now fully vaccinated, and with the CDC now advising that these inoculated consumers can safely enjoy indoor activities without masks, restaurants with on-premises dining options are well-positioned to take advantage of consumers’ pent-up demand for in-restaurant experiences.
Far from directing its focus back to on-premises channels and trusting consumers’ renewed enthusiasm for restaurants to carry sales, fast-casual sandwich chain Schlotzsky’s predicts that the demand for digital convenience will only continue to increase in months and years to come.
“Like everyone in the industry, we had to quickly pivot and find new ways to reach consumers in early 2020, and one thing that became increasingly clear is consumer demand for convenience and accessibility,” Tory Bartlett, chief brand officer at Schlotzsky’s, told PYMNTS in an interview. “While this demand was nothing new, 2020 only accelerated the need to make changes to how guests access our brand.”
In addition to offering customers increased digital ordering options during the pandemic, which included updating the Schlotzsky’s app and loyalty program in the fall, the chain has also looked to provide emotionally uplift to consumers throughout this stressful period.
Putting Joy On The Menu
Throughout the pandemic, Schlotzsky’s launched a number of feel-good initiatives, focusing on indulgent menu items, playful promotions and community-centric campaigns. The Pay It Forward initiative early in the pandemic, for example, encouraged customers to buy a $7 lunch for first responders and medical workers, while much of the chain’s social media messaging highlighted local franchise operators and on encouraging consumers to satisfy their cravings for indulgent foods.
This spirit of playfulness is carrying forward with the chain’s recently announced partnership with football hall of famer and sports broadcasting personality Terry Bradshaw, in which Bradshaw encourages consumers to train their jaws to eat Schlotzsky’s new menu items.
“The series of mouth muscle moving exercises provide our fans with an engaging way to prepare for and enjoy Schlotzsky’s new, meatier sandwiches,” said Bartlett. “Terry is a natural fit for our fans, and in addition to his extensive experience in training as an athlete, he’s been a Schlotzsky’s fan for years.”
These sandwiches come in response to consumer demand for more indulgent menu items. Bartlett noted that the chain’s approach to menu innovation is “deeply rooted in guest insights,” adding that these extra-meat sandwiches, for example, were created to provide consumers with “even more value (that they want) and abundance (that they’ve come to expect).
Making Off-Premises Ordering Stick
While many consumers have turned toward restaurants’ off-premises channels throughout the pandemic, the return to in-restaurant dining brings with it the risk of off-premises sales taking a significant dip — one which Schlotzsky’s hopes to preempt by making continued investments in these channels.
“Off-premises dining and the consumer demand for this service, whether it be through drive-thru access, delivery service or curbside pick-up (available through our app) is a trend with staying power,” said Bartlett.
The numbers support Bartlett’s prediction — as Andrew Robbins, co-founder and CEO at restaurant Software-as-a-Service (SaaS) company Paytronix, told Karen Webster in a recent interview, “The thing that’s really interesting is as people are coming back and dining in, we have not seen a decrease in online ordering.”
Of all the off-premises online channels, Schlotzsky’s is especially focused on drive-thru, which, Bartlett said, “will be critically important to the brand.” To make the drive-thru model work, he added, “Speed of service must meet expectations.”
In fact, PYMNTS research featured in the March edition of Delivering On Restaurant Rewards, created in collaboration with Paytronix, notes that almost 4 in 10 consumers would spend more on food orders if restaurants offered drive-thru pickup. Additionally, many fully vaccinated consumers continue to seek out drive-thru ordering. Data from the May edition of the PYMNTS and Paytronix Order To Eat Tracker finds that more than 1 in 4 vaccinated restaurant customers would be willing to spend more on food orders for drive-thru pickup options.
Future-Minded Restaurant Design
Many restaurants have been redesigning stores in light of the changes in ordering behavior since the start of the pandemic — most recently, Wendy’s announced that 30 percent of its new locations would be nontraditional restaurants, many of which will be designed around delivery and grab-and-go. Schlotzsky’s has begun designing restaurants around drive-thru, delivery and pickup.
“Last fall, we unveiled two new design prototypes with emphasis on off-premises dining,” said Bartlett. “The majority of our existing restaurants have seating space for up to 90 guests, but these two new prototypes have a much smaller footprint.”
One of the designs cuts seating capacity to 35 people, and the other “has drive-thrus on both sides of the building and no indoor seating.” Bartlett added that 99 percent of new Schlotzsky’s restaurants will feature a drive-thru.
“Looking forward,” Bartlett said, “we are continuing to evolve the brand to better meet consumers where they want to be met.”
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