With the Department of Labor attributing 60% of the nation’s March job losses to restaurant and bar closures, it’s clear that the hospitality industry has been hit harder by the coronavirus pandemic than just about any other market segment. Almost overnight, we find ourselves at an inflection point: Ready or not, we’ll need to rethink what we do and how we do it if we aim to survive.
Social Distancing and Space Allocation
Restaurant and bar owners know the critical importance of maximizing every square foot for greater occupancy. With social-distancing ordinances in place, their revenue will be jeopardized. Turning unused space into displays for on-brand retail items, which typically offer higher profit margins than prepared restaurant food, could help improve their bottom line. Texas Governor Greg Abbott recently allowed the state’s restaurants to sell products from distributors at retail, provided the items are in their original packaging—a good idea, given the food shortages that consumers are facing.
Around the country we are already seeing steakhouses reinvent themselves as butcher shops, upscale restaurants packaging together ingredients to make their signature dishes and cocktails at home, and well-known bakeries selling everything from flour and eggs to aprons, cookbooks, and spatulas. Selling meaningful merchandise enables customers to take a piece of their favorite place home.
Reimagining Takeout and Delivery
This pandemic will inflict lasting changes within the delivery and takeout ecosystem. Restaurants need to refine their relationships with third-party delivery companies to allow for more personalized experiences that provide the customer with clearly defined points of brand differentiation. The cost of these delivery services is substantial for both consumers and participating establishments, and the current value proposition needs to be challenged. Moving forward, the entire delivery process must evolve to better represent the restaurant and its ethos. From taking orders online to preparing, packaging, and delivering the food, a greater emphasis needs to be placed on ensuring that the quality of the home experience is consistent with that of dining out; this will be critical to any restaurant’s long-term viability.
Taking Advantage of the Liberalized State Liquor Laws
Beverage sales contribute roughly one-third of an upscale restaurant’s profits. Now that many states are relaxing laws against alcohol deliveries, establishments have the opportunity to expand revenue in ways that were previously unimaginable. Making the most of this opportunity will require proper packaging as well as better communication, and wine and cocktail lists will need to become more descriptive so that customers can make informed choices. Technology can also enhance customer experience by allowing beverage directors to provide virtual winery tours, post virtual tastings led by sommeliers, or track the wines customers have enjoyed in the past.
Telling Great Stories
To thrive in these hard times, restaurants and bars must make their distinct voices heard and forge strong relationships with their customers through social media and other online channels.
Even as states are easing their restrictions, experts are predicting that the pandemic will continue for the next 18 to 36 months. That means we’re likely to experience several bumps before we approach something that remotely resembles terra firma. That said, we will build the New Normal together—and the New Normal after that. Defeat is not an option.
This article was published in The Tasting Panel, June 2020 Issue.