How COVID Has Accelerated Customers Controlling Everything
The purchasing public was pumping up their platform BEFORE the pandemic.
The COVID-19 pandemic has accelerated the transformation of emerging consumer behaviors into today's expectations.
From mandated social distancing, to working and attending school from home — never before have we seen such a rapid, holistic recalibration of what normal life looks like around the world. Ten years worth of change was jammed into the past 12 months.
At its core these new expectations center around meeting the customer where they want from every company they interact with. There is perhaps no greater example of this dynamic than in the hospitality and food-service industries.
1. How they order
Mobile ordering, third-party delivery and curbside pick-up were nascent or non-existent for most hospitality companies at the beginning of 2020. Now these capabilities are table stakes for any business that serves customers in a world where public gatherings of any significance are still widely prohibited.
Just look at Honeygrow: A fast-casual restaurant specializing in stir-fry and salads. Before COVID-19, delivery service represented roughly 10% of Honeygrow’s revenue. Now it’s closer to 40%. In-store dining was 60% of revenue now it’s barely at 20%. How were they able to shift their operations to meet such drastic swings in consumer behavior?
I posed that question to Justin Rosenberg, founder and CEO of Honeygrow. According to Justin: Honeygrow has a roster of relentless general managers, as well as a data-driven corporate infrastructure. By leveraging Honegrow’s analytics, his GMs were able to scale the delivery and curbside pick-up business when on-premise dining went away.
When the world opens back up and people are able to gather in-person again, how much will consumer demand shift back to the pre-pandemic ways? Will curbside pick-up remain as ubiquitous an option three years from now?
Answer: If it’s better for “me”? Companies better support it.
2. When and who customers eat with
With more people working from home than ever before, and fewer people venturing out on commutes to their urban-office environments, there has been a noticeable shift in how they choose to eat out.
Back-to-back, all-day Zoom meetings are keeping people tethered to their desks. Which means the “lunch rush” has become a mad dash to the fridge for leftovers. As a result demand for noon food service has significantly declined in the hospitality industries.
Brett Schulman, the CEO of Cava — which operates fast-casual as well as fine dining locations—confirmed that dinner is the new lunch when I spoke with him in January. In fact, the increase in dinner business has met or exceeded the decline in lunch business at Cava.
One reason for this consumer behavior shift could be that dinner invites more potential customers than lunch did in the past. With supper comes the whole family. Spouses and kids are part of the order. Not only does this increase order size, it creates opportunities for different food choices or arrangements that were not identified pre-pandemic. For example, Cava has experimented with family-style menu options so that everyone can enjoy the same feast instead of having individual orders.
What percentage of people who currently work and learn from home will go back to the traditional 5 days commuting to the office or school? Will the lunch rush be back in 6 months to a year?
Answer: Almost everyone is planning for a hybrid.
3. What consumers consider hospitality
Before all thing pandemic, the Fitler Club in Philadelphia was a multi-function “third place” where members could convene, work out, eat, socialize or even hear an inspirational speaker.
Social distancing mandates could have easily destroyed Fitler’s entire business model. But it didn’t. When I spoke with Fitler’s President, Jeff David, a few weeks ago, he credited his leadership team’s decisive action and creative thinking.
For example: To help members stick to their workout routines, Fitler loaned out dumbbells and medicine balls to members as if they were checking out library books. To keep members learning, Fitler went to streaming all of its online lectures. To satisfy demand for relaxation during periods of isolation, Fitler delivered booze to its members' homes.
Will more people crave a third place once the pandemic subsides? How will health inspections change moving forward? Will laws change to prohibit alcohol delivery once things return to “normal?”
Answer: I want it all and I don’t want to give any of it up.
If your business was fortunate enough to adapt and survive the rapid shifts in consumer behavior as a result of this plague? Be proud. But consumers will never be completely satisfied now that they know what’s possible. If you think all these new services are nice to have? Think again. Your customer has baked them into their lifestyle and expect you to deliver.
I’ve coached and interviewed hundreds of entrepreneurs over the last year and common themes return again and again. Obsessing over customer behavior data, listening to your customers and experimenting with new ideas. Create a culture of resilient leaders who have the authority and responsibility to make decisions quickly.
Entrepreneur Leadership Network Contributor