Wonder Gets the Consumer. Why Are Restaurant Chains Still Stuck in Brand Silos?

 

There is something almost amusing about the restaurant industry's relationship with innovation according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Give a restaurant chain a new piece of technology and executives will proudly announce that they are transforming the customer experience.

Give consumers the ability to order exactly what they want from multiple restaurant concepts in one transaction—and suddenly the old restaurant industry playbook starts looking very old.

That is what makes Wonder so interesting.

At FSTEC, Wonder executives described a future involving AI-generated meal planning, robotic food preparation, sophisticated sequencing software and drone delivery. The company says that, beginning as soon as next year, a Wonder location outside Dallas could combine its bowl-making robotics with Zipline drone delivery.

But from the perspective of the Grocerant Guru®, the robot isn't the biggest story.

The biggest story is that Wonder appears to understand something many legacy restaurant chains still don't: The consumer doesn't live in a restaurant-brand silo.

Restaurant Chains: The Consumer Has Left Your Building

For decades, restaurant chains have built their businesses around a simple proposition:

Pick our brand. Eat our menu. Buy our experience. Come back.

That worked beautifully when restaurant choice was relatively limited.

But today's consumer lives in a much more complicated food world.

The same consumer can buy breakfast at a convenience store, lunch from a restaurant, dinner from a grocery store's prepared-food department, snacks from a dollar store and groceries through an online platform—all in the same day or week.

And then the restaurant industry wonders why consumers aren't behaving according to the brand loyalty models created decades ago.

The consumer isn't confused. The industry is.

Wonder's Seven Grocerant Moves

1. Wonder lets consumers mix and match restaurant concepts

Wonder locations can offer as many as 30 restaurant concepts under one roof.

Think about how radical that is compared with the traditional chain restaurant model.

A consumer doesn't have to decide:

“Which restaurant am I going to?”

The consumer can essentially decide:

“What do I want?”

That is Grocerant thinking.

2. Wonder puts the meal ahead of the logo

Traditional chains spend enormous amounts of money building brand identity.

But the consumer doesn't necessarily want a brand.

Sometimes the consumer wants a burger.

Sometimes noodles.

Sometimes a salad.

Sometimes wings.

Sometimes a bowl.

Sometimes something completely different.

Wonder's model recognizes that the consumer's appetite can change faster than the consumer's brand loyalty.

3. Wonder is attacking the restaurant industry's sacred “one brand, one menu” model

For years, restaurant executives have optimized individual brands.

Wonder is asking a different question:

Why can't one physical location efficiently produce food from multiple concepts?

That is precisely the kind of question that traditional restaurant organizations have historically been reluctant to ask.

Why?

Because restaurant companies are structured around brands.

Consumers are structured around occasions.

That's a problem.

4. Wonder understands that families don't necessarily want the same food

This may be one of the most important parts of the model.

Families frequently disagree about what to eat.

One person wants Mexican.

Another wants Asian.

Someone else wants a burger.

Someone else wants a salad.

The traditional restaurant model says:

Pick one restaurant and compromise.

Wonder says:

Why compromise?

That is an extraordinarily simple consumer proposition.

And it is exactly the type of thinking that helped create the Grocerant niche.

5. Wonder connects “food for now” with “food for later”

Wonder owns Blue Apron and describes the businesses as “food for now” and “food for later.”

Traditional restaurant chains have spent years defining themselves by individual dayparts and restaurant occasions.

Wonder is thinking more broadly about the consumer's food life.

Breakfast.

Lunch.

Dinner.

Snacking.

Meal planning.

Prepared food.

Meal kits.

Potentially groceries.

That isn't a restaurant strategy.

That's a food-consumption strategy.

6. Wonder is trying to make variety economically manageable

Wonder says it has approximately 700 menu items and 1,000 SKUs and is developing automation to help manage that complexity.

That's where the robotics become strategically interesting.

The goal isn't simply:

“Let's replace a worker with a robot.”

The bigger goal is:

“Can technology allow us to offer consumers enormous variety without enormous operating costs?”

If Wonder can accomplish that, it attacks one of the biggest problems with restaurant variety:

Complexity costs money.

7. Wonder wants to own the “What's for dinner?” decision

This may ultimately be Wonder's biggest ambition.

The company has talked about using AI to create meal plans around consumers' tastes and dietary needs.

In other words, Wonder isn't simply waiting for the consumer to place an order.

It wants to potentially participate in deciding what the consumer should eat.

That is a fundamentally different relationship.

The restaurant industry has historically fought over the transaction.

Wonder appears to be thinking about the decision before the transaction.

And that is where the Grocerant Guru® has been watching the industry for decades.

Meanwhile, Back at the Legacy Restaurant Chains...

Here's where things get uncomfortable.

Restaurant companies continue to talk about brand equity, restaurant identity, loyalty programs, digital engagement and same-store sales.

All important.

But consumers aren't sitting around thinking about the organizational structure of Restaurant Brand X.

They are thinking:

“What's for dinner?”

And sometimes the answer is:

“I want something from three different places.”

The grocery industry figured this out.

Convenience stores figured this out.

Delivery platforms figured this out.

Virtual restaurants figured this out.

And now Wonder is attempting to build the entire operating system around it.

The Restaurant Industry's Great Contradiction

Restaurant chains say they are obsessed with the consumer.

Yet many still organize their businesses around the needs of the brand.

The consumer wants choice.

The brand wants consistency.

The consumer wants personalization.

The brand wants standardization.

The consumer wants multiple cuisines.

The brand wants one menu.

The consumer wants convenience.

The brand wants the consumer to enter its particular funnel.

See the problem?

The industry keeps asking consumers to behave like brands.

Consumers keep behaving like consumers.

Are Legacy Brand Managers the Neanderthals of the 1800s?

Here's the deliberately provocative question:

Are some legacy restaurant brand managers becoming the Neanderthal brand managers of the 1800s?

Not because they lack intelligence.

Because they may still be operating from an industrial-era assumption:

Control the product. Control the distribution. Control the customer. Control the brand.

But the modern consumer doesn't necessarily want to be controlled by a brand.

The consumer wants to be served.

There is a profound difference.

The old model says:

“Come to us because we are Brand X.”

The emerging model says:

“Tell us what you want, and we'll figure out how to deliver it.”

That is a much more consumer-centric proposition.

Four Questions Every Major Restaurant Chain Should Answer

1. Why does the consumer have to choose only one of your brands?

If a family wants four different meals, why should the consumer have to make four separate decisions, four separate orders and potentially pay four separate delivery charges?

2. Why are restaurant companies still protecting brand silos that consumers never created?

The consumer doesn't see your corporate organizational chart.

Why should the consumer experience it?

3. If Wonder can put 30 restaurant concepts under one roof, why can't the major chains rethink what a restaurant actually is?

Is a restaurant still a 3,500-square-foot box dedicated to one brand?

Or is it becoming a food-production and fulfillment platform?

4. What happens when the consumer becomes more loyal to convenience and choice than to your logo?

That may be the question restaurant executives should fear most.

Because a consumer can love your brand and still order something else.

Brand loyalty does not eliminate hunger.

Wonder's Biggest Threat Isn't Its Robots

McDonald's doesn't have to lose customers because Wonder has better robots.

Starbucks doesn't have to lose customers because Wonder has drones.

Subway doesn't have to lose customers because Wonder has 30 concepts under one roof.

The threat is more fundamental.

Wonder is challenging the assumption that the restaurant brand should be the center of the consumer's food decision.

That is a much bigger threat.

Because once the consumer becomes the center, everything changes.

The menu changes.

The kitchen changes.

The location changes.

The labor model changes.

The technology changes.

The delivery model changes.

And perhaps most importantly:

the brand's role changes.

The Grocerant Guru® View

The restaurant industry's greatest competitive mistake may be assuming that its biggest competitors are other restaurants.

They aren't.

The consumer has already demonstrated that the competitive set includes:

restaurants + grocery stores + C-stores + delivery + meal kits + prepared foods + virtual restaurants + increasingly automated food platforms.

There are no silos in the consumer's mind.

There are only eating occasions.

Wonder appears to understand that.

The question is why so many legacy restaurant companies still don't.

Three Insights From the Grocerant Guru®

1. STOP ASKING “WHICH RESTAURANT?”

The better question is:

“What does the consumer want to eat?”

The company that can answer that question most effectively may have an advantage over the company with the biggest logo.

2. THE RESTAURANT BOX IS NOT THE BUSINESS

A restaurant is increasingly becoming a food-production, merchandising, fulfillment and consumer-engagement platform.

The smartest operators won't ask how to protect the traditional restaurant.

They will ask how to make the restaurant more useful to the consumer.

3. THE NEXT COMPETITION IS NOT BRAND VS. BRAND—IT'S SILO VS. CONSUMER

Legacy restaurant companies built enormous businesses by creating powerful brands.

Now those same brands may become constraints if management begins protecting the brand architecture instead of following consumer behavior.

Wonder's most important innovation may not be the robot.

It may be recognizing that the consumer should sit at the center of the food ecosystem—not the restaurant brand.

The Grocerant Guru® has been saying for years:

There are no silos in the consumer's mind.

Wonder appears to be building a business around that idea.

The question for legacy restaurant chains is simple:

Are you going to follow the consumer—or continue asking the consumer to follow your brand?

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter