The foodservice industry is highly saturated with new concepts being launched every day, putting greater pressure on brands to stay relevant. To remain competitive, operators need to continually redesign their facilities, menu, and customer service experience. What was once typically a ten to fifteen year renovation cycle has shrunk to a five year loop, adding the burden of a shortened capital amortization of leasehold improvements. Adding to the complexity and cost is Millennials’ preference for a variety unique food offerings, delivered through enhanced digital platforms such as self-ordering and payment.
The accelerated speed of change and the heightened demand for selfie-friendly eating experiences is putting a strain on design investments and downstream facility renovations. For foodservice operators, trying to cut corners in design will undermine their final investment, irrespective of the dollar value. The reason is quite simple: Millennials put greater value on a sharable experience than the actual purchase of the product. They also tend to be more loyal to brands that invest in providing a great guest experience.
Very often we are asked at the onset of a project to determine the actual cost of both our fees and typical facility renovation investment for a retrofit or new build. The focus on cost versus value shortchanges the entire brand transformation process, especially if the brand experience is delivered through an extensive network of store locations. When you consider that the initial design investment will impact hundreds of facilities, with typical cost to implement running in the hundreds of thousands for each, cutting costs in the design process can have significant longterm negative implications.
Shortchanging the investment in well designed and executed restaurant concepts has many risks and business implications, some of the most salient we have outlined below:
1. Making too little or to much of a change
The key outcome of great design is the creation of strong curb appeal, the reconnection with lapsed users, and the invigoration of loyalty with current users. Too little facility design change results in the investment not being noticed by the desired growth segment. Too much, and you create confusion with existing customers.
Hiring a firm based on the lowest cost, or not seeing the value in hiring an experienced design firm, will put this fine balance in jeopardy. A restaurant experience has both the element of operations and also the guest experience, both delivering on the combination of great food, service, and ambiance. A weak link anywhere along the line will undermine the entire experience, leading to missed opportunities.
2. Compromising on the right design process
Great restaurant design comes from a strong and thorough design process with an iterative number of changes. A lack of a strong understanding of the design process often leads to not budgeting for the right number of revisions, or an inability to gain strong internal alignment.
Very often, clients will push back on the cost of additional requested revisions since they exceed the allocated budget. For many companies, requesting additional funds tends to be a humbling experience, putting at risk the very nature of effective brand transformation. The risk of not investing in the right number of revisions is a final design that lacks the right finesse to stand out.
3. Not leveraging the right insight tools
Often, in order to save cost, research becomes a “nice to have” versus a critical element of the design process. Not including research to validate the design direction increases the risk that the design does not resonate with the key target group. The rigor of research is also challenged, with focus group sessions being leveraged as a platform for deep insights when better quantitative tools are available.
Foodservice operators with multiple locations need to put greater importance on stakeholder validation and input to avoid not going far enough or going too far. Ironically, most operators purchase insurance for their restaurants but do not value research as another form of change management insurance.
4. Jumping to execution to quickly
Treating designers as executors of the client’s ideas defeats the entire process, and risks missing opportunities not currently being considered. To effectively design a winning solution, firms need to take a step back and evaluate if design is solving the right problem. Often times, the root cause of failed transformations is that brands have not defined the real problem to solve.
Jumping too quickly to execution in order to save money may results in the wrong problem being addressed, while the real cause remains unacknowledged. Another reason brands jump to execution too quickly is the desire to imitate a competitor who has the advantage of making the first move in the marketplace. Adapting another brand’s design will lead to a lack of credibility and relevancy, as no customer wants to associate with a knock-off restaurant concept.
5. Not investing in a prototype
Very often, clients want to skip the final and most vital part of the design process in which a live prototype is developed. Prototypes are the final insight tool in understanding how the new concept will meet the needs of both the operator and patron. Trying to reduce the investment in a prototype puts all of the design investment and operational insights at risk.
The old saying “penny wise, pound foolish” could not be more appropriate for companies trying to short change the design process by putting greater focus on cost reduction instead of investing dollars where they have the greatest impact—creating unique customer experiences. Ultimately, launching an ill-funded and thus, poorly conceived concept will leave a bad taste in both the operator’s and customer’s mouth.
