Panera finds digital helps recruitment, in unexpected ways

Panera Bread found that mobile payments significantly helped recruit drivers. Why? Fewer robberies.

coffee cup table java order
Karolina Grabowska.Staffage (CC0)

As companies start tripping over themselves as they rush to deploy as much digital technology as possible, they are discovering the kinds of insights that happen during deployments, not trials and never during engineering. Consider Panera Bread, which found that mobile payments significantly helped recruit drivers. Why? Digital purchases meant they didn't carry cash, which in turn meant fewer robberies. Bottom line: Digital payments let Panera recruit drivers away from rivals, even in communities where finding enough reliable drivers was already difficult.

Delivery of hot food products is, at best, difficult. The food has to be delivered quickly and yet drivers aren't supposed to speed or drive recklessly. And with high security risk and often low pay, driver recruitment is as difficult as it is essential.

"Our drivers have much better working hours, given that most of our deliveries occur during weekday lunch versus late night or on weekends. And because our deliveries go primarily to office workers, our drivers tend to get bigger tips, so they make more money," said Panera President Blaine Hurst. "And given those reasons and because our businesses are 100 percent digital or cashless, it's much safer, which is also an attractive selling point. As a result, we have not yet found a situation where we've been unable to hire the drivers that we need."

During a February investor's call, Hurst and other execs painted a picture of many digital gains.

"Panera today leads the industry in digital sales with 24 percent of sales in company cafes occurring digitally. This is the highest digital sales rate we know of in the industry outside of the big three pizza guys. Further, Panera's Rapid Pick-Up program, or what others call mobile order and pay, now represents 9 percent of our sales," said CEO Ronald Shaich. "Panera is growing its MyPanera program to an industry-leading 25 million members, representing 51 percent of our current company transactions. This is the largest percentage we know of any loyalty program in our industry."

To be fair, that requires a very narrow definition of "our industry." But given the walk-in traffic at Panera's, getting most visitors to use loyalty is impressive, even if it's "most" by the slimmest margin possible.

From an IT perspective, Panera CFO Michael Bufano went out of his way to credit "our investments in technology" for much of the company's financial success.

It's the unanticipated mobile benefits that are the most intriguing. Hurst made the point of tips being larger at corporate campuses, but it goes farther than that. Tips used to be heavily influenced by what change the customer was given after paying with cash — or a rough calculation based on a payment card receipt. Tips are not only much easier to give within many mobile apps, but the app can strongly suggest certain tips, suggestions that shoppers are often willing to take.

In a virtuous circle, good tips often lead to better compliments from management. Mobile allows tips to be easily tracked and attributed to specific employees. Management often associates big tips with good customer relations. If customers are tipping well, they are likely happy. And all of this from a simple little mobile app.

This even extends to table service, where the most frustrating part of a dining experience can be waiting for someone to bring the check. Mobile can wipe that, as Chili's has discovered with its tablet trial.

Mobile can make it easier for a customer to  repurchase favorite meals, as Domino's figured out during its initial social-media-order trial as well as its physical button follow-up.

As more business are embracing mobile, we're still figuring out the many unintended benefits. We're also waiting to see if the intended benefits last long.

Copyright © 2017 IDG Communications, Inc.

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