Eye on AI - July 3rd, 2020
Welcome to Aigora's "Eye on AI" series, where we round up exciting news at the intersection of consumer science and artificial intelligence!
This week, with Virginia moving toward Phase 3 reopenings, we’re returning our focus to the restaurant industry as we look at how fast-food chains have continued to digitize during the pandemic.
Fast Food Continues Moving Digital
We begin with an article out of ABS-CBN News, titled “New normal: McDonald's bets on chatbot, 'creative' order channels to reach consumers,” in which reporter Jessica Fenol describes how McDonald’s Philippines is continuing to expand its digital ordering channels to meet the demands of COVID-19.
“A McDonald's Facebook Messenger chatbot was launched in the fourth quarter of 2019 but has become more ‘relevant’ during the coronavirus lockdowns, [McDonald’s] marketing and brand extensions director, Oliver Rabatan told reporters in a video conference on Tuesday,” writes Fenol. “…. The chatbot paved the way for ‘conversational commerce’ where consumers can go directly to the operator's Facebook page to order meals….”
When the pandemic hit, two important changes occurred in the evolution of chain restaurants: dine-in became unavailable, and customers became more reliant on digital communication. Those changes transitioned the idea of digital ordering from ‘nice to have’ to ‘need to have,’ and many of the most popular restaurant chains were quick to respond. In May, Panera Bread launched geo-fencing for their curbside pickups. McDonald’s Philippines recently expanded their digital ordering capabilities beyond the chatbot with park-and-pay and McDo pickup. And Dominoes this week announced it will be launching curbside pickup services similar to McDonald’s.
Digital curbside pickup is nothing new. Retailers like Safeway and Walmart began testing similar services well before the pandemic began (you may remember the movie car pickup commercial Wal-Mart launched last year). What is new is the rapidity with which restaurants are transitioning into digital takeout. Part of the appeal is geo-fencing, a technology many retailers and restaurants are utilizing that helps with tracking and increases delivery efficiencies. Tracking is done entirely through the phone. Once an order is complete, all the customer has to do is show up and the host is alerted.
Chipotle Announces Virtual Farmers Market for Restaurant Suppliers
Let’s continue with another article out of The Spoon, this one titled “Chipotle Launches a Direct-to-Consumer Virtual Farmers’ Market for Its Suppliers,” which details a unique way Chipotle is helping suppliers sell their product while restaurant demand remains low during the pandemic.
“Today [June 30th], the fast casual chain announced the Chipotle Virtual Farmers’ Market, which gives the company’s suppliers a chance to sell their goods directly to consumers via e-commerce,” writes Jennifer Marston of The Spoon. “.... this new virtual farmers’ market powered by a major restaurant chain is another example of the blurred lines happening right now between the restaurant and the grocery store. And with the trajectory of the pandemic uncertain, some restaurants look to be riding this restaurant-as-a-market wave for the foreseeable future.”
The pandemic has crippled supply demand in fast food chains. As demand continues to drop, farmers that had traditionally relied on fast food markets to unload their product suddenly find themselves with massive food surpluses and limited resources to shift into other buyer markets (grocery stores, for instance).
The Supplier Farmer’s Market by Chipotle offers a unique solution. While Chipotle doesn’t yet have the demand their suppliers need, they still need their suppliers. And they have the resources to help them find new buyers in order to keep them producing. Over the next two years, Chipotle is paying to host their suppliers on the Virtual Farmer’s Market. This also marks what may become an important transition in supplier / buyer dynamics, one that could last well beyond the pandemic. For more on this, I recommend listening to the recent Planet Money podcast episode, titled “A Mountain Of Potatoes With Nowhere To Go.”
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