Episode Thumbnail
Episode 9  |  40:55 min

Digital Transformation with the Restaurant Industry

Episode 9  |  40:55 min  |  03.18.2021

Digital Transformation with the Restaurant Industry

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This is a podcast episode titled, Digital Transformation with the Restaurant Industry. The summary for this episode is: <p>We hope you’re all feeling hungry as we have a huge amount of information to digest on this culinary-themed episode of Uncaged Wisdom. Whether you’ve spent more time in the front or back of the house it has never been more important for Restaurant brands to invest in their digital marketing technologies.&nbsp;&nbsp;</p>
Takeaway 1 | 00:52 MIN
🍲 - Cheetah Digital, a perfect dish for Restaurant Marketers
Takeaway 2 | 01:38 MIN
🍳 - Why has the restaurant industry been slow to adopt new marketing technology?

Building Your Restaurant’s Digital House

We hope you’re all feeling hungry as we have a huge amount of information to digest on this culinary-themed episode of Uncaged Wisdom. Whether you’ve spent more time in the front or back of the house it has never been more important for Restaurant brands to invest in their digital marketing technologies. 

  1. A strong foundation. Build upon Unified Data (customer and transactional). 
  2. One load-bearing wall. Next-Gen Loyalty (move beyond earn and burn).
  3. Another load-bearing wall. Cross-Channel Messaging (meet customers where they’re at, across various digital touchpoints). 
  4. A good roof. Behavior-changing Personalization, covering our two walls and foundation (show customers you care and want them to be successful).
  5. The right building materials/contractor. Natively Integrated solutions (build your digital house using a single provider).
Guest Thumbnail
Kevin Sanders
Industry Solutions Director, Restaurants
Our special guest is a former restaurant executive who has previously led marketing and digital technology for fast-casual restaurants, served as CMO for digital ordering brands used throughout the industry, and also taught both undergraduate and graduate-level marketing courses as an adjunct professor. Today Kevin Sanders is Cheetah Digital’s Industry Solutions Director, focused in particular on leading our growth in the restaurant industry.

Julian Bracey-Davis: Don't go for wolf contractors. Don't go for a sheep in wolf's clothing. Don't lick toads.

Kayla Siegmeier: Uncaged Wisdom, inaudible digitals podcast for modern marketing.

Julian Bracey-Davis: Hello again, and welcome back to another episode of Uncaged Wisdom, the podcast for modern marketers. I'm your host, Julian Bracey- Davis.

Kayla Siegmeier: And I'm your host inaudible, Kayla Siegmeier.

Julian Bracey-Davis: I hope you're feeling hungry as we have a huge amount of information to digest on today's culinary fiend episode, wherever you spent more time in the front or back of the house, it has never been more important for QSR brands to invest in their digital marketing technologies. With today's guest, we're striving for Misa plus, how QSR marketers can get everything in its place digitally. You see restaurant terms, I'm all over it. Our special guest is a former restaurant executive who has previously led marketing digital technology for fast casual restaurants served as CMO for digital ordering brands used throughout the industry and also taught both undergraduate and graduate level of marketing courses as an adjunct professor. Kayla, we best learned some things today. He's Cheetah Digital's industry solutions director focus in particular on leading our growth in the restaurant industry. It's Kevin Sanders. Welcome Kevin.

Kevin Sanders: I'm glad to be here.

Kayla Siegmeier: Our inaudible question today, what is the worst or weirdest thing that I've ever eaten.

Kevin Sanders: Wow. Worst thing that I've ever eaten. I have had alligator before. Yeah. So that was an interesting experience.

Julian Bracey-Davis: What's your favorite food as well?

Kevin Sanders: I'd have to say I'm partial to Mexican food. I am a big fan of the old TexMex in particular, but it's hard to pass up a good smothered burrito.

Julian Bracey-Davis: We've titled this, building your restaurant's digital house. And as I mentioned that we'll be looking at how marketers in that world can approach using marketing software, digital marketing software to their advantage and really up leveling what they're doing today or thinking about how they should be approaching that i the future. But to start off, love to know a bit more about yourself, because you have tremendous background on multiple fronts in this space.

Kevin Sanders: Yeah, I think my restaurant journey really began really on the agency side. I was working for a marketing agency at the time and one of our clients was a relatively large restaurant chain. And so I spent a number of years working on that restaurant chain, really helping them with strategy and branding and really got to understand the way that the restaurant industry worked. And then had the opportunity to go and join a restaurant chain of fast casual brand as their head of marketing. And so, I climbed inside the machine and spent a number of years working with franchisees and the operations team and the digital team and everything else, really leading a lot of the national and local marketing programs as well as the marketing technology for that brand. And when I finally left there, one of our key vendors at the time was a company called Splikit and they were our digital ordering vendor. So they built our app and our digital ordering capabilities. And they invited me in to be their CMO. And so I joined that group as a CMO working really on the services end and the technology side of the restaurant house. And we acquired another company called Onasis and was the CMO for those folks as well. And so, I've had all the different sides of it, in terms of being both a restaurant executive, but also working deeply with the various components of restaurant technology.

Kayla Siegmeier: Why don't you talk about where we're at in terms of the restaurant landscape. So 2020 changed the game completely, and I'm guessing that it's not going to go away now that we're all trained to expect things delivered out to a car, getting things off premise really easily. It'd be really interesting to hear from you what the consequences of 2020 really were and what does that mean for this year?

Kevin Sanders: Yeah, absolutely. Well, obviously COVID had a profound effect on the restaurant industry. And interestingly, that was a really a story of the haves and the have nots though. You had some chains actually that did really well. If you were a pizza concept or a wings concept, for example, or if you had a strong digital engagement program already in place and were easy to shift your business into more of an off- premise way of doing business, then, you might've done pretty well last year. In fact, there were a number of chains that had record years surprisingly. But if you were a casual dining chain or a fine dining concept, or if you were unfortunately behind the curve when it came to digital technology and weren't as prepared for it, then not so much. And unfortunately those segments of the market really suffered, and it's really unfortunate. But really what happened with COVID is, it just accelerated these changes in consumer behavior that were already in motion prior to the pandemic. We were already, as you mentioned, starting to migrate to this off premise model more so and COVID just forced the restaurant industry to accelerate those changes much more rapidly. And to their credit, many of them pulled off remarkable transformations of their business in a matter of weeks, to transfer from all on premise to a largely off- premise business. And it's a Testament to the folks in that industry that they were able to pull off some of that.

Julian Bracey-Davis: So again, I guess the best way is to hand over to yourself to set up step. So what we're going to talk about today, we'll go into the different steps starting off with the foundations when it comes to building a house, but before we even dive there, I just wondered if there was a way that you wanted to set up what we're about to go through?

Kevin Sanders: When I look at restaurants in general, they use a lot of different types of technology, and I think it's easy for marketers to think of these as individual tools. But it's really important, I think to think of these as a system of integrated pieces and integrated parts. And therefore, I think of the metaphor of a house as a simple framework for thinking about how to go about assembling this marketing tech stack in a way that allows these technologies to build on each other, to get to the point where you can really truly deliver the types of customer experiences that a restaurant consumers are expecting today.

Julian Bracey-Davis: We got to start off with these foundations and what for QSRs particular, what are those? How do you build up from this? What should we be looking at?

Kevin Sanders: Yeah, well, I think the foundation of that house, as you mentioned, is the critical piece of this. You need to provide that platform upon which you can build this digital tech stack. And the foundation of that is this idea of unified data, this ability for restaurants to consolidate both their customer data, that is what they know about their customers, with all these transaction streams, that are out there. And your ability to integrate all of the data that you have from all the various streams that you're collecting in and create that unified system of record that provides that single view of the customer that we all desire. Because again, that really truly becomes that foundation upon which you can build the rest of this house. And so you need to be able to have a system that is flexible enough to capture all the different streams of customer data that you're getting. And then consolidate it in a way that you can act on it that it becomes actionable. And so the foundation of our house is this idea of capturing all that data and unifying it into a single platform that you can then use.

Kayla Siegmeier: What do you think is making that such a hurdle for marketers? Because we know that it is. We hear it from our clients every day, the prospects that we talk to, what do you think is really standing in the way of being able to create that true foundation of unified data?

Kevin Sanders: Well, I think the biggest piece of that is we talked about a little bit already, is that idea of having so many different streams of data, and so many different signal points of data across all the touch points that you have with your customers. I mean, when I was leading the marketing team at a restaurant chain, I had a different email vendor. I had a different SMS vendor. I had a different mobile app vendor, a different payment vendor, different gift card vendor, different ordering vendor. I had all of these different vendors and none of them were built on the same platform. They couldn't integrate with each other, they couldn't talk to each other, they couldn't share information. And I became the source of consolidation and unification of all that data. And as a result, you just have this tremendously fragmented and siloed data streams that aren't really actionable. And so I think that's clearly the number one hurdle. And as I mentioned already, restaurants have a lot of different types of technologies because there's lots of different ways to engage with consumers.

Julian Bracey-Davis: A single source of truth, that's what we should be striving for, where we can recognize customer behaviors and obviously action all of that information. That's what we need running through everything. That's our foundations. So, I'll first wall.

Kevin Sanders: Yeah, so I think you've got your foundation for your house. And I think the first wall, again, if you're thinking of this visually that one of the walls is this idea of next gen loyalty. Loyalty programs, I think are so critical for restaurants because they become the entry point into the digital ecosystem. If you think about how most folks are joining a restaurant loyalty program, it's by downloading the app and signing up within the app. And by doing so then you're opening up not only the digital ordering capability through that app, but you're also opening up the direct communication channels as well. And so I think a loyalty program done properly really becomes the gateway to that digital relationship with the customer. And I think they're really important to have, but it's not good enough just to have a loyalty program. I think what you really need to have is what I call next gen loyalty or 2.0 loyalty. And that is a program that is beyond just the earn and burn transaction driven types of programs that we've had in the past. But everyone's talking today about personalization and I think a lot of restaurant brands are stuck with a first gen loyalty program that doesn't offer the flexibility that they need to create those one- to- one personalized experiences. And so, I think if we want to get to the point where we're personalizing offers, we're going to need a more sophisticated loyalty platform that is both robust enough and flexible enough to be able to deliver offers really down to a personalized level, to a one- on- one customer level. And unfortunately a lot of the loyalty programs of the past simply are not able to do that anymore.

Julian Bracey-Davis: What makes my head hurt often is thinking about the variables when it comes to franchises, even small franchises. When you've got multiple locations for a franchise, a big franchise in different parts of the city, different parts of the country, all of them will have a degree of unique offers or way of talking. How to brands approach that Kevin, with this perhaps next gen loyalty in mind? Is it about the right offer at the right time for the right person, the right place? So how would you even approach that distributed piece?

Kevin Sanders: It is very important because again, I think if you talk to any of the franchisees out there and again, I spend a lot of time with a lot of franchisees and they will tell you all about how unique their particular neighborhood is or their marketplace or the market that they're in or the area that they've operated has some unique things about it. And all the way down to the point where you've got really neighborhood and community involvement that you need to be able to support as a franchise org. And so giving people the flexibility to be able to take what you create for them, and yet customize it down to the level, or to an individual store level where they can deploy it in a way that is most effective, for their particular circumstances. I think is critical to allowing these franchisees to be as effective as they can in building their own businesses.

Kayla Siegmeier: One thing that you talked about earlier with the next gen loyalty around expanding beyond just earn and burn offers. We've heard a lot about value exchange. And a lot of the time we talk about value exchange in terms of capturing data in a consented way, but how are you seeing some loyalty programs that you're working with currently, or have in the past, starting to offer those more personalized experiences or driving more value beyond those offers. Do you have examples that you can share?

Kevin Sanders: We can use the word offer pretty loosely. They don't need to just be promotions or discounts. They can really be anything of value to the consumer. And so that might be things like unique content or relevant brand messages or entertainment or education. Things that solve people's problems, sharing helpful tips or simple thank you. There's lots of things that you can get into and if you've got a program that is flexible enough and robust enough, then you can pick the specific kinds of offers that you think will most resonate with the consumer based on what you know about them. And so I think that getting beyond or transcending beyond points and discounts, it really is the next best step in loyalty programs, is to get to the point where you can deliver that value exchange really on the customer's terms. What they think is valuable, not necessarily what you think is valuable. And is not always just discounts on your product.

Julian Bracey-Davis: Going back to building a house. I'm loving this. Some of the digital houses in the past, in the QSR restaurant have actually started with in many ways probably building the loyalty element. Maybe the loyalty program is the entire house. How do you approach revamping or even replacing what we're trying to build up together here today is a package of integrated solutions that really do allow people to action on the foundation of data that we've already talked about. But what if you've already got quite a sturdy piece that is an old loyalty program that's preventing building regulations.

Kevin Sanders: Yeah. If you really think about it, restaurants, we're doing loyalty programs long before most other categories were and all the way back to the punch cards. And so restaurants have been evolving their loyalty programs from very, very early on, but a lot of them, I think have just been that again, what I'll call first gen loyalty, which is simply, how do we deliver points to our customers and give them discounts and rewards off of our product. And that's a very simplistic approach. That's one piece of it. I think the other piece of it is how do you begin to segment those audiences in ways that make sense? So you can deliver relevant offers to relevant segments. And I think there was some very sophisticated, segmentation programs and order management platforms that can literally layer over the top of existing loyalty programs that can really add another level of sophistication to an existing loyalty program. So you may have a first gen loyalty program today, but there are offer management capabilities and Cheetah got one, that can literally lay over the top of your existing program to really take it to the next level and get it much closer to that next gen capability that is so critical.

Julian Bracey-Davis: On our other wall, that doesn't matter if you went in for left side wall or right side wall, it's fine. Whatever your preference is. But you mentioned there actually the importance of delivering the right offer, the broad kind of offer. I suppose, the nice way to tee this up is making sure that we're being able to deliver it in the right way. So is that a good way to talk about messaging and the third piece, which is our secondary wall? How would you like to introduce the part three of our house?

Kevin Sanders: Right. So the other wall, one wall is the ability to really customize your audiences and deliver those kinds of offers in a really robust way. The other wall there then becomes that delivery mechanism, how you get those offers to folks. And that becomes how you message, how you deliver and activate on those messages. And that is a cross channel messaging platform, that it can allow you to deliver those offers, really in a way that meets customers where they're at. We're going to want to engage with them through whatever channel they prefer to use and/ or are currently using. So if someone's reaching out to us, one channel we want to be able to communicate with them through that same channel, or respect their wishes to be communicated with through one channel or the other. And so, I think it's important to think about, are you able to do that? Are you able to deliver these messages in the ways that your customers or your guests would like to receive them? And the second piece of that is, can you deliver those messages in a cross- channel way? So that you are delivering those messages seamlessly and cohesively really across all those customer touch points so that if you're delivering it through one channel, it's also being delivered through another. And so consumers are getting that consistent cohesive messages from you. And it's important because consumers they've really shifted the way they engage with brands. I mean, COVID has certainly made it worse, but even before that, the consumers were shifting the way that they were engaging with brands. And I think it's important for brands to also recognize that they need to shift the way that they're communicating with their guests and their customers. So across channel messaging platform, I think is vital to be able to make sure that the other pieces of that house are being utilized effectively.

Kayla Siegmeier: How do you think COVID has affected the cross channel messaging strategy for brands and how the consumers are receptive of them?

Kevin Sanders: Well, again, I think one thing COVID has done is it's really changed a lot of the ways that consumers are engaging with restaurant brands in general. They're trying new restaurants because those were the only ones that were open. They're trying new foods that they perhaps haven't tried before, and they're using different channels to get that food, whether it's curbside or delivery. My mother, God bless her, had to learn how to order her food. And she's 80 years old and she's had to learn how to order food from a restaurant for the first time in her life. And so again, those were not well- worn paths, those were brand new engagement opportunities and brand new touchpoints. And so, I think as we go forward, the evidence is suggesting that many of those changes are going to stick. And so I think it's imperative that, if you think of it as like a snow globe. If we've shaken up the snow globe, and the question now becomes, where's all that snow going to settle. And I think brands need to be where that snow settles to bring another completely different metaphor into our conversation. And so I think adding those additional channels and making sure that you are available to talk to the consumers where they're at, is just vital to the way we're going forward.

Julian Bracey-Davis: We can put our house inside of a snow globe. A building it's strong, it's being shaken up and then we'll watch where everything falls around, but it's okay because we've got a strong roof, which we're going to get to next. Unified data is our foundation, next gen loyalty one of our walls. The other support structure here, the secondary wall is our cross channel messaging. Put a roof on and we're almost done.

Kevin Sanders: Yeah, well, the house there is, once you've had your unified data platform, and once you have the ability to deliver those highly personalized offers through a variety of channels, that really is the pieces that allow you to get to this idea of personalization. And I think that is the piece that we're all aiming for right now, but you need those other components. And so, we know the personalization. We talk about personalization as this continuum. Everything from is simply putting someone's name in an email, all the way up to real- time personalization and machine learning and these advanced journey orchestrations that we can get to nowadays. I think that where you need to find yourself in that continuum is the place where it changes someone's behavior. Where the level of personalization actually changes someone's behavior. And I think adding someone's name to an email is quite honestly an expectation nowadays, and that doesn't move the needle anymore. And so we're having to increase the amount of personalization that we're able to do, to get people to think differently about your brand and to then potentially change the way that they engage with and react to your brand. And so I think that's a big part of understanding how to do personalization in a way that achieves a level where you're actually changing someone's behavior.

Julian Bracey-Davis: Personalization, it's about communicating with your customers, but it's beyond just trying to personalize to sell. It's advising or talking to them in a broader way to, I think, as you put, to show that you care. It's not about just pushing the cell, which is where a lot of brands fall over, which is the point actually Kayla made in the last episode with Patrick Trip. How do you think about that? Because I know it's something that you're quite passionate about.

Kevin Sanders: Yeah. The goal of personalization in my opinion, is to communicate to the customer that you know enough about them because you care enough about them, and that you want them to be successful in achieving their goals. And even if that goal is a quick and delicious meal experience. And so I think that the more you know about somebody, it allows you to communicate how much you are interested in them. And I think that level of personalization is really what we want to do because that builds trust. That builds the trust in the relationship, that is what strengthens that and deepens that relationship. Being able to know someone well enough that you can deliver to them uniquely relevant offers and opportunities, based on their individual actions and preferences. I think that's the goal there is to strengthen the trust with the customer. And I think that's what restaurants do a very good job of that in the store. The challenge becomes how do we take that into a digital environment and still communicate a lot of those same feelings. And that relationship through digital channels.

Kayla Siegmeier: As you're talking about trust, I thought about all the conversations we're having right now with the third party cookies. And do you see a lot of restaurant brands leveraging that? And how do you think that the cookie going away is going to affect them?

Kevin Sanders: Well, I would say that again, it's not something that most restaurants have been dealing with yet, because again, they haven't really been that far down the digital transformation journey as many other industries have. So I don't think it's come up as an important piece. I think restaurants also tend to not be as website focused in terms of the way that they go to market. And so I think the cookies are obviously going to be a challenge going forward for everybody and getting past that. Again, I think we have some interesting technologies that can help brands do that. I don't think in the restaurant space, I'd be happy to have them build this house first.

Julian Bracey-Davis: Final section, our fifth part of house- building. Looking at our notes, it's actually comes down to how well a house is built. Can often come down to the labor used, and the materials at your disposal. And we all know about the people who built their house on sand, I think, was that the Friedel pigs? There's something somewhere about, don't get a wolf to build your house.

Kevin Sanders: Either one. Yes. We all know that there are some houses that are better built than other houses, carry our metaphor even further. And I think that, if you want to build that strong house, which we all want to do, then I think you have to really take a look at once you've built your foundation and your walls and your roof. It's how well do all these people pieces go together, so that they fit together and work well. And I think that is this idea of, can you get these pieces, as I mentioned earlier, can you get all of these disparate technologies to seamlessly integrate so that you can deliver that sort of unified message to the customer? And I think that is really getting around this idea of native integrations. The ability for you to get as much of this technology under a single house as possible, so that you can make sure that you've got a frictionless experience at the end of the day for these consumers. And when I was in the restaurant chain, like I said, I had all these different technologies and none of them worked together and it was a nightmare. And it really impacted in a negative way, our ability to be effective in terms of marketing to our customers. And it's not enough just to have the pieces, but need them to work together seamlessly to make the whole greater than the proverbial sum of its parts.

Julian Bracey-Davis: Now we can put all Cheetah spots on or whatever we want to call it. And frankly, this is what we've been working tirelessly over the past 18 months to build. We've been building our own house, Cheetah, we'd be building these parts. From someone who's joined quite recently, but who has seen the industry evolve and seeing the software and MarTech that's available to people, could you give us a little indication of how you said just early on the way that Cheetah can bring all those pieces together?

Kevin Sanders: When I first started considering joining the Cheetah team and really getting into the technology and getting an understanding of what it is that we had, once I got a handle on this, this is exactly what I wanted when I was the head of marketing for a restaurant chain. I was desperate for this collection of capabilities that can all seamlessly and natively integrate and work together. It wasn't possible, back when I was sitting in that seat, but it is possible now. And that is what's made me so excited about this Cheetah customer engagement suite. Honestly, this is the reason why I'm in this company right now, is because I saw this technology and said, this is exactly what the market needs. This is exactly what I wanted and was desperate for. And I'm so glad that somebody has pulled it all together in a way that is built around marketers with marketers in mind, that they can deploy this thing in a very easy and seamless way to engage customers in the way that they want to be engaged. Ultimately that's the reason why I joined the company was because I saw this technology for what it was and knew how important it was to the restaurant industry in particular,

Kayla Siegmeier: One question I had in this area is around organizations where they are quite siloed. What is a process or a recommendation you have for them in terms of trying to work cross- functionally or help consolidate the tech?

Kevin Sanders: Well, one of them naturally is to work with partners that have as much of it under a single roof as possible. The goal is to have as few vendors as possible in the restaurant space. And so, the ability to work with a provider that has a best of breed solution across multiple technologies is I think, again, one of the most important things, that you could do out there is why work with 12 vendors where you can work with three or four or one, that's the key. And so, there was a time when all those technology was being run by individual specialized companies. But we don't live in that world now. We live in a world war where someone like Cheetah can get together and build this natively integrated platform from the ground up for all these pieces to work together again, seamlessly and cohesively and create this unified customer experience out there. And so a big part of that is simply saying, instead of working with a whole bunch of different folks, how do we consolidate our vendor stack while we're building our technology stack?

Julian Bracey-Davis: Well, I think we've built a strong house together, but what we're trying to do here is, it's communicating with people so they understand what we do and how we can help them and so they get it. The concept and framework you've come up with here really does land, especially with the QSR restaurant space. I can also see other people from other industries listen to this and go, it works for me in CPG. I can immediately see it coming across and maybe swap next gen loyalty for data acquisition, perhaps in that case. Because the funneling of getting more unified data into your foundations is perhaps more key.

Kevin Sanders: Technology has a tendency to be complicated. And it's certainly, there's so many options out there and so many different types of technologies that people are thinking about that it can very easily get overwhelming and pretty confusing. And I think a simple framework like this in my mind, I'm a pretty simple guy. And so I'm looking for a simple ways to understand how I can pursue my digital transformation, without it overwhelming me and me losing track. And then as you mentioned earlier, you'll end up with a wall and a roof, but no other wall and on a bad foundation. My goal with this was to think about this in a very systematic way about pursuing the types of technology you need so that they can all build upon each other and work.

Julian Bracey-Davis: If you're a QSR restaurant marketing person in that world and you're looking at this, or you've just listened to you talk today, would you recommend that they look at the pillars or the starting points and go through them in order?

Kevin Sanders: Yeah. And that's the whole idea of this metaphor, was this idea of how do you pursue this digital transformation in a way that is systematic and organized and linear in fashion so that you could build one technology on top of the other and then leverage that technology to make the next one better to make the next one better. And that's kind of the way that I put this together. And so, there's no point in having a next gen loyalty program, if you can't get your data. There's no point in having cross- channel messaging, if you can't put the offers together and content together to deliver to the consumer in the way that they need it. And all of that leads to this idea of getting to that one- on- one customer experience. And so again, you're supposed to thinking about this in this organized fashion, that was a hope anyway.

Julian Bracey-Davis: Looking at some of the blockers to digital transformation, or really just how QSR restaurant brands have approached digital, what have been some of the blockers or some of the reasons why it has been slower?

Kevin Sanders: Yeah, I think the restaurant industry has traditionally been a little slower to adopt technology. And a lot of that has to do with just the structure of the industry. Most of the large restaurant chains are franchised systems. So you've got owner- operators out in the various marketplaces that are buying franchise units and then standing them up and operating them. And so you have this very decentralized structure, and as a result, it's been hard for restaurants to get a unified platforms system- wide that can execute a lot of this digital technology through. You've got systems that have multiple point of sales systems, for example, and multiple mobile apps potentially. And, a lot of technology that is actually being driven at the franchisee level and that creates this fragmented tech stack. And as a result, it's a more challenging to try to get that to migrate. You also have the biggest technology piece, arguably within a restaurant has been the point of sale system. And that industry has transformed itself into these much more nimble and less expensive cloud POS platforms. But a lot of the older restaurants are stuck with these large tech stacks that are legacy systems that are they're simply outdated. And it costs a lot of money to upgrade those. So, you end up with a very fragmented system that doesn't allow the corporate brand or the franchisor to execute down to the individual store level as effectively as they'd like to. And so, you're seeing that being corrected very quickly, lots of consolidation of POS systems and digital ordering systems and everything else, and they've had to. So they've gotten much better at consolidating that, but it's a big part of it. And I think the other challenge with that is, you think about all the different ways that you can order from a restaurant. You can order obviously in the restaurant itself, you can order through their mobile app, you can order on their website, you can order by phone. You can order obviously in a kiosk potentially that's somewhere in the facility as well. And so there's all these different ways that you can order food. And as a result, those are all different transaction streams that then all have to be consolidated together. And that is a challenge as well, that is not seen in many other industries.

Kayla Siegmeier: One interesting thing that I've heard about recently is this concept from the end of 2020 with ghost kitchens. So how can you make as much food as possible with as little people as possible? Where do you see that happening in the next few years?

Kevin Sanders: Yeah, so there's two different concepts around that idea. One is a ghost kitchen. And what it goes kitchen is really is nothing more than the ability to produce the food, in an off premise location. Not in the actual, within the four walls of the restaurant, have a separate location available for delivery on the orders. And what that does is it frees up your kitchen to essentially handle the on- premise business, while still being able to satisfy the needs of the off- premise orders that are coming in. So you'll see many restaurants right now, having these satellite locations that do nothing but handle third third- party delivery orders or their own in- house orders for delivery. So, I think that is an interesting new part of the industry. It's a pretty small one right now, and we'll see how it grows in terms of, whether it takes over a large chunk of the business. But I think it's smart for all restaurants to think about how you can get outside of a constraint like your kitchen in order to serve as many of those customers as you can. And, the other side of that is what they call a virtual kitchen. And a virtual kitchen is like a virtual brand. It's a separate brand that is a virtual brand. And so it has no location that you can go up to and there's no dining room and has no place to walk into. It exists entirely at a virtual level. They also call them cloud kitchens and it's the same concept. And so, you're seeing lots of concepts experiment with different types of food in these virtual kitchens. Because again, some food is transported easier than other food. And so things like pizza and wings, they travel really well. And the food doesn't suffer, when it has to be transported over distances over time. Whereas other concepts, their core menu items really suffer when you try to have them deliver it. And so, that really gives again, restaurants, another stream of revenue to explore ways of satisfying the needs of those customers.

Kayla Siegmeier: How do you see marketing rolling into that? So you have this brand and they develop, let's say taking the virtual kitchens into this, they are developing a whole sister brand that has no location. What are some of the ways that you see marketing strategies being redeveloped in order to accommodate these new kitchens that are popping up?

Kevin Sanders: Yeah, well, the biggest challenge obviously is if you're creating a virtual kitchen, you're creating a virtual brand and that brand has to be developed like any other brand would be. So I think the biggest challenge for restaurants who are looking at a virtual kitchen idea, is can they effectively build a brand that consumers will know, like and trust, such that they'll want to do business with. And we all know having spent as much time in the marketing industry as we have, it's not easy to get there. And so, I think there's a particular challenge when you have restaurant concepts that are already well- known and already have strong brands that then want to go off and create an entirely new brand that nobody knows about and really can't directly experience. And how effective those companies are going to be in establishing those new brands, because until they do that, I think it's going to be a challenge to get some of those virtual brands to become as successful as the restaurants may want them to be. Because I think they take for granted the power of the current brand that they have.

Kayla Siegmeier: So Kevin, we like to close out with a little piece of Uncaged Wisdom from our guest. And this can be anything, it does not have to pertain to the topic we talked about today. Just any type of wisdom you'd like to impart on our listeners.

Kevin Sanders: What I have found over my career in marketing is that it is very easy for marketers in particular, to get overly focused on campaigns and on executions of campaigns and lose sight of the initial intent on why we're doing this in the first place. In other words, we get very focused on activity and not on the strategy of what we're trying to achieve. And so I think that, if I could give any advice to the marketers out there, it would be that, if you don't know where you're going, any road will take you there. And so the key is to be able to understand what it is that we want to accomplish, and then make sure that we're staying on the most direct path toward that destination.

Julian Bracey-Davis: Kevin, thank you very much though. It's been a fantastic chat today. We hope you enjoyed it.

Kevin Sanders: I did. I enjoyed it very much. Thank you guys for inviting me.

Kayla Siegmeier: Subscribe to Uncaged Wisdom for the latest and greatest in digital marketing insights and how they're solving problems with software and strategies.

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