Outback Steakhouse’s Digital Evolution, and the Amazon Effect on Restaurants – FSR magazine

Consumers are calling the shots more than ever.

Nobody is going to confuse Outback Steakhouse with Amazon. The same could be said, of course, with any restaurant, especially in full service. But the correlation isnt as far-flung as you might think, says Gail Seanor, VP of digital with Outback parent company Bloomin Brands.

Perhaps jumpstarted by the pandemic, consumers today demand the same access and convenience they expect from the ecommerce giant. Online ordering. Mobile. Loyalty. Seamless payment. Fast delivery. All of it, plus an in-store experience that separates sit-down dining from the food-as-fuel world of the past.

Seanor, who previously worked at TGI Fridays and AOL/Time Warner, calls these Uber-like experiences.

People want access to more information, she says. I feel like, historically, the restaurant industry really made the experience about the restaurant. And now, we all have to adjust and make it about the customer.

In July, Outback rolled a new app design that lays the foundation for what it believes will be cutting-edge features in the casual restaurant industry. Currently, the app allows for an easier ordering experience and fully integrated Dine Rewards. Coming later will be enhanced curbside with push messaging and order updates; modern menu viewing with easy-to-use add-ons; and guest suggestions based on previous orders.

Beyond the changing face of consumer expectations Seanor mentioned, Outbacks four-wall and off-premises business have set aside past realities. In the second quarter, digital sales accounted for 20 percent of the companys domestic business, a COVID-ignited 318 percent jump over 2019 levels. CEO David Deno said in July Outbacks app would ultimately showcase substantial investments we made to digitize and streamline the carryout experience, and accelerate our very attractive carryout channel. For whatever pros and cons restaurant chains associate with third-party delivery, especially this past year, carryout remains the golden egg of off-premises, thanks to its margin-friendly structure, the ability to control experience, and how it saves brands from asking whether or not they need to pass along added costs to consumers.

Bloomin generated more than $275 million in off-premises sales last quarter. Of that, $100 million belonged to third-party delivery (Bloomin also has in-house delivery). And, importantly, profit margins in off-premises are approaching those of Bloomins in-restaurant category. It's a gigantic part of our business, Deno said of carryout.

CFO Chris Meyer added Bloomins new online ordering platform led to higher add-on sales. Its brought up check averages a bit as well.

All said, its not surprising to see Bloomin place its app and digital capabilities at the forefront of innovation. Outbacks off-premises sales tripled during COVID as guest needs changed in light of lockdowns. With dine-in returning, the need has evolved into "expectation.

Through the first four weeks of Q3, Bloomins two-year U.S. comp sales tracked 15.2 percent higher as it maintained nearly $71,000 in weekly average-unit volumes in what was traditionally a slower time of the year. The key, in addition to pent-up demand filling seatsoff-premises proved sticky even as in-restaurant volumes improved. This past quarter, the company averaged $21,000 per restaurant, per week in off-premises. That was only down $2,000 per week, quarter-to-quarter, despite significantly higher in-store traffic. We want the off-premises volume to be a big part of where we go as a company, Deno said.

Outback launched phase 1 of its new app on July 6. It arrived with online ordering and loyalty management, as noted. These were straightforward features, Seanor says, but options guests continued to ask for. From my lens, I like to think its more intuitive, she says. Weve had a couple of conversations where somebody asked me, are we going to have to train our customers? From my view, if our field has to train our customers, then we havent done our job right.

So far, its been well received, Seanor adds. More recently, an update tacked on waitlist and pay-at-the-table functionality.

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Outback Steakhouse's Digital Evolution, and the Amazon Effect on Restaurants - FSR magazine