Scary Pizza

Friends of Branded:

Happy Saturday and I hope you had a great week (and a Happy Halloween).

Halloween has always been one of my favorite holidays. Along with Thanksgiving, it’s a most welcoming and inclusive holiday where all are invited to engage as much or as little as they choose.

I’m currently in the parenting of a 9-year-old chapter where family costumes are our thing and I expect that will last up until our daughter decides that trick or treating with her parents (in costume) is no longer interesting to her. I’m game for keeping this going for as long as possible and that includes doing this as a grandparent if I’m so fortunate. 😊

Halloween means a lot of things to lots of people, but for the hospitality industry, and specifically, for pizza operators, this day mean BIG BUSINESS. In fact, Halloween is on the very short list of the most important days of the year for pizza operators. The Super Bowl might represent the biggest food delivery and off-premises day of the year for the hospitality industry, but a variety of cuisines play a role in meeting the demands of guests. On Halloween, the data shows that the most common dinner solution for parents is pizza and given this is a “mega event” for pizza restaurants, savvy operators are all over this with marketing promotions targeting pizza and late-night shareable offerings.

Mega nights like this aren’t for rookies, and the need for staffing and operational readiness is critical. I recall making a stop on a Thursday back in 2004 at one of our restaurants, Duke’s Original Roadhouse, in Murray Hill (that’s in New York City, JB). The joint was slammed, and we were completely understaffed for the crowd that had come to revel that day. The calendar said Thursday, but it was also St. Patrick’s Day and the opening of the NCAA Men’s Basketball Tournament. These two events collide on a Thursday one of our every six years. We weren’t prepared, but everyone pitched in, and we got through it (and I got to jump behind the bar and relive my glory days as a mixologist).

I think how far we, as an industry, have come and I’m specifically referring to the data & insights that help operators forecast demand and be prepared. Readers of the H^2 know about the “5Ps,” (Proper Preparation Prevents Poor Performance).

Gut feel, instincts and experience are all awesome! But gut feel, instincts and experience armed with data & insights are better.

I was reading late this week about the quarterly performance of some of Branded’s favorite restaurant brands as well as some of our favorite guests on the Hospitality Hangout.

Shake Shack put up some impressive numbers and since I know people don’t read the H^2 for quarterly restaurant updates, that’s not the path I’m going down. Yes, the numbers of course matter and for those that might care, total revenues were up 15.9% and the company experienced its 19^th consecutive quarter of positive growth (that’s impressive, but even more so given the current climate).

Some of the things I took away from Shake Shack’s strong performance was how attribution was given to the company’s in-app value platform (particularly around beverages) and how guests were receiving orders more than a minute faster, which increased throughput and customer satisfaction. The company also met or exceeded its labor targets across nearly all its units. Here’s a company that was on the front-end of embracing kiosks and proving that in a quick-serve environment, leveraging this technology, including its own app, can not only improve operations, but guest satisfaction as well.

Chipotle also reported and cut its full-year sales outlook for the third straight quarter as a result of foot-traffic decline and economic pressure on its core customer (younger folks), but it was the company’s plans to create more digital experiences and introduce more innovation that caught my eye. You can see this in Chipotle’s dedicated drive-thru lanes (“Chipotlanes”) for mobile customers which allow mobile customers to pick-up their orders on average in less than 30 seconds.

With digital ordering accounting for over 35% of its sales, Chipotle enhanced its app experience by adding personalization features and gamified loyalty programs and that’s attracted 5mm participants and lifted engagement across frequency tiers. These efforts helped drive loyalty members which reached about 20mm, and this isn’t only a sales channel, but a customer retention engine where its testing AI-driven solutions to reengage with lapsed users.

All of this reinforces my conviction that digital isn’t a trend, it’s the new infrastructure that operators need to win.

Guest expectations have shifted, permanently! Guests now expect digital convenience (this can include ordering ahead, paying ahead, loyalty, and personalization). According to the National Restaurant Association, over 60% of US adults prefer to order digitally when possible. There’s no doubt that Gen Z and Millennials are driving this and operators should embrace that for these groups, their default setting is mobile-first! Schatzy’s 3 sons (all in their 20s) won’t engage with a restaurant that doesn’t offer them a digital experience.

The data is unemotional on this topic and restaurants with more mature digital ordering programs are seeing 15% to 30% higher average checks versus those that rely on the phone or in-person orders. I still speak with many operators of quick and limited-service brands that won’t, for example, embrace kiosks b/c they feel it takes away from the hospitable experience these operators are trying to maintain for their guests. As a free market’s person, I respect that people get to make their own decisions (of course), but this view flies in the face of the data that says otherwise.

In addition to digital ordering, loyalty programs and digital marketing are also proving to increase repeat visits and create direct relationships between the operators and THEIR guests (yes, I’m always going to emphasize and make clear who I feel the guests belong to). These tools specifically reduce the dependency on third-party aggregators.

Operators that are embracing a digital strategy and toolkit are also getting paid in the newest and now critical hospitality currency, first-party data! Operators need to know who ordered as well as what they ordered, when they ordered and how often they ordered. This is what fuels insights and (in addition to gut feel, instincts, and experience) creates opportunities for menu innovation and labor forecasting.

For operators, a digital strategy is not simply a cloud-based point of sale and an Instagram account. It’s about an integrated ecosystem that connects front-of-house, back-of-house, and guest engagement through technology that talks to each other.

If you take away one thing from this week’s Top of the Fold, it’s this: restaurants that embrace a digital ecosystem outperform its peers that don’t by 5% to 8% points in same-store sales. A digital ecosystem is your triple crown as it delivers value for (i) operators, (ii) investors and (iii) franchisees.

Friends, operators, you’re now competing in the same data-driven landscape as retail and streaming. A restaurant’s digital presence, including its app placement, delivery platform visibility, and loyalty touchpoints, are all just as important as your location (location, location, location).

This isn’t about shiny objects or tech for the sake of tech. This is about treating digital as a key part of the hospitality experience as opposed to thinking its adverse to it. This about building a digital foundation to own YOUR guest relationships (and drawing from last week’s H^2, the need to choose tech partners that act like allies as opposed to toll booths).

Technology today is a modern expression of service. It shows care and thoughtfulness for your guests, and it complements the human touch, as opposed to replacing it.

It takes a village.

🎩 Men of the world, take note: GQ lays down 125 new rules of etiquette for 2025—and some might just surprise you.

🏀 The NBA’s latest gambling scandal has everyone talking. The New Yorker breaks down how “prop” bets made it all but inevitable.

🏨 Could The White Lotus really leave the Four Seasons behind? Here are the details on where the next season might check in.

🎶 Rolling Stone names Missy Elliott’s “Get Ur Freak On” the greatest song of the 21st century (so far). Check out the other 249 hits included in the ranking.

Don’t just scroll—click! Congratulate everyone on making the B List and send some LinkedIn love their way.