Panera 2.0: Order Your To-Go Bread Bowl Via Your Smartphone

Source: http://www.flickr.com/photos/scelera/

Ordering at Panera Bread (NASDAQ:PRNA) just got easier — and more technical. CNN reported last week that the fast-casual restaurant chain is getting ready to roll out a little thing called Panera 2.0, the company’s new option that lets customers make to-go orders on their phones. The company started testing Panera 2.0 in a Boston cafe in 2011 and has since expanded the launch to 15 other locations total in Boston and Charlotte. Last week, Panera executives announced their plans to introduce Panera 2.0 to the entire organization by the end of 2016. Say goodbye to slow-moving Panera lines and hello to fast service.

According to CNN, about 40 to 45 percent of regular Panera customers order their food to go, and that’s why the company has been working to restructure its system — so that its 8 million customers aren’t crowded into a single-file line, drawing complaints of slow service. That takes away from the fast service guarantee that Panera has. Ron Shaich, the company’s CEO, explained at its investor day last week in Charlotte: “We had a one-size-fits-all-system. Everybody came in and went in same line, whatever their needs were.”

But with Panera 2.0, things will be different. CNN reports that with the new system, to-go Panera customers will be able to place their order via a computer or Panera’s mobile app, and then request a time to pick up. Upon their arrival at the restaurant, they will go to a designated area where they can see the status of their order and then pick up their food off a shelf. Sounds like a smooth process, and what’s even better is that both to-go and eat-in customers will also be able to place orders at touch-screen kiosks in Panera restaurants. Executives hope this will keep the stores’ lines shorter and offer those who do want to order at the register a shorter wait.

Investors showed excitement about the continued rollout of Panera 2.0 at the company’s summit last week. Panera loyalists should be even more excited, as according to CNN, at least 100 restaurants will be using the enhanced system by the end of the year. It has taken Panera significant time, money, and labor to make its Panera 2.0 dream a reality, but many investors believe that the payoff will be worth it. CNN says that Panera more than doubled the size of its IT team since 2004 and will have spent $42 million by the end of the year as part of the e-commerce costs of the project.

As the new technology and accompanying kiosks roll into restaurants, franchisees will pay for some of the new initiative. All in all, Panera 2.0 will cost about $125,000 per location to run, and the company will be saddled with much of those charges.

The question is: Will it work? Will Panera 2.0 draw more customers in the mood for a quick meal away from places like Starbucks (NASDAQ:SBUX), McDonald’s (NYSE:MCD), and Chipotle (NYSE:CMG)? So far, it’s looking good for Panera. According to CNN, locations that already have Panera 2.0 witness about 20 to 30 percent of orders arriving digitally, and those numbers are only expected to increase as word spreads about the new initiative.

Customers are expected to latch on to Panera 2.0 not only because it makes the ordering process faster, but because it is convenient and lets consumers more easily customize their orders. Because the new system syncs up with the company’s MyPanera rewards program, a tool that saves previous orders and remembers them, after members customize a certain order, that combination is remembered forever, and regulars can easily choose their go-to order and even receive Panera loyalty points.

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