Image Credit: Michael Steeber
As product managers our job is to create products that our potential customers will want. We don’t often spend a lot of time thinking about how we are going to deliver our products to our customers. However, perhaps we should. If it turned out that how we get our products to our customers had an impact on how much of our product we were able to sell, then all of sudden we’d get very interested in just how this gets done. Some product managers have realized this, and they have all of sudden become very interested in drive-throughs.
Everyone Wants A Drive-Through
Produce managers realize that the demand for the humble drive-through lane is booming, as chicken joints, coffee makers, and other fast-food operators vie for what is in limited supply. Interest in drive-through real estate had been growing even before the arrival of the Covid-19 pandemic, but it exploded when the pandemic arrived and total sales volume for restaurants, pharmacy and bank properties hit a record US$12 billion. That represents a 43% increase from the previous year and a doubling in sales from 2012. What product managers realized is that coffee and fast-food customers gravitated to drive-throughs in the early months of the pandemic, when dining rooms were closed, and fear of infection kept people in their cars.
What has happened since then is that many customers have realized that they enjoy the convenience of drive-throughs, especially now that mobile ordering reduces wait time and the need to yell into a speaker to place your order. The migration of drive-through businesses from cities to the suburbs has also boosted the drive-through business. Properties that support a drive-through offer product managers the opportunity to cut costs in terms of both square footage and staffing.
A company that sells coffee and energy drinks, is a good example of the advantages of serving customers in their cars. Visits to the chain’s locations, which are almost exclusively drive-through, went up more than 50% during the pandemic compared with before the pandemic. The product managers at the company had experimented with cafe seating in the early 1990s but decided that the drive-through model best positioned them to grow. The company operates mainly in rural and suburban areas, where customer demand leans toward drive-through, and their staffing was easier without a dining room.
Drive-Throughs Change Everything
Competition for car-friendly real estate is up significantly since the start of the pandemic as existing operators expand. Other companies, including Starbucks, are developing more drive-through properties. Companies that had been previously dine-in only have started to open drive-throughs for the first time in recent years, including Shake Shack. A property on Long Island, N.Y., leased for 20% higher than its original asking price after four different franchise operators from the same fast-food chicken brand got locked in a bidding war.
The scramble for drive-throughs is causing prices to increase nationwide. The average property sold for $392 a square foot last quarter; this is about 7% higher than during the same period two years earlier. Product managers need to realize that finding drive-through real estate can be challenging, especially in densely built areas, because the properties need to have enough space to accommodate long lines of cars. When product managers are looking for potential drive-through sites, they may want to look at bank branches because these buildings are small, and the properties were designed to accommodate drive-throughs. What is happening is that bank properties are increasingly becoming available to product managers as mobile banking reduces the need for branches.
As more product managers get in the drive-through game, industry veterans are innovating. The Checkers and Rally’s burger joints, known for their double drive-throughs, are starting to devote one of their lanes at many locations to e-commerce customers, so third-party delivery drivers and customers who use mobile ordering can get their food faster. Every piece of data that product managers have suggests that people have developed that love for the ease and convenience of delivery, order ahead and drive-through in general.
What All Of This Means For You
Product managers for fast food and coffee restaurants are starting to once again discover drive-throughs. The pandemic caused customers to stop going out to dine in restaurants and instead they stayed in their cars and ordered take out food. As the pandemic has eased, these customers are deciding that they like the ease and convince of being able to use a drive-through lane to get the food that they want.
The growth in interest was caused by the Covid-19 pandemic. The need to stay in your car as your ordered your food caused the amount of traffic that was seen by drive-throughs explode during the pandemic. As more drive-through restaurants open in the suburbs business owners are discovering that a drive through can help them to cut their operating costs. Examples of companies that focus on offering drive-through service has shown firms that are growing rapidly. Competition for sites that can support a drive-through has increased. As prices for sites increase, it is becoming harder and harder to find the right site. Former bank branches often provide what is needed to create a new drive-through restaurant. Existing drive-throughs are evolving to boost support for ecommerce.
The drive-through is not something new. However, product managers are starting to discover that the pandemic has changed everything. The drive-through has become the preferred method that customers want to use when they are ordering food. This means that product managers are going to have to become good at selecting new store sites that can provide the drive-throughs that their customers are looking for.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think that it is possible to open a restaurant without a drive through today?
Click here to get automatic updates when
The Accidental Product Manager Blog is updated.P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
Just imagine if you were a product manager who was responsible for a very popular product. Perhaps this is a fashion product or a high tech product that everyone wants. Yes, your sales would probably be exploding; however, something else would be exploding at the same time – counterfeiting of your product. Other manufactures would see how successful your product was and then they would go ahead and start to make copies of it and sell it for less. As a product manager part of your job would be to put a stop to this kind of thievery. However, you first have to find the counterfeits that are being sold. How can you go about doing this?