Historically, there’s always been a large subset of consumers willing to trade-off value. Whether that’s for quality, service, or even taste. The price sets the expectation. Will the same be true regarding safety and sanitation, though? Can you skirt in favor of something else? Or has outward and visible cleanliness become “table stakes?”

Below is a look at what’s driving guests into restaurants. The two significant increases involve “sanitation standards” and “food temperature.” The latter reflects an increase in delivery, app, and alternative channel ordering and consumption of late, which drives awareness of temperature (did my food show up hot?). Simon-Kucher & Partners said innovative business models, such as delivery as a service, ghost kitchens, etc. will enjoy greater potential as a result.

But getting back to the former point, Simon-Kucher & Partners said lower menu pricing is not receiving the same attention as food safety in a post-COVID vision. Sanitation standards has become a top purchase criteria. It was not before COVID.

Here’s a look at practices themselves.

Another way to envision it.

There is opportunity. “Pent-up” demand won’t be restricted to more guests equal more dollars. Restaurants could see increased willingness to pay, which offers a chance to capture additional revenue through a reset in expectations.

“Making consumers feel safe and the need to continue to develop digital offerings have accelerated through COVID-19 and are not going away,” says Dave Clement, partner at Simon-Kucher. “Restaurant cleanliness has always been important to consumers but sanitization standards have now become top of mind due to the pandemic. This does not apply solely to tactics utilized in-store—e.g. hand sanitizer for guests and employees, more frequent cleaning, etc.—but also is relevant in alternative channels with contactless pick-up / delivery functionality and overt communication of safety measures brands are taking across their ecosystems.”

In Q4 of 2020, Simon-Kucher & Partners asked customers if they’d be willing to pay more. It was down 11 percent. After the pandemic? It’s up 6 percent, meaning consumers' willingness to pay once they can dine out safely again is greater than before the crisis.

Opportunity then, can come through extracting increased willingness-to-pay expected after the virus.

Naturally, there is price sensitivity by segment. Every brand has a core guest and a role to play. Strategic price increases are needed instead of just pulling the lever and charging more. Lower income and younger consumer groups continue to place higher importance on price compared to others, Simon-Kucher & Partners said.

The barbell menu approach was key for quick service, and casual dining, before anybody heard of COVID. It will remain so after. Value to get people through the door, and value for those who need it. Then let them climb the premium ladder.

Even with a broader willingness-to-spend among consumers, “value seekers” aren’t going away. And the economic picture will feel cloudy for a while. A near-term thing to consider, however, are stimulus checks and an anticipated boost in spending.

Below is a look at how this segment conversation might unfold.

Thinking beyond

Philip Daus, managing partner and head of the North American Restaurant Practice at Simon-Kucher, says there are a number of factors that will change how guests pick restaurants in a post-COVID era. As covered, the perception of sanitation standards is chief among them.

But there are other factors at work. “Presence in the third-party delivery app of choice is key to avoid churn in a digital world—chains will need to be present in all big players such as UberEats, Doordash, and Grubhub,” he says. “In that context, being smart about delivery fees and menu price inflation versus in-store pricing is becoming absolutely critical. Lastly, chains with a clear loyalty strategy, who invest in customers with high lifetime value and reduce churn proactively, will have an edge over competitors.”

Fast food spiked during COVID as guests traded down and sought the most readily available channels. Drive thru, digital, etc.

Simon-Kucher & Partners’ study suggests that dynamic will slide to normal over time.

Restaurant type purchase evolution prior to, during, and after COVID-19

Percentage of restaurant meals

Pre-COVID

• Fast food: 39 percent
• Fast casual: 23 percent
• Casual dining: 26 percent
• Fine dining: 11 percent

Q4 2020

• Fast food: 47 percent
• Fast casual: 20 percent
• Casual dining: 21 percent
• Fine dining: 12 percent

After COVID

• Fast food: 39 percent
• Fast casual: 23 percent
• Casual dining: 27 percent
• Fine dining: 11 percent

This isn’t entirely surprising. Much of fast food’s boom was tied to mandates over straight-lined demand. Who was open and who wasn’t. Also, sit-down chains tried to serve a category they had little experience in before. They had to cross awareness gaps quick service left behind decades ago.

For instance, nobody thought twice about getting McDonald’s takeout in April 2020. At their favorite steakhouse restaurant? A different idea.

Which brings us to the less stable corner of COVID’s disruption. Yes, customers are going to return to dine-in-centric brands in time. But they’re not going to abandon digital activity in full as they do so.

Order channel evolution prior to, during, and after COVID

Percentage of restaurant meals

Pre-COVID

• In-store: 51 percent
• Drive thru: 26 percent
• App/website: 23 percent

Q4 2020

• In-store: 36 percent
• Drive thru: 33 percent
• App/website: 31 percent

After COVID

• In-store: 46 percent
• Drive thru: 27 percent
• App/website: 27 percent

“As COVID transitions into becoming an endemic, and as a significant numbers of consumers will remain reluctant to share space at a restaurant even as mask requirements are lifted, tackling operational challenges will continue to be important,” says Patrick Ding, consultant at Simon-Kucher. “Best-in class restaurants create a hassle-free curbside pick-up and drive-thru experience and invest in related value drivers such as adequate packaging to assure food temperature. We also see more players invest in their own fleets to speed up delivery times.”

Just like menu price and other trends, the stickiness of which digital channel gets a COVID bump will vary across segments as the pandemic ends.

Digital channel share of meal orders after COVID by consumer segment

Percentage of restaurant meal orders via app/website

Urbanicity

• Rural: 22 percent
• Suburban: 24 parent
• Urban: 33 percent

Income level

• Lower: 25 percent
• Middle: 24 percent
• Upper: 33 percent

Age

• Young: 36 percent
• Middle: 28 percent
• Senior: 9 percent

So urban, upper income, and young guests are going to be most likely to tap digital channels after COVID.

What’s important to note, too, is the proliferation across the lexicon. Some part of every demographic is going to consider digital in the future. That wasn’t the case previously. Or at least it was so minimal it wasn’t worth investing toward. Customers tried digital this past year out of pure necessity. It’s in their playbook now, even if it’s not their preferred option.

Per Simon-Kucher & Partners’ study, restaurant websites and apps will figure more prominent than third-party apps, especially for quality-focused customers.

Percentage of app orders by app type after COVID

• Restaurant website/app: 57 percent
• Third-party app: 43 percent

The key value drivers for guests leaning toward direct apps and sites: cleanliness, food quality and taste, and speed of service.

For third-party app loyal users: Price and promotion availability.

Similar to app/website ordering, gains in delivery, curbside, and drive thru should last beyond the crisis.

Consumption method prior to, during, and after COVID

Percentage of restaurant meals

Pre-COVID

• At restaurant: 40 percent
• In-store pickup: 19 percent
• Drive thru: 22 percent
• Curbside: 7 percent
• Delivery: 12 percent

Q4 2020

• At restaurant: 19 percent
• In-store pickup: 22 percent
• Drive thru: 30 percent
• Curbside: 12 percent
• Delivery: 16 percent

After COVID

• At restaurant: 35 percent
• In-store pickup: 18 percent
• Drive thru: 23 percent
• Curbside: 10 percent
• Delivery: 13 percent

The high-level point here is that only 35 percent of orders are expected to be consumed in a restaurant after COVID, down from 40 percent pre-virus.

Delivery and curbside gains align with trends seen with app ordering both overall and from a segment standpoint with urban, upper income, and young respondents indicating the highest rates of adoption.

“Digital proliferation will continue to grow … especially with urban, high income and younger consumers as the value of convenience increases,” Clement says. “The digital race is real and brands that embrace it fully and implement it optimally will improve customer experience through faster and more customized interactions, ultimately driving growth.”