Today, 75 percent of Panera’s business takes place after 11 a.m. It’s 10–15 percent around standard breakfast times and another 10 percent between breakfast and lunch.
Burnett says value was in the “double-digits” from a food perspective from the attachment.
Another alluring result was the fact close to 75 percent of coffee redemption occurred off-premises. When Burnett underscored why Panera is better positioned to launch a subscription program than anybody else, this was a critical reason why. “We’re the only people who have the coffee and food,” she says. “We’re the only ones who have an ecommerce platform that’s robust enough to handle this along with omnichannel ways for you to get it. So whether it’s Rapid Pick-Up, drive thru, delivery, or on-premise. And we’re the only one with a loyalty program to really enable it.”
Panera 2.0, the company’s technology label, includes, to Burnett’s point, mobile ordering, Rapid Pick-Up, delivery—both in-house and through third-party, kiosks, and other rolling changes.
Panera expanded its menu to capitalize on convenience and to-go back in 2012, which feels like ages ago in this off-premises restaurant rush. Digital assets got an upgrade, too. By 2014, Panera was testing delivery with its own drivers (outside services also covered 7–14 percent of restaurants). This past August, when the company announced it was bringing on aggregators, it estimated it had delivered more than 28 million orders, or 7 percent of overall sales.
Panera’s 38-million-member loyalty program, which connects across channels, is among the largest in the business. For perspective, Starbucks has 18.9 million active U.S. members.
And there’s reason to believe the coffee subscription feature will balloon this figure even further. In the pilot, Panera saw about a 25 percent increase in new MyPanera members asking for the deal. And a vast majority of those were new to the brand, meaning it actually drove light users into restaurants. “It is a really, very interesting a desirable value proposition for the guest,” Burnett says.
Panera also picked up one additional insight, which Chaudhary said is “perhaps the most important.”
Guests can sign up for the program month-to-month currently. Other options, like semi-annual, will likely be introduced later on. But thus far with the current model, Panera is enjoying a 90–95 percent renewal rate each month, “which is fantastic,” Chaudhary says.
Guests coming in more often, buying more food, driving off-premises orders, and renewing. Together, “it gives us a ton of confidence in the business model,” Chaudhary says.