5 Lessons We Learned from COVID-19

The pandemic didn’t break the restaurant industry; it merely shined a light on all of our chips and cracks. The problems we face may have been exacerbated by the COVID-19 crisis, but they are actually the result of long-term mismanagement and ignorance on our part.

Remember though, that in every crisis, there is opportunity. The next twelve to twenty-four months will be a time of rebirth. If we let it.

Not to downplay COVID-19’s catastrophic effects on lives and businesses around the world, but when we look for a silver lining, we can find five valuable lessons. Now, it’s up to us to remember them as we move forward and adopt to the ‘new normal’.

The Pandemic Inspired Empathy

At the start of the pandemic, the majority of American restaurants made their sales through in-person dining. When the world shut down, they collectively struggled to figure out other ways to generate revenue. Those that succeeded embraced “the pivot.” A lot has been said about the now ubiquitous “pivot”, but I will venture to say that the most successful businesses coming out of the pandemic are those that identified new revenue streams.

On the Tim Ferriss Show, Nick Kokonas said, “The operators who stayed open and pivoted their business would be the ones to survive when all was said and done.” Why? Because they learned all about empathy.

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They looked at their patrons and said, “Well, you used to come to us for indoor dining (as an example), but at the moment you don’t need that. So, what do you need now?” They then figured out new ways to serve their customers. It may seem like a small thing, but it’s actually huge.

Being able to put yourself into your customers’ shoes is an important quality for any business owner to have. The pandemic simply forced operators to rediscover that sense of empathy.

The Pandemic Showed us how to Get Creative

Over the course of the pandemic, chefs and operators were forced to get creative. It goes back to the example Kokonas gave: “We can no longer offer THIS; so what else can we offer?” This question got us out of our comfort zone. Together we brainstormed new ideas, and put exciting, new projects out into the world like Zoom cooking classes, at-home meal kits, retail ventures, and self-published cookbooks.

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We became little startups again, doing anything we could to try to serve our community. In the new normal, I promise that this is not going away. In fact, this sort of commitment to creativity will be rewarded.

The Pandemic Taught Us how to do More with Less

As we learned to pivot to new business models, we were forced to look more closely at our numbers. Restaurants have always operated with razor-thin profit margins, but new revenue streams required fresh eyes. We identified a host of new business models, many of which provided more reliable revenue, often with better margins. For example, I have a friend that invested $20,000 so she could publish her own cookbook during the pandemic. She then sold 2,000 copies at $40 apiece, for a total revenue of $80,000. That’s a 400% return on investment, something that would never be possible in a restaurant. Suddenly her eyes were opened to a host of new possibilities.

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Even within the restaurant, people quickly figured out which actions would drive the greatest amount of revenue, and operators all over the country found ways to do more with less. Especially in an industry that often struggles under the weight of our weekly payroll numbers, this is a profound realization.

  • What if we tightened our hours?
  • What if we closed certain days of the week?
  • What if we ran with three servers instead of five?
  • What if one manager could oversee everything?
  • What if we shrunk our menu?
  • What if we changed our concept entirely?
  • What if our future lies somewhere beyond food service?

Forget the business you had before and focus instead on the business you have now. The business you once dreamed of may be gone, but you now have the freedom to dream anew. Look at the numbers and let that guide you.

I learned this many years go, but often the only thing holding us back is our misguided attachment to how things should be. Simply replace “should” with “could.”

The Pandemic Sped up the Adoption of Technology

I’ve been ordering groceries online since 2003. It’s the greatest convenience in my life, and I would probably pay twice what they currently charge. I’ve spent the last two decades extolling the virtues of this service, and just about everyone I know has ignored me. Until March 2020. Suddenly when the world went on lockdown, everyone figured out how to order their groceries online. And I was shut out of my regular weekly time slot.

Careful what you wish for, right?

But deep down, I was thrilled. The world was adopting technology at a furious rate. In fact, everywhere you look, people (like my 70-year-old parents) were adopting technology in a way that two years prior would have been unimaginable. Branded apps, QR codes, online groceries, third party delivery, and on and on and on. How many restaurants have done away with traditional waiter service in lieu of table ordering? How many QSR concepts are now seeing increased profitability simply by introducing kiosks?

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Progress only moves in one direction, and I believe technology is the key to building better — and more profitable — restaurants.

The Pandemic Shifted Our Culture

Right now, we are witnessing the end of offices. As organizations see how productive their teams can be while working remotely, they are starting to rethink what a traditional working environment looks like.

The data is clear: even post-pandemic, a large amount of the workforce will never return to the office full-time.

This is going to have a profound effect on the restaurant industry. If a meaningful amount of the work force never returns to the office — as economists have suggested — what happens to the post-work watering holes by the train station? What happens to happy hour? Or the lunch concepts that have been so successful over the past ten years, like Sweetgreen, Chipotle, and Panera?

If executives can work from anywhere, who’s to say they won’t invite clients out to their homes instead of hosting fancy dinners at high-end restaurants? If expense accounts aren’t being used to pay for client events, what happens to some of our most celebrated restaurants?

Office culture is changing. Schooling (including higher education) is changing. Exercise routines are changing. And thus, so are our dining habits. Markets will die, but whole new industries will rise to serve audiences in bold, new ways. Each of us gets to decide — through our actions — which side we choose to be on.

Chip Klose is based in NYC, where he runs the marketing agency Chip Klose Creative, working with chefs and restaurant owners to help them grow their brand presence and increase revenues. Klose is also the host of a weekly marketing podcast, Restaurant Strategy, where he talks about many of the strategies and tactics he uses day-to-day in marketing restaurants. To learn more, visit ChipKlose.com.

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