Emerging Capital PartnersEmerging ConceptsRestaurant Industry Insights

A Conversation with Sterling Douglass, CEO of Chowly

Recently, we had the pleasure of meeting up with Sterling Douglass, the co-founder and CEO of Chowly, a leading restaurant technology company. This brand has made incredible advancements in 2023, transforming the guest experience and the operator’s role in it. 

If you’re looking to expand, enter the digital age, streamline your POS integrations and off-premise capabilities, or simply offer your customers a better user experience, you won’t want to miss what Douglass has to say. 

Simplifying Restaurants’ Digital Off-Premise Strategy

In 2023, we’ve been hyper-focused on how we can help accelerate our restaurants’ digital off-premise strategy. In January, we launched our new Restaurant Control Center, giving restaurants control over different parts of their off-premise operations that they never had before. Now, they can set up charges, pause and unpause third-party delivery platforms, and add platforms with just a few clicks of a button. 

In February, we acquired Koala, a UX/UI company with a world-class user experience for the consumer. By combining that with our own world-class experience on the POS integration with restaurant operations, we can build our own first-party online ordering experience. So now, we’re not just helping restaurants take orders from the Uber Eats of the world, but also leveraging their own brand on their own site. 

Increasing Profits Through Smart Pricing

Earlier in May, we launched Smart Pricing, our dynamic pricing tool. Basically, it looks at things like weather, peak hours, holidays, and what order volumes are looking like in your surrounding area. Then, it adjusts restaurants’ prices on their third-party menus to make sure they’re taking advantage of the supply and demand curves. 

We’ve tested it out on one of our restaurant groups with 12 locations. We put about $10,000 of profit in each store’s pockets over the course of a 12-month period. 

Creating an Easy-to-Use Digital Off-Premise Strategy

What we’re building is a way for a restaurant to easily manage an entire digital off-premise strategy and build it within their current operational flow so that it’s simple for them to adopt and maintain on a go-forward basis. We’re a perfect fit for any restaurant that has an out-of-the-box template for their first-party online ordering, maybe something their POS offers or a standard template from someone in the space, and anyone with integration issues between their first-party online ordering and their POS.

The first step is to take out the manual piece of this process. This will help your restaurant run much smoother. You’re going to have fewer order errors, better accounting, and better reporting. And on the first-party side, while a template is a great place to start, we can give you something more customized, something that actually has your brand on it, including your logo, colors, style, and configuration, so that it’s really part of your digital brand and reflects how you interact with your customers. 

In today’s world, it’s up to the restaurant to meet the consumers where they are—whether they want to experience your restaurant through a third-party marketplace, the web, or an iOS app. We give restaurants that consistent experience across all these channels. And then, once we’ve got that in place, we can start implementing things like Smart Pricing, enabling us to maximize the off-premise part of your business and help you put more dollars in your pocket at the end of the day. 

Making Technology Simple

Chowly’s mission is to simplify technology for restaurants, which means that it must be easy on the operator. The operator already has 12 different priorities they are trying to focus on, so we’ve set it up so that they spend very little time with us. 

On average, our restaurants are getting up and live in about one business week, and about 10 to 20% of our restaurants are live the same day that they signed with us. We have built our entire system and processes around moving fast, being simple, and making it easy on the operator. 

Five of the top ten movers and shakers in the restaurant industry are Chowly clients. These aren’t small operators. These are fast-growing brands that are making lots of noise—brands like Wow Bao, Dave’s Hot Chicken, The Halal Guys, and Dickey’s Barbecue Pit.

These brands need to move fast—getting customers, reordering, retargeting, maximizing basket sizes, and hitting them with dynamic pricing at the right price and at the right time. And we help them accomplish this by making their process more efficient. We’re doing this for small operators, as well.

Ensuring the Best Customer Experience

Almost every operator has experienced this call, “My GrubHub order was missing fries.” If that call came from a first-time customer, that operator is thinking, I’ve got to refund this and hope they give us another chance or not refund it and know that I’m not going to retain this customer. 

And we know that customer retention is life and death for restaurants. Their ability to create regular and recurring orders is the key to their success. It’s making sure they’re providing a quality experience, no matter how their customers order, whether it’s on an iOS app, their laptop, or through a third party. If they’re trying to have fewer of those calls and ensure a great customer experience, this is a great way to do that and a key pain point that we can solve very quickly. 

Creating Brand Consistency

The other area we help with is growth. If they’re looking to grow, for instance, trying to go from one to three locations, they need certain things in place so that they can scale. If they’re trying to go from 3 to 25 units, they need brand consistency so that when they open new stores, customers know what to expect no matter which location they order from. 

For those trying to improve operations, retain more customers, or expand from one or two units, we will help them get there. Then, we also support the emerging brands growing quickly—like Dave’s Hot Chicken, the fastest-growing restaurant brand in the U.S., in 2022.

Customer Service Enhanced with AI

We’re also using AI in our engineering department to write better tests and produce higher-quality code. This is helping make our support team more efficient so that we can get answers to our customers faster.

When there are issues, we bring them into our reporting tools. Now, instead of a customer trying to put in eight different filters to get the exact report they’re looking for, they can just type in a question. They can say, “How many GrubHub sales did I do the first week of this month last year so that I can compare?” And we can spit that answer out. This is changing everything, from customer experience to the P&L statements of these businesses. 

Extending Your Brand into the Digital Age

One of the biggest trends in the industry is determining how we can keep the hospitality experience with restaurants when so many interactions with customers are digital. You don’t have as much in-person time. Yet, the reason we love restaurants is because we get to interact with people, try great food, and enjoy a great experience. The servers are nice, and they offer recommendations. All of this helps your customers feel connected to the brand, especially Gen Z’s. They love connections to brands, particularly ones that are mission-driven. They love being a part of that. 

And we’ve got a big challenge in the hospitality industry because so many of these restaurants have to create that connection when many of their customers don’t look up from their phones or screens or don’t even show up to the restaurant in person. And so, it’s on restaurants to figure out how they can extend their brand in this digital way, the same way they extend it to someone in-person at the restaurant. It’s about consistency, ensuring that every interaction they have, whether through GrubHub, on their phone, or online, still has a connection to the brand. 

Helping Your Customers Feel Connected

There’s a single-location hotdog place near me outside of Denver. And they have a loyalty program. But you don’t earn points. In fact, there’s no point system. All you get by joining is added to a mass text where the owner sends a funny dad joke every Monday morning, and it’s perfectly on brand for them. Like, that is why you go to this place. 

And even though I haven’t been inside the restaurant in two months, I still feel connected to it because I get a message from the owner every week. These are the things that restaurants need to continue to develop and push the envelope on. Discovering how they can build their brand digitally, interacting with their customers, and meeting them where they are. And it starts with brand consistency, and then it finishes with that same kind of creativity they’ve always had in the restaurant industry, but now in a digital aspect. 

Well said, Douglass. Well said.

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