Mobile Payments Today interviewed Tropical Smoothie Cafe’s chief information and digital officer, Michael Lapid, to get his thoughts and insight on how the company he joined a year ago is faring and how the company’s newly released app is being received by consumers.
Since COVID-19 came on the scene, restaurants needed to keep up with the shift in consumer demand while also adhering to health and sanitation guidelines, ultimately needing to transform an entire business model.
Among being one of the fast casual restaurant concepts that needed to pivot, Tropical Smoothie Café quickly accelerated its technology to adapt to the pre- and post-COVID-19 environment.
Since making the changes to adapt to this pandemic environment, the brand has seen high success rates with digital sales consistently since the pandemic struck. In August, digital sales accounted for 35% of its total sales, with the best performing cafes seeing 65% in digital sales.
Under the guidance of Michael Lapid, chief information and digital officer for Tropical Smooth Café, the brand rapidly rolled out new and innovative initiatives to accelerate success and growth for its franchisees systemwide. The team was one of the first in its industry to implement curbside pickup, third-party partnerships, a guest contact center and advanced communication tools in the TSC mobile app.
“The new Tropical Smoothie Café app is an essential element for our brand, as it allows us to deliver enhanced experiences to drive engagement across various platforms,” Lapid said. “Given the mobile culture today, it’s a tool that will dominate the industry for years to come. While our brand was already developing new and innovative ideas to elevate the TSC mobile app, the pandemic helped us accelerate our efforts in order to better accommodate our guests. Our new app and loyalty provider will allow us to deliver personalized messaging, convenience and easier engagement platforms to our guests.”
Following are Lapid’s responses to a series of questions:
|Michael Lapid, chief information and digital officer for Tropical Smooth Café,|
Q: What are the new features of the app?
A: Tropical Smoothie Café partnered with Punchh, a robust loyalty and CRM system, to provide more convenience to the guest with increased self-service abilities including scanning receipts to earn rewards. By partnering with a best-in-class technology provider, our app will lay the foundation for growth and marketing automation by offering new features like choosing an order mode within the app (delivery, curbside and in-cafe pickup), improved order location accuracy, access to recent order history, saving favorite orders to make reordering easier and scanning receipts to earn rewards.
In addition to the launch of our new app, the Tropical Smoothie Café rewards program transitioned from a dollar-based program to a point-based program. While guests have a new way to earn rewards, the core of the program remains the same — for every dollar spent, guests earn one point. When a guest earns 55 points, they receive a $5 reward.
Q: In regards to self-service abilities, what information/analytics are you seeing in regards to increased self-service?
A:The app provides more accessibility to our guests with increased self-service abilities including placing orders through the app for delivery, curbside and in-cafe pickup and scanning their app or receipt to redeem and earn rewards. The app has also helped streamline the ordering process for our cafes. In the first month with the new app, we migrated approximately 50% of our active loyalty base and added more than 170,000 new members. With these captive users, we can now target our marketing strategies based on their frequency and preferences.
Q: How does the new app allow the brand to provide more convenience to the guests?
A: This app is designed to meet guests where they are and provide a seamless ordering experience. Guests can now order ahead for delivery, curbside or in-cafe pickup, and pay within the app. They can also store their recent and favorite orders to make ordering quick and easy. Additionally, guests now have a full view of their transaction history at their fingertips to keep track of earned and redeemed points as well as any current offers or promotions.
Q: Why is scanning receipts an important feature?
A: Scanning receipts makes it easy for guests to collect and retain their loyalty rewards and points at any time whether it’s during or after the visit. Instead of manually keeping track of past orders or adding up their points, the Tropical Smoothie Café app does it all for them.
Q: How has the pandemic affected the business?
A: Many franchise concepts had to pivot their business strategy in order to align with the shift in consumer behavior. The pandemic accelerated our digital roadmap and launched several systemwide initiatives including branded delivery, curbside and full adoption of third-party marketplaces.
Tropical Smoothie Café kept its company culture, franchisees, and guests top-of-mind throughout this shift, and we were able to quickly adapt. We utilized our franchise development team to provide the best support and information for franchisees and accelerated our technological advances to meet consumer demands and ensure our guests had an outstanding experience with the brand during this time. With the shifting consumer preferences to digital channels combined with the new channels we’ve opened, our digital sales continue to experience meaningful growth.
Q: What priorities have you had to change or add to best support franchisees, consumers and team members?
The brand went above and beyond to commit to its franchisees, team members and guests by implementing systemwide initiatives. In order to provide the best possible support, we used our franchise development team to help guide franchisees through the Paycheck Protection Program funding process, and our real estate team shifted priorities to assist franchisees as they negotiated rent deferrals and abatements.
As a result, Tropical Smoothie Café franchisees secured more than $29 million in PPP funds for small business owners across the system and achieved $1.8 million in rent relief for approximately 250 cafes. Additionally, we implemented hyper-local marketing initiatives, enhanced order modes to include curbside and delivery options, and offered a 50% royalty relief reduction for eight weeks to further support franchisees.
Q: How has Tropical Smoothie pivoted their strategies in order to keep up with the shift in consumer demand while also adhering to health and sanitation guidelines?
A: When COVID-19 hit the restaurant industry earlier this year, we knew we had to shift our focus. We closed all dining rooms and transitioned to carryout, curbside pickup and delivery where available, and our drive-thru locations began to operate at a higher volume. We designed and implemented new sanitation and cleaning protocols in less than five days, and our crew members all wear masks while working.
Q: In terms of payments, how and what have you done to ensure your customers have a safe experience paying for their product (contactless, click and go?)
A: The safety of our guests and crew members is our priority. We made a huge push at the beginning of the pandemic to enable third-party delivery in all cafes, and we also implemented TSC Branded Delivery, powered by DoorDash, systemwide. Both options offered contactless delivery. Additionally, our app allows guests to order ahead and pay using stored card information. For guests who prefer their order to be delivered to their vehicle, we offer curbside.
Q: In what positive ways do you think your business model has changed/transformed and why?
A: We’ve pivoted our strategy to meet our guests “anywhere, anytime” through digital channels. Throughout this pandemic, our digital sales have accounted for 35% of our total sales, and our best performing digital cafes have seen 65% or more in digital sales. We continue to see a lift in digital ordering and higher checks due to shifts in consumer preferences. These numbers show an immense increase for this to-go consumer demand, and it’ll continue to play a big role after the pandemic.
Q: What do you believe has been the key to the success of your brand?
A: Our franchisees have really been incredible and steadfast through the pandemic. Their ability to adapt to the constant changes brought on by the pandemic coupled with shifts coupled with their quick response to our strategic shift to digital sales are what helped our brand not only stay afloat but succeed this year. Our franchisees are supported by a phenomenal team at the support center. This team’s relentless focus on our franchisee success and guest experience have been paramount in driving the business forward in a fast-paced, agile environment.
Q: What is the current growth of your company in terms of franchisees?
A: We have seen strong growth year-to-date including the signing of 197 franchise agreements, with 143 of those signed since March 1, of which 67% are with existing franchisees. In addition, to date, the company also opened 82 new locations in 2020 with 73 cafes opening since March 1. Franchise agreements and cafe openings targeted growth in 25 states, propelling franchise development efforts in target markets across the country. Tropical Smoothie Cafe has more than 880 locations nationwide and is rapidly growing across the country.
Q: Can you explain how you came up with curbside pickup and third-party partnerships?
A: Our team launched curbside pickup in 10 days from when businesses started to close dining rooms, which includes the development of the mobile and web experience and the execution across all of our locations.
While many locations participated in third-party delivery at a local level, we rolled out third-party delivery systemwide to accommodate the consumer demand across four of the largest providers: Uber Eats, DoorDash, Postmates and Grubhub. Making Tropical Smoothie Café available on these platforms has resulted in an increase in third party sales overall. Through our presence across these platforms, we’ve been introduced to new guests. Additionally, due to the steady growth in demand for delivery, we launched Tropical Smoothie Café branded delivery, powered by DoorDash, to accommodate those loyal guests who frequently order via our mobile app or dot com site.
Q: What type of communication tools/vehicles did you have to create to speak to guests? Staff? Franchisees?
A: We have maintained an open line of communication with our franchisees during this time. As we shifted our focus to digital, we held our standard monthly webinars as well as one-offs to discuss our new initiatives like delivery and the new app launch. It’s important to us that franchisees are well informed so they can relay that information to their crew members. Of course, we also created the appropriate training materials for our crew members, and we were excited to launch our new learning management system alongside the TSC mobile app in September.
Our marketing team does an incredible job keeping our guests up to speed on our latest offers and news. Prior to launching our new app, we sent awareness emails to our loyalty base so they could download the new app and migrate their accounts.
Q: What is the guest contact center and how does it help your customer base?
A: The main priority of the Tropical Smoothie Café guest contact center is to make a guest’s experience a seamless one. The guest contact center is there to answer any questions guests may have with the loyalty program, franchising, nutrition facts, catering, the mobile app and online orders and more. Essentially, the platform is there to help guests with any issues, and overall enhance each guest’s experience with Tropical Smoothie Café. Data is a big part of our culture and we use the insights we received from the guest contacts to better the experience, technology and products.
Q: Where do you think the future of fast food is going, given the current issues facing this industry? Why?
A:Mobile apps and contactless experiences will most definitely remain a key element during and after the pandemic. Businesses were already developing ideas to elevate digital sales pre-pandemic. The pandemic accelerated many of these initiatives, forcing businesses to prioritize it. Restaurants have adapted their models to provide a seamless and risk-reduced experience for their staff and guests with touchless menus, touchless payments, pre-order pick up and more. The key is making these touchless interaction points integrated so it doesn’t feel clunky and doesn’t take away from the hospitality or experience.
Q: What new efforts in mobile payments are you instituting to provide customers new ways to pay for their orders?
A:Tropical Smoothie Café is looking into several new opportunities and has developed a robust roadmap to help enhance the brand and meet the demand of consumers. A high, short-term priority for us is the implementation of touchless payment that is compatible with Google Pay and Apple Pay.
Q: Michael, since you began with the brand a year ago, what efforts are you most proud of, and what has challenged you?
I am positive no one could have anticipated a pandemic to occur their first year in any new position. However, the pandemic has been the most challenging time of my career, but also produced my most proud moments.
As a brand, we quickly pivoted our strategies initially set for 2020 to adapt to our consumer needs for safe and convenient ordering modes while keeping our franchisees’ profitability top-of-mind. As I’ve mentioned, the speed to which we either rolled out completely new technology or enhanced current technology is something to celebrate. We are now operating with an entirely new digital-first ordering mentality and it has paid off for our franchisees and guests.