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Are digital storefronts bridging the physical/digital gap?

Published January 14, 2021

2020 was the year of, well, many things for many people. For brick-and-mortar businesses and their customers, the pandemic year marked the start of intense digital acceleration. The migration to e-commerce in the United States alone went from 17 percent to 33 percent in just two months. (It was previously estimated to reach 24 percent by 2024.)

As safety continues to be a top priority for brick-and-mortar merchants (and their customers), digital storefronts are not only an effective post-pandemic strategy but also a larger way to bridge the physical/digital gap overall.

COVID-19 changed consumer behavior for the long term

In short: Digital storefronts meet modern consumer demand.

The pandemic forced most merchants to quickly pivot to a digital-forward business model. But studies show the model isn’t going anywhere, even after the crisis slows—and the data doesn’t lie. According to McKinsey, “79 percent of consumers intend to continue or increase their usage of self-checkout in retail after COVID-19.”

Meanwhile, 75 percent of consumers in the U.S. have tried curbside pickup or have started using delivery apps since the pandemic began, and 73 percent intend to continue after COVID-19 slows. 

Almost every sector has been hit with the need to pivot to digital, from banking and gyms to pharmacies and grocery stores. The digital trend extends beyond e-commerce and is vital to economic recovery.

The evolution from website to full-scale experience

Over the years, digital storefronts have evolved from something as simple as having an online presence, like a website or an online store, to a full-scale physical, frictionless experience.

The hospitality sector has been one of the hardest hit during the pandemic, so it’s no wonder restaurants have been among the quickest to adopt new digital technologies. From ghost kitchens and mobile ordering apps to digital-order-only locations, restaurants are turning their focus to recovery and growth rather than just survival.

Today’s digital world means the faster, the better—so to get food to consumers faster, chains like Chipotle, Burger King and Taco Bell have pivoted new locations to include digital-first storefronts. 

Chipotle’s Digital Kitchen

In November, Chipotle opened its first Digital Kitchen in Highland Falls, New York, after digital sales skyrocketed throughout 2020. According to Restaurant Business Online, “Digital sales grew 202.5 percent year-over-year in Q3 to $776.4 million,” and about half of the fast-casual chain’s sales are now digital, proving demand for the new model.

Since the new locations don’t have a front service line, orders for pickup or delivery are solely placed online, either through Chipotle’s app or website or through a third-party delivery service. Despite being extremely digital-forward, for the new concept, customer experience is a focus. Unlike ghost kitchens—which specifically exist to fulfill delivery orders and don’t directly interact with consumers—Digital Kitchen locations are open to the public. Even the lobby is equipped with a realistic experience, offering the same sounds, smells and ambiance as a typical Chipotle location.

Burger King’s Restaurant of Tomorrow

Burger King is set to launch its new contactless concept, “Restaurant of Tomorrow,” in 2021. Burger King’s new locations have two main goals: to reduce their footprint—the new locations will be 60 percent smaller than traditional Burger Kings—and to increase patron comfort amid the pandemic and beyond by going completely contactless.

Burger King has a few plans for going digital. Solar-powered canopies will hover over a drive-in area, where guests can park, use the restaurant’s app to place an order, and have that order delivered to their car. The new location will also feature dedicated parking spots for curbside pickup, lockers that hold mobile and delivery orders, a walk-up window and drive-thru lanes specifically for online order pickup. 

Taco Bell’s Go Mobile

Some chains opt for a hybrid model. Taco Bell is set to launch its first digitally emphasized store, Go Mobile, in 2021. The new model will offer tablets for ordering, curbside pickup, double drive-thru lanes and order pickup shelves—all with the intention of emphasizing order-ahead. And for customers that still want to order on the fly, Go Mobile will feature a traditional drive-thru lane.

Similar to other concepts above, Taco Bell’s new Go Mobile locations will feature a much smaller footprint than traditional locations—1,325 square feet compared to 2,500 square feet, respectively. 

Unlike Chipotle, whose consumer base had clear demonstrations of digital intent before the pandemic, Taco Bell’s digital concept is the result of a sudden surge in demand. The chain also swiftly launched a new in-app loyalty program in the midst of the pandemic five years after the first iteration.

Small businesses go digital with third-party assists

Digital storefronts aren’t reserved for million-dollar chains. Options like localized marketplaces and DoorDash Storefront offer SMB-friendly versions of the examples above.

For retail, localized marketplaces, like Cinch Market and Member Marketplaces Inc., offer expanded e-commerce efforts to small businesses. Localized marketplaces also offer a handful of advantages to consumers by offering the “shop small” experience while providing one central checkout and delivery options.

The rise in marketplace success isn’t coincidence. According to Digital Commerce 360, 93 percent of e-commerce consumers have turned to a marketplace to get their shopping done. As a result, 36 percent of retailers “adjusted their marketplace strategy as a result of COVID-19.”

For smaller restaurants, an online presence has been key to survival during the pandemic and, presumably, will be long after. 

Digital storefronts and brick-and-mortar are a perfect match

In-store technology isn’t diminished by digital storefronts; digital storefronts extend the need for modern, reliable, digital-first solutions for brick-and-mortar businesses. Brick-and-mortar isn’t dead, but its digital transformation is upon us.  Discover how Chipotle Europe modernized its mobile experience by integrating a new customizable solution that met the needs of younger demographics, driving customer growth and loyalty.

An NCR VOYIX survey revealed that 62 percent of consumers were more likely to use self-service technologies, like scanners and mobile apps, while interacting with a merchant in-person. And 86 percent of those surveyed globally by PwC  said they were “likely to continue to shop online/by phone when social distancing measures are removed.” Brick-and-mortar businesses can use this transformational time to do just that: transform their digital-first offerings to better serve their customer.

Brick-and-mortar businesses can start their digital transformation by thinking about the ideal experience they want to offer to their customer(s), then walking back into the technology from there. To increase contactless offerings, would outsourcing or in-housing delivery work best? To take a frictionless experience to the next level, would investing in a mobile POS make sense? Some quick reaction and adaptation is necessary, but merchants can use this opportunity to shift their perspective from mere optimization to full transformation.

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