Phil Weick is Senior Real Estate Strategy Manager at Panera Bread. We had the chance to ask Phil about Panera's rapid expansion, and pick his brain on what's coming up in the retail industry.
Tell us about yourself and your role as Senior Manager in Real Estate Strategy.
I’ve been with the Real Estate Strategy team since it was created 8 years ago. Our team really is the analytical side of the real estate department. We provide the framework for where and how many sites our real estate managers should be pursuing. That means we do everything from market planning, to sales forecasting for individual sites, and also determining cannibalization on sister cafes. We also look into factors like competitive mapping.
You’ve been there for 8 years and since the beginning of the department. Tell us about what kind of growth you’ve seen for Panera.
We’ve seen phenomenal growth. To put it in perspective, when I started with the company we had 400 cafes. That was 10 years ago. We’re now above 1800, and will be closer to 2000 by the end of the year. Even from a corporate HQ standpoint, in the last 6 years we’ve outgrown 2 different offices just because we’ve grown so quickly. Right now we have 13 units open in Canada with 3 more approved, the remaining locations are all in the USA. Most of our current expansion in the US will take place in the South and the West, as the East and Midwest are more mature markets for the brand.
To determine your retail locations, what kind of strategies do you have in place?
We take a top-down approach, first considering our company’s growth objectives. Then we’ll drill down market by market. At a high level - say we’ve determined that a particular market can sustain 60 cafes. Once we’ve determined that potential, we rank the locations based on incremental sales potential factoring in the number of sales drivers and demographics. From there we do sales forecasting for various sites and determine the impact on sister cafes. Ensuring the least amount of sister impact - or cannibalization - is really important, and we have a dedicated set of tools for doing so.
What innovations do you see emerging in the retail site selection space?
I think the game changer is going to be use of mobile phone data. Right now, we’re using population estimates that are provided by census data that might be 3 years old by the time it rolls out. Whereas mobile phone data can tell you how many people were in an area an hour ago, and gives you a much higher accuracy rate. I definitely think that’s where the market will go, and it will radically change how retailers define trade area populations and demand for a particular market.
What’s next for Panera?
Our major focus is on mobile technology and improving the customer experience. We’re putting a lot of effort toward giving the customer more options and removing any type of friction involved in the order and retrieval process. For example, mobile phone ordering - you can place your order from home, walk in, and have it ready and waiting for you. You’ve already paid via your mobile app, so in less than 30 seconds you’re in and out of the cafe. Or you could place your order from a table in the cafe and have the food brought out to you.
That’s just scratching the surface, but technology is really going to be the big push in the next few years. It’s key for improving customer service and making for a more personalized experience. We have been pioneers of omni-channel retail in the restaurant space and have been recognized as one of the most innovative restaurant companies in the world.
The personalized, mobile experience is a definite industry trend, and those that don’t start using it will be left behind. With Apple pay and every major phone provider offering a mobile pay service, it’s only a matter of time before most of the general public starts to adapt those technologies and the retail world will be forced to look for ways to take advantage of it.
How do you think consumers will respond to the privacy concerns around retail data?
With technologies such as mobile phone data, you walk a fine line between gaining access to a robust new data set and being intrusive. Retailers must be transparent and up-front with customers before using their location data such as with opt-in services. Once a customer feels betrayed, a retailer will likely lose that customer forever.
Which retailers do you see as doing noteworthy activity with location intelligence?
In general, grocery stores and warehouse clubs who have abundant data. If you’re a Costco or a Sam’s, everyone has to get a membership card, so you know where they live. They also have extensive use of credit card data. These data sets are so robust they can not only pinpoint where their customers are coming from with a very high level of precision, but they can also start targeting by food segment and determining things like store layout. For example, they could use customer transaction data and demographics to determine the size of the wine department or to optimize how many brands of olive oil to sell?
