Last year Stellar Loyalty CMO Narina Sippy told Loyalty360 that Panera Bread has demonstrated a superbly executed brand strategy, finely aligned with customer loyalty and customer experience programs. What’s more, she said the brand’s heightened focus on customer loyalty and brand value is why Panera has surged ahead of its competitors.
Panera CEO Ronald Shaich reiterated that strategy during the company’s recent fourth-quarter earnings calls, focusing on four critical objectives.
“Our first objective is to make Panera bakery-cafes a better competitive alternative so that customers choose us over competitors,” he explained. “Our intent is to better compete by intensifying desire and reducing friction at Panera. Initiatives to deliver against this objective include Panera 2.0, which is inclusive of both digital access and operational integrity, and it includes innovation in food, innovation in operations, innovation in marketing and innovation in store design, consistent with our North Star which we call Concept Essence.”
Panera’s second objective is to build expanded runways for growth by pursuing an omnichannel strategy that leverages its brand credibility into new sales channels. To that end, company officials are focused on initiatives that generate growth through traditional and new formats, and in several multimillion dollar adjacent businesses, including catering, delivery, and consumer packaged goods, which is known as Panera at Home.
“Our third objective is to build capabilities to execute our strategy,” Shaich said. “These capabilities include both human capabilities and technological capabilities. And our fourth objective is to execute value-enhancing initiatives to fund our strategic plan. To that end, we’ve undertaken initiatives including an intensive margin improvement effort and returning cash to shareholders. The expected by-product of this multiyear strategic plan, indeed what we are aiming for, is sustained double-digit EPS growth. We believe these themes will shape our industry long into the future.”
Shaich said these themes include using digital to create a frictionless and joyful eat-in, to go, and delivery guest experience, and, thereby, driving frequency; second, to build on our two-decade-long commitment to food that can be trusted by offering 100 percent clean food, genuine transparency, and real options; third, creating the largest and most successful loyalty program in the industry and using that program to drive more relevant 1:1 marketing; fourth, utilizing rapid pickup, catering, delivery, and Panera at Home to offer an omnichannel experience; and fifth, developing new formats that allow Panera to shift its paradigm from attempting to maximize the number of cookie-cutter cafés it can open, to maximizing a number of high ROI sales it can extract from a given ZIP code through diverse format.
What’s more, 24 percent of Panera’s sales are digital, which leads the industry.
“This is the highest digital sales rate we know of in the industry outside of the big three pizza guys,” Shaich said. “Panera’s Rapid Pick-Up program, or what others call mobile order and pay, now represents 9 percent of our sales. In addition, Panera is the first national restaurant chain to pledge and now to make available, that is to offer and deliver against that objective, food that is 100 percent clean of all artificial flavors, all artificial preservatives, all artificial sweeteners, and colors from artificial sources.”
The company’s loyalty program, MyPanera, has an industry-leading 25 million members, representing 51 percent of company transactions, “and this is the largest percentage we know of any loyalty program in our industry,” Shaich added.