Techuisine | Episode 6 | Scott Gladstone

Well, I think it means you have to move with your customers, and they're moving faster than ever. If you think about physically moving, although we're leaving our house a little less often than pre-COVID, they're in their homes more often. Think about mobile devices and how they engage with them. The way customers interact with brands generally has changed, and it impacts almost every step of the value chain within our strategies. One, in terms of awareness, how do we make consumers aware of us from a marketing perspective? We've had to adapt and change our tech stack as it relates to how we reach our guests. If you think about the Dine-in experience, we've had to change various ways we engage with our consumers physically. QR menus were a big thing, although now I read in the New York Times that they're not a thing anymore, which I do agree with personally, but it was good to get that validation a couple of days ago. We've introduced pay and go in both of our brands, which is an opportunity to pay your check from a QR code on the receipt, allowing you to get out of the restaurant so there's no wait period. Yeah, how do you reduce friction at every step of the way? Introducing new guest feedback tools, again driven by the mobile device. And then it's about availability, how can you be available in locations and formats in which your consumers are trending towards. Over the last couple of years, that's been delivery as the big piece, and pickup. I think from the previous part of our conversation, we're slowly coming out of that place where it was just turning it on and making sure you're on. Now it's about taking a look back, what do I have now, how do I optimize all these various systems and processes that were not necessarily built for the business I have today. So we're continuously moving, follow the guest and understand where they want to engage with you. It's really transformative, very disruptive.

Yeah, well, it's a big opportunity and an interesting example. Starting at a higher level, it's an interesting example of new innovation in the space and how quickly things move, and how quickly we as an industry kind of say, 'Oh, that's yesterday's news, not interested, let's go talk about GenAI or something.' So this was the topic of 2021, I think, and maybe parts of 2022, and now it's kind of out of the fold for some reasons that are good and some not. But I think it's the maturity curve of the business. It hasn't necessarily materialized in terms of a proliferation of these virtual brands all being successful, but you are seeing some examples of brands that are quite successful because they're rooted in consumer needs and they understand what guests are looking for and the food is good. So there are brands that are going to win and some that are going to lose. That's the top-level message. We are still very positive on them because we think it solves a real need, especially in IHOP in the PM business, where we've got that capacity and availability. If we can be online and we're 24 hours in a lot of locations, and we can be offering more cuisines than we do today that consumers want, and we have the capability because we're leveraging the physical plant and human capital. We're giving a differentiated offer to a set of consumers that wouldn't consider IHOP otherwise. So we're still very positive on it. A lot of our job is continuously testing and learning, putting in concepts and seeing what they do. Some concepts over time may need to come out, but you'll roll in new ones. It'll become an arm of your marketing campaign calendar over time, except they're not eight-week initiatives; they may be six months or a year or longer, or shorter in some cases. Still learning, but very positive, and don't want to drive past it because it's not on the front cover of NRN every day anymore. It's a huge market in a day part that really is untouched by IHOP.

Yeah, I'd talk a little bit more about the international side of our business, which has been in a lot of ways an innovation hub for the brands for a number of years, mostly innovating around formats. The international market is different in a lot of ways than the US, largely from a store footprint and real estate perspective. In the US, we're used to freestanding drive-throughs and units, but overseas you have some of that but a lot of mall-based locations, inline locations, smaller locations, and you have to think about how to represent your menu in a much smaller space. What we're really excited about right now is our dual brand concept, thinking about what Dine Brands can bring to our franchisees and consumers: that breakfast day part with a very strong proposition from IHOP, and then that PM afternoon dinner proposition with Applebee's and the full bar. We've got three locations open now. If you were to see one, we've got one in Niagara Falls, Canada, one in Dubai, one to open in a couple of weeks in Kuwait, and another in Kuwait. Two separate storefronts to the consumer, Applebee's and IHOP, different dining areas, although you can order off both menus, but a shared kitchen and shared infrastructure. The concept of dual branding is not necessarily new, but we're all evolving in how we think about the guest experience and how a guest engages with both brands. We're excited about this one; it's been represented really well. We're proud of the work so far, and we'll see how far we can take it, but we think it's an interesting opportunity for us.

We'll talk to our franchisee in the market and see what they think.

Well, there is application. We always in the international business say the international consumer is different, but the international consumer is very similar. We all have very similar reasons for why you engage with a brand. So we'll see what kind of success we have overseas and then work through some of the geographic challenges to deploy that in the US. But hopefully one day in McKinney, Texas, you'll find something like that.

Thank you so much. It's a real pleasure. I wish you the best of luck with this new endeavor and all of your existing endeavors. Look forward to continue the work. Appreciate you.