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Panera Gets Serious About Tech, Says Its Future Depends On It

The soup and sandwich chain is introducing tech upgrades that include mobile ordering and self-checkout kiosks.
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Panera 2.0 sounds more like a software upgrade than a sandwich chain revamp. In reality, it's a little bit of both.

Panera Bread executives on Tuesday revealed a program of tech upgrades for its restaurants that emphasize mobile ordering and include fast-lane kiosks reminiscent of grocery stores' self-checkout lanes. Panera will reportedly spend about $42 million on technology under Panera 2.0, with tech costing each restaurant approximately $125,000.

"I know that this is key to the future of Panera," said Panera CEO Ron Shaich in the newly released Panera 2.0 training video. "If Panera isn’t able to make the step and really figure out how to use technology to enable a better and different guest experience, Panera won't be the success it has been in the past."

Panera has adopted a mobile ordering app system, with the option of ordering ahead. This "Rapid Pick-Up" option allows customers to pick up their orders directly upon arrival, having paid and selected pick up times on their smartphone or online. Panera has already rolled out the ordering option in 149 locations, and with plans of making it available across the country by the end of this year.

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Simultaneously, the chain is rolling out fast-lane kiosks, where customers can punch in their orders instead of waiting in line to order from an employee. The kiosks will be adopted nationwide over the next three years.

While these changes will decrease wait time for sit-down customers, they seem most focused on bringing in more to-go traffic, who can order lunch for pick up from the computer, their smartphones or when they arrive in the store.

"With long lines eliminated, out to-go customers are easy in, easy out, and out eat-in customers can relax and enjoy," said Rich Childs, a multi-unit franchisee, in the training video.

Other changes under Panera 2.0 include changing up production spaces and procedures, with hopes of increasing accuracy and further cutting down wait time.

"As already reflected in our guidance for fiscal 2014, we anticipate that these investments may depress both margins and earnings growth in fiscal 2014 and 2015," Shaich said in a statement. "However, we believe these initiatives will enable us to better meet our customers’ ever-evolving needs and provide the platform for significant growth and expanded earnings.”

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