Leadership Strategy Interviews

An Interview with Hayley Dawson-Owens, Ph.D. of Wingstop

Hayley Dawson-Owens, Ph.D. is a Director of Consumer Insights & Innovation Strategy at Wingstop.

Transcript

Gretchen: Hi. I’m Gretchen Riskind and I’m a Qualitative Researcher at Decision Analyst, which is a full-service market research agency that is based in Arlington, Texas, and I am so excited to be here today with Hayley Dawson-Owens, Ph.D., and Director of Consumer Insights and Innovation Strategy at Wingstop Restaurants, which is based in Dallas, Texas. So, Hayley, it is so great to see you today. How are you doing?

Hayley: I’m great, I’m so happy to be here with you too Gretchen.

Gretchen: Great. So, before we jump in, tell me a little bit about your family. How is everyone doing now with summer in full gear?

Hayley: Yes, we are definitely in full summer mode at our house. So, my husband and I both continue to work from home during the pandemic and our two sons are humming around in the background. Trying to keep them busy and trying not to, you know, be on video games and screen time too much during the day. But I’d love to see the revitalization of bike riding around the neighborhood, and also trying to keep their bookshelves stocked and the Lego sets coming.

Gretchen: Well, that sounds amazing, as a mom of two boys, I can completely relate to what you’re, you know, what you’re going through and doing right now. So, let’s talk restaurants, as you well know, restaurants have been one of the hardest-hit industries during the COVID-19 pandemic. We had these widespread closings that were almost immediate with little to no notice. So, you know, while I think it would have been almost impossible to prepare for such an event like this, I’m wondering what trends have you seen among restaurants that were able to navigate through COVID-19 more successfully from the start?

Hayley: So, it’s true, Gretchen, restaurants were hit particularly hard during the pandemic, and you’re right, it was almost immediate. It was overnight, lights out, and life was different. So, it was really interesting to see how different brands have done during this time. I could tell you, in general, the brands that have fared fairly well during the pandemic, have been the fast-food, quick-service restaurants. The pizza chains have also done really well. The restaurants that have struggled more than others are, you know, casualdining, fine-dining, buffets, places like that.

Gretchen: Okay. Yeah, that makes a lot of sense and I’m wondering, can you share a bit more about what the restaurants that have fared particularly well, maybe, have in common?

Hayley: Yes, so a few things that they have in common. I think, first and foremost, what’s been interesting is that, the restaurants that were doing well before COVID have just, their momentum has continued to increase almost exponentially during COVID. And we’ve seen that both from a brand perspective but also consumer behaviors, stuff that was starting to trend upwards before the pandemic has really started to take hold. But outside of that, there are several things that brands who’ve done well have in common: 1 is delivery; 2 is an easy pickup, easy to pick up your food; 3 is it’s easy to feed a group; and then 4 is they tended to do a heavier dinner business. So, I can dive in just a little bit on each of those.

Gretchen: That would be great. Yes.

Hayley: So, one just being well-established in the delivery space. So, you know, at Wingstop, we developed a partnership with DoorDash well before the pandemic hit, and it has set us up very nicely to continue to grow the delivery business during this time. And it’s also a reason why the pizza brands have done fairly well, so when you think, you know, “I’m sheltering in place,” or “I don’t want to leave the house. What food can I get delivered?” Pizza is top of mind. And, we’ve also seen exponential growth with apps like DoorDash and GrubHub, those third-party delivery services. So deliveries, one. Another one is easy pickup solutions, so think curbside, think drive-through.

So, what’s been really interesting―as I’ve seen a couple of case studies on the role of cars during this period and how they give us a way to leave the house and a change of scenery and to see something new―but when we’re venturing out, we don’t necessarily feel safe leaving our cars. So anything that we can do to get the goods and services that we want, that we can just drive up and not even leave the safety of our car, have done really well during this time.

And then, you know, brands that have offerings that feed the whole family have also done really well. So, you know, let’s face it, every meal these days is a family meal and, in fact, we saw some brands that were creating family packs with existing menu items to answer this need. Wingstop has been really well prepared in this space, too, because not only do we have individual combos for individual meals, but also a group packs to help feed the group. And you can customize your flavors, the type of chicken that you want, whether it’s bone-in wings, boneless wings, chicken tenders, it’s all customizable, and you can, you know, customize in a way that everyone in the group is happy and you can feed a variety of different wants and needs within the same combo meal.

Gretchen: That’s great with kids, right?

Hayley: Yep. And then lastly, restaurant brands that have done well during this time tend to have a heavier dinner business. So, when you stop and think about it, when all of the COVID restrictions, and shelter in place, and shut-downs started to happen, you know, one of the things that was very quick to end was commuting, work commutes. And, so, if you think about ,you know, stopping for coffee or breakfast on your way to the office or leaving, you know, leaving work during the lunch hour to grab a bite to eat, all of that breakfast and lunch business really slowed for many brands. So, brands that were really dependent on those dayparts have suffered more than others, and dinner has really been the stronghold.

Gretchen: Yeah, that makes, that those are the some really great insights, that do ring true. I’m also wondering how do you feel that your industry has adapted or is continuing to adapt to these changes?

Hayley: So, I mean, it’s actually amazing if you take a step back and look at it, how quickly we’ve all adapted. I mean, right away you saw restaurants making several quick pivots to save their businesses, and it was impressive. So, some of the adaptations that we’ve seen, well, you know, first and foremost, ramping up delivery services, if you didn’t already have that network in place, that was step number one. Second, leaning into those order-ahead capabilities, whether it’s by phone, or hopefully, more digital, so that it relieves the strain on your staff. But really, online ordering, digital ordering, to reduce that personal interaction when people visit the restaurant. You know, at Wingstop, we were fortunate that both our digital ordering and our delivery platforms were already well integrated into our business. Our guests were already used to using us in that way, so it was real easy for us to shift our model to be 100% takeout and delivery. And, so there are a few other things that the industry did to adapt, some really creative, some creative pivots.

One is, you know, offering to-go alcoholic beverages. So, you know, alcoholic beverages, especially for casual dining, makes up a high percent, or makes up a significant percentage of sales, about 15% of sales mix, and the profit margin on those alcoholic beverages is a lot more than what you make on food. So, as they were starting to move their business from dine-in to carry-out and delivery, you know, they didn’t want to give up those sales, those alcohol sales. So it did not take some brands long to figure out how to offer that margarita-to-go.

And then, we also saw a lot more family-meal options, and it’s not like brands were reinventing the wheel and coming up with new meal solutions that they’d never had before, I mean, meal items that they’d never had before. They were taking what was on their current and packaging it for a quick-andeasy family meal. That was a quick decision. So, you saw some burger places just putting together four burgers or four chicken sandwiches, with fries and a gallon beverage, call it a family meal. But it’s it, you know, it took any complexity out of the meal solution, it made the family-meal occasion easy to say, “Okay, burgers,” “Yes, burgers,” and it’s already all put together for me,” and it’s, you know, one click instead of several. And even you know my favorite Mexican place down the road, they started doing a family fajita pack where it was, you know, just a fajita platter and then of course that pitcher of margaritas-to-go, I mean so tempting, right?

And then a couple other things that we saw with quick innovation pivots that happen in industry, one was the move for some restaurants to sell groceries, or do-it-yourself kits. And, you know, I think this started as supplychain sell-offs. So, when restaurants were left literally overnight holding lots of fresh food, they needed a way to quickly mitigate their losses, and so they started packaging, you know, the meals that you love at our restaurant, you can make them at home. And we’ve packaged it all up for you, for you to just come pick it up, and then go home to bake or make. You know, for example, there’s a bagel place in my part of town that started offering a bagel pizza kit and also bagel sandwich boxes to try to, you know, move some of their product.

There is even, outside of restaurants, even commercial bakeries; there’s one in south Dallas, when all their commercial business dried up, they were left with all this flour and baking goods, and, in the meantime, grocery stores were running out. And so, they opened their doors to the public to sell off some of that extra supply that they had. So, it’s interesting to see this trend start, but it has continued, and it’s turned into a revenue stream for some brands. And then, one other great adaptation that we’ve seen happening is streamlined menus. So, you know, this is probably due to supply-chain limitations, as factories and routes were interrupted, but also it simplifies operations in the kitchen, and so when you’re trying to run on a leaner staff with fewer people in place, then it’s easier to do so with a streamlined menu.

Gretchen: Yeah, and it’s really impressive to hear about all these shifts that have taking [taken place] in such a short amount of time, and I’ll also say that my family and I have taken advantage of several of these solutions that you have mentioned. So, what I would love to know, is which of these trends do you think are here to stay?

Hayley: That’s a good question. And you know what? I think it’s all about what motivates the consumer. So what is making things convenient and easy? You know, I think it’s the delivery, the boost in delivery that we’ve seen, the boost in contactless pickup, or contactless ordering and payment, all of those things I think will last into the future because it just, it makes life easier, pandemic or no, it makes for an easier restaurant solution. And I also have to say I don’t think anyone is going to want to give up those margaritas-to-go, so I wouldn’t be surprised if that to-go alcohol has staying power as well.

I saw a statistic the other day that said that we’ve experienced five to ten years of e-commerce adoption in the last 90 days. And I mean, when you stop and think about that five to ten years of consumer adoption of technology within the past 90 days, that’s pretty incredible. But when you stop and think about it, like, think about your elderly aunt, who is ordering grocery delivery for the first time ever. I mean, when else would she have ever considered experimenting with that type of the service? My next-door neighbor had told me a couple weeks into the pandemic that she finally broke down and downloaded DoorDash, like she was holding out, but that was the one way that she could get her favorite restaurant meal when we were all in shelter in place, and she didn’t feel comfortable going to the restaurant. And this high rate of adoption wouldn’t have happened if not for the virus.

Gretchen: Yeah, absolutely, and I think that you really make a great point about consumers adopting as well as the restaurant industry. So, to that point, I’m wondering, you know, what impact has technology had in helping handle these new shifts for food service in general and maybe in your business as well?

Hayley: Well, I will say technology has definitely been the savior of our industry, it’s been the reason that Wingstop has performed so strongly throughout this pandemic. So, I’ve already talked a lot about digital ordering, delivery, contactless pickup, digital payment is another big one for restaurants. It allows a contactless payment process and keeps the interaction as safe as possible. So, some companies have even moved to 100% digital payment, requiring it of their guests. So, I think moving forward, this focus on restaurant technology is just going to intensify and whatever can be done to make things even more easy, more frictionless over time, will be what happens.

Gretchen: We’re about, what, three months into this COVID-19 and you mentioned that, earlier that your neighbor decided to break down and try DoorDash, and I’m wondering, what are some other ways that you’ve seen consumer perceptions and usage of restaurants change and evolve during this time?

Hayley: It’s been fascinating to watch the consumer progression throughout the last three months and we’ve talked a lot about how quickly brands and companies have adopted, And adapted, I mean, consumers have as well. So, you know, when I take a step back and kind of look [at] what all has happened so far? There’s many phases that the consumers have gone through. So, first, it was all about safety, safety first.

So, when COVID hit the U.S. in mid-March, it was, the reaction was immediate, people stopped going to restaurants overnight, and they instead, you know, stocked up on food to cook at home, and it was pantry overload for most of us, right? And there was a fear and a hesitancy around restaurants. Should I trust someone else to cook my food? Should I trust someone else to package my food? What about delivery drivers? Is it safe for them to be driving around in their cars with my food? How sanitary is a restaurant? People wanted to make sure that if they were ordering from a restaurant, that it was going to be a safe experience, and that, you know, everyone involved would be healthy. And we saw for the first time that cleanliness was actually the number-one reason to choose a restaurant, beating out taste of food for the first time ever.

Gretchen: Huh, that’s really interesting.

Hayley: Yes, [it] didn’t take long for brands to figure out this is an important topic for people and we need to make sure that we’re messaging and communicating with our guests that our restaurant is a safe space, both for our employees and our guests. So, once we move past the safety phase, and then it was “Alright, I feel comfortable coming to your restaurant, but now you need to make it as easy as possible for me.” With, keeping in mind, that I want minimal contact, minimal time in the restaurant, minimal contact time with your staff. So, you know, really it was the fewer touch points the better, and the easier, and more intuitive the technology, the better. So, like I said, this is where all the technology starts to come in and there was a real lean on companies having the easiest, most efficient process possible. So, after we feel good about safety, after where we feel good about the convenience of the interaction, then we started to sit back and consumers realized, you know, the emotional connection that they have to restaurants. And at the beginning of that was just a positive restaurant sentiment coming up, especially in areas that were hardest hit, like New York and California; “We’re in this together” mentality, and [a “you] take care of me and I’ll take care of you” connection. And this is where the “Support Local Movement” came in, and also the “Great American Takeout on Tuesday Evenings.” And we saw that comfort foods were really dominating restaurant decisions. So, if I’m creating it, or it’s from my favorite place, or it makes me, it’s, I’m nostalgic for it, it makes me feel like a little bit of normal, then I’m gonna support you, and I love that you’re supporting me as well.

Gretchen: That’s great, that is great.

Hayley: And then, we moved into this, you know, kind of continue that emotional journey, and realized what a social place that restaurants are for us, and how important that is to our daily lifestyles, not only the social piece, but also just the feeling of a reward and an escape, and a treat to be able to go out outside of the home and relax with others. And plus, I mean, Gretchen, I don’t know about you, but I was so tired of doing cooking and dishes three times a day at home. I mean, how many times is your sink been full of dirty dishes?

Gretchen: It is probably full right now. So, yes, absolutely.

Hayley: So in mid-April, I think a lot of things were happening all at the same time to get people more out and about. First, jurisdictions were starting to open up, or they were starting to think about, even just thinking about lifting of restrictions. And people started to see the light at the end of the tunnel. The Easter holiday weekend, you know, a lot of people who had been sheltering in place, not really seeing friends or family, they were ready to get out and celebrate the holiday. We also had stimulus checks arriving at the same time, boosting our discretionary income. And the warmer weather as well, I mean, spring fever really hit. And it all happened around mid-April, which is when we started to see restaurant traffic really start to rebound. So finally, that’s where we are, at the rebound phase, and you know, it’s going to be a gradual process. We are mentally ready to get back to restaurants, but still a bit hesitant. Some cities are opening restaurants at you know, 25% capacity, or 50% capacity.

Some people are comfortable venturing out, and going to restaurants now, there’s a whole lot of others that are just kind of hanging back and waiting to see what happens before they venture out and go back to restaurants. And so, that’s really what we’re seeing. It’s, you know, when this first started, it was an overnight lights out, and there was a significant behavior change. As we’re starting to come back, it’s not going to be that overnight lights on and everything’s back to normal. It is going to be a very slow, and gradual return.

Gretchen: You know, with that said, I’m wondering, you know, what ideas can you share that would help maybe consumer insights, or strategy, or business planning leaders take the next step in leading their organizations and departments through COVID-19, to be prepared for these next phases?

Hayley: Yes, so I would say that, you know, there is a wealth of free information out there right now, and I strongly encourage everyone to take advantage of it. Not, not just to educate yourself, but to share it out with others as well. So, several research companies, including Decision Analyst, have consumer sentiment trackers in place right now, and they’re doing regular webinars or regular reporting to share out the results. Several companies have COVID-19 insights hubs on their websites, where you can go for updated information on a weekly or more often basis. So, my advice is to just take advantage of all these free resources. I mean, I can’t tell you another time within my career in insights, where we’ve had [access] to such a wide variety of information. It helps us all understand, like, how are consumers feeling? What are they anticipating? What does the future hold?

And, in fact, the things that I’m learning and the themes that I’m seeing are important to the organization as a whole. So, I have started sharing out weekly what I’m seeing in the insights space to the senior leadership team at Wingstop and they are interested in hearing it all. They want to know very broad, high level, in general; How are consumers feeling? What is the economy looking like? But then, also how has restaurant behavior being affected? How is grocery behavior being affected? Even as much as, you know, in the employee-employer relationship during this time, as we plan our office reentry, they’ve been interested to hear about those insights as well.

So, you know, my advice is to take advantage of all of these information resources, and if you are at one of the companies that has these information resources available, do not be shy about sending them out on a regular basis. So, I could tell you, I have several newsletters and weekly digests that hit my inbox on a weekly basis, both from companies that I’ve worked with in the past but also companies I’ve never worked with. And, even though I don’t respond to all of those emails, I am reading and gaining knowledge from each, and every one of those. You know, insights is all about actionable informationsharing. So, when you have information to share, don’t be shy about sending it and when you have free information at your fingertips, you better be taking advantage of it.

Gretchen: Well, I think that is great advice, and as a researcher, I’m really glad to hear that you have been taking advantage of some of these different studies that have been out there recently. Just to kind of finish up, I’m wondering, you know, what else would you like to share about your industry or organization? You know, and the wildly anticipated post-COVID-19 world?

Hayley: Yes, well, I think, you know, the biggest a ha for me in all of this has been the trends that were already at work pre-COVID have been accelerated during this pandemic; consumer behaviors that were starting to take form have really taken hold; the brands that were already on the rise have grown exponentially. And so, it’s been a time of rapid change and accommodation. But what’s been most exciting is the voice of the consumer and all of this acceleration and accommodation that we’ve seen. So, every step of this journey, [consumers] were there to say, “Restaurants, we want you to be safer,” “Restaurants, we want you to be easier,” And the brands are listening. So, it’s been fantastic to see the consumer voice at work during this time. And then on a more personal level, I’ve been incredibly proud to be on the Wingstop team, a team that has really magnified our cultural values during this time. So, you know, every day we strive to be authentic and service-minded and entrepreneurial, but also fun. And we live out these values on a daily basis, but they have really become particularly important during this pandemic as we’ve navigated through these past several months. And there’s one more thing that has really gotten me through these times, Gretchen, I don’t know if you’ve ever tried Wingstop fries with our ranch dip, but if you have not indulged yet, I highly recommend it. So good.

Gretchen: Well, I have to tell you I haven’t eaten yet and that has made me even more hungry. So thank you for that last tip. Hayley, I just want to say thank you so much. We so much appreciate you taking some time to talk with us today, and I hope you have a wonderful rest of your day.

Hayley: Thank you.

Gretchen: Take care