October 1, 2015

How Panera Bread Rocks Local Marketing

Screen Shot 2015-10-01 at 11.09.46 AM

Image Credit: Panera

How does a restaurant chain with 1,800 locations succeed with local marketing while maximizing the value of its national brand? Panera Bread provides one compelling example. The chain makes its mark through local marketing by combining community outreach with the efficiencies of digital at the national level.

Founded in 1987, Panera Bread has become a national favorite for its high-quality bread, soups, sandwiches, and bakery specialties served, along with free WiFi, in a casual environment. Panera Bread restaurants also provide a sense of comfort and charm for reasonable prices, beyond what you normally find off an expressway or in a strip mall. An effective local marketing approach is an important part of the $1.8 billion brand’s appeal. Its key components include:

Community Outreach

The cornerstone of Panera’s local presence is its strong community outreach program to ensure that each location builds goodwill through giving.

For example, through its Community Breadbox, Panera bakeries take donations from customers to support local nonprofit organizations. Through Fundraising Night, Panera Bread restaurants work with local nonprofits to promote their causes and raise money by using local Panera franchises to raise awareness (which generates foot traffic for Panera and revenue for a participating nonprofit). And since 2010, Panera has operated select Panera Cares outlets, where customers pay only what they can afford to pay (they can volunteer their time, too), thus creating a haven for the needy in cities such as Boston and Chicago. Other programs include:

  • End-Day Dough-Nation through which Panera Bread bakeries donate unsold bread and baked goods to charities and hunger relief agencies. According to the Panera Bread website, Panera stores donated $100 million worth of unsold food in 2012.
  • An internship program, piloted in Missouri, that gives at-risk youth job training through Panera Bread locations.

Giving to the community means supporting individuals in addition to institutions. For example, Panera Bread turns its restaurants into classrooms by offering teaching tips for children aged 5-12. Instruction includes the art of baking French baguettes (“one to bring home and one to donate to people in need in your community“).

Giving back to communities does not occur by accident. The local programs reflect Panera’s national commitment to solving hunger — a mission that has expanded to supporting many other charities and causes. By delivering on a national mission, local Panera bakeries become more integrated into their communities and seem less like faceless chains.

Creating a Home

Panera also makes its locations destinations, not just places to grab something to eat and drink. Certainly, chains ranging from McDonalds to Starbucks make their stores more appealing by offering amenities such as free WiFi. Panera Bread goes a step further by actively encouraging its customers to make Panera restaurants part of their daily routines. Many Panera Bread bakeries provide Community Rooms, which residents can book for meetings by calling the restaurant or booking online. If your weekly coffee klatch needs a place to hang out regularly, you can take the guesswork out of the process by reserving a place and time (which probably means more revenue for Panera).

Panera taps into its national infrastructure to help its customers learn how they can make Panera their home away from home. On its national blog, Panera profiles some interesting ways customers have enriched their local Panera stores, such as:

Here again, Panera creates an interplay between its national brand and local presence. The Panera bakeries make themselves destinations for patrons. The Panera blog shares examples from the front lines in order to maximize the value of the local activity for the benefit of the national Panera brand. The message is clear: we not only welcome you to spend time with our stores, we celebrate your spending time with our stores.

Being Useful

Panera relies on the power of its national brand and infrastructure to make sure that each locations ingratiates itself by being useful. Case in point: in 2014, Panera launched a mobile app through which customers may do everything from place food orders to pay for their purchases.

What makes the app special is its pre-order functionality. Using the Panera Bread app, you can use your smartphone to place an order for a meal before you arrive at the nearest location and either pick it up to go or eat it in-store. Or you can use the app to place a meal order from your table if you want to wait until you have arrived and secured a table before you think about food. If you prefer to place an order with a person, you can use the app to pay for your purchase just like you do at Starbucks, so long as your phone is enabled with Apple Pay.

As it turns out, Panera is a trendsetter: Starbucks recently launched its own Mobile Order and Pay functionality nationwide, available in 7,400 stores. But you don’t need a smartphone to use mobile technology at Panera. The company has also incorporated iPads in its locations, through which customers may place orders inside locations and either dine at their tables or take their food with them.

Going mobile is part of a $42 million investment, “Panera 2.0,” which is designed to make Panera dining an easier experience. As The Wall Street Journal reported in 2014,

The technology upgrade is geared at disrupting Panera’s current customer experience which typically involves ordering food at one station, picking up beverages at another and waiting in the “mosh pit” — the grim nickname Panera has for the area where customers pick up their food. “All of the friction that we introduce . . . is atrocious,” said Blaine Hurst, Panera’s executive vice president of technology.

Making it easier for customers to place to-go orders is important, too: in 2014, Panera reported that 45 percent of its orders are to go.

By making it possible to use mobile to place orders from tables or to go, Panera enjoys the best of both worlds: satisfying diners who want to hang out at Panera and those who simply want to get their food and leave quickly.


Being Findable

Panera’s local marketing efforts don’t matter a whole lot if customers struggle to find Panera when they are searching for something to eat, especially when they use their mobile devices. According to a SIM Partners audit, Panera could stand to improve its local search visibility.

On the one hand, Panera enjoys good, if imperfect, visibility for branded search. When customers search for a “Panera bread near me,” they can generally find one fairly easily. (But in St. Louis, where Panera Bread was founded as Saint Louis Bread Company, the company name appears with inconsistent naming conventions.)

When people do non-branded searches (e.g., “fresh bread Chicago”), Panera does not appear in Google Snack Pack results — a missed opportunity to be present when people are looking for options in Panera’s category and have not specified Panera by name.

Panera also lacks local store pages, which could boost visibility and drive local traffic. Panera has claimed Google My Business pages but needs to optimize them with more descriptive content and more appealing visual imagery.

Panera is getting many things right with local marketing. But the enterprise has some work to do in order to make search a stronger element of its local marketing. As Google reported in 2015, “near me searches” have increased 34 times since 2011, especially on mobile devices. The opportunity for Panera to capitalize on local searches is huge.

Panera Succeeds

Panera is rocking local marketing. Its use of technology to improve the local experience earned Panera a place on the Fast Company Most Innovative Companies 2015 list. Making the local experience more useful through technology has come with a price tag: according to CEO Ron Shaich (in a July 28, 2015, press release discussing fiscal performance), the cost of launching Panera 2.0 has dampened near-term profit growth. But Shaich says that Panera 2.0 has made a positive difference, too, by helping the company increase sales every month in the second quarter of 2015. He says the mobile/local push is working. Panera also has room to improve its local marketing via search, as the SIM Partners audit shows. But overall, Panera has found the right formula to differentiate itself through local marketing.


Leave a Response