In 2015, Olo founder, Noah Glass, posted an article about employing Moneyball tactics in restaurant site selection. Seven years later he recently recalled that post, attributing that thinking to the rise of Olo. His article features a quote that’s quite profoundly accurate in its prediction of today’s reality: “As more customers order off-premise and eat off-premise, restaurant brands may gain an advantage over the competition by deploying digital ordering and squeezing the same revenue per square foot out of in-line locations with a far lower rent per square foot than end-cap locations.
That’s ‘Moneyball’ real estate.”
Moneyball’s core premise is that “there may be smart ways of identifying undervalued assets and realizing outsized gains from their utilization.” As he predicted, many concepts are finding rejuvenated value in the spaces that were once seen as the bottom tier. Concurrently, brands with more momentum and capital are shifting gears in the other direction.
Many well-known brands are seeking out stand-alone opportunities and introducing drive-thrus despite the Fast Casual format’s historic shunning of this acquisition method. Brands like Shake Shack and Panera have launched prototypes that feature fully digital experiences that are streamlined and optimized for efficiency.
As virtual brands scoop up the in-line and industrial sites, and the bigger guys seek out concrete slabs at all costs, there will be a middle ground ripe for the taking by enterprising concepts and their leaders. Maybe it is a reclamation of the beloved endcap, or maybe it’s something else.
As consumers warm back up to gathering in public spaces and at restaurants, their expectations are notable shifted. Yes, off-prem sales are at historic highs, but some could argue that the industry’s aggressive shift to pivot in that direction is an overcorrection. And when everyone zigs, there are opportunities to zag. New concepts, and aging brands, must do just that.
Leaders must seek out opportunities in the undervalued assets that are available. The great news is that unlike seven years ago, access to rich data is within reach. With data comes knowledge and a reduction of risk in decisionmaking. Leaders can now search for markets, neighborhoods, and actual potential restaurant sites with increasingly detailed data. The result is making the Moneyball tactical approach to restaurant site selection and marketing planning much easier to employ.