“The only ‘normal' is change”: Bakers Delight future-proofs store network through “sizable” investments in e-commerce, loyalty

Joint CEOs Elise Gillespie and David Christie discuss details with QSR Media in an exclusive interview.

Having been considered as an essential service, Bakers Delight was one of the few larger chains in the country able to trade amidst the coronavirus crisis - something its joint CEOs do not take lightly.

“Every day we’re reminded of how lucky we are to be living in Australia and to be in the business that we’re in. We’ve experienced change, disruption and stress, but nowhere near the scale of many other businesses,” joint CEO David Christie told QSR Media.

“We personally have been able to cope well due to the amazing team of franchisees and staff we have,” added Elise Gillispie, also the chain’s joint CEO.

Both of bakery franchise’s bosses share a clear observation of buying behaviour during the pandemic: customers were going back to basics and simpler comfort food. Over the last 3 months, average growth rose about 10%, mostly driven by their sandwich bread range.

“During the peak of the crisis, our snacking business fell away, but our core bread range went through the roof and more than compensated for what we lost,” Christie noted.

“We saw Australians bulk buying flour and bread, which was advantageous for us. We also saw Australians wanting to support their local businesses like butchers, bakers and green
grocers, rather than visiting the major centres. This had a mixed impact for our business. Our strip locations and small neighbourhood centres performed very well, but bakeries in the larger centres were negatively impacted,” Gillespie added, noting that their CBD locations are the only bakeries that remain significantly impacted by the restrictions.

Bakers Delight is no stranger to crises, according to Christie. During the country’s recession during the early 90s, he said the bakery chain “grew exponentially” and expressed a similar sentiment for their Canadian business during the financial crisis in 2007 to 2008.

Their main concern? Assuring safety and preventing any interruptions in their supply chain.

“We ramped up communication with daily emails to our entire network and regular Zoom calls. Through this process we found our network became stronger and our culture improved as we were all pulling in the same direction,” Gillespie noted.

E-commerce platform, refurbishments
Refusing to fall behind, Bakers Delight looks to accelerate its digital channel offerings. A large number of franchisees had already signed up to existing delivery platforms like Uber Eats or offered their own delivery functionality, along with click and collect. The number of bakeries that has signed up for Uber Eats, the chain says, has more than doubled during the pandemic.

“E-commerce and digital loyalty are an important part of our future plans and we will be making a sizable investment in our capabilities over the next 12 months,” Christie revealed.

“The pandemic did accelerate our digital channel offerings and enabled us to move faster than we otherwise would have,” Gillespie added.

“Online sales peaked in early April but have dropped away significantly in the last month as consumers are wanting to leave the house. However, online does represent a larger portion of our sales today than it did in February. We will be launching our digital loyalty programme later this year along with an integrated online ordering platform.”

Anticipating growing importance for health and convenient snacking during this time, Christie says the chain will invest back into its 500-plus store network through its refurbishment programme, whilst ramping up their roll out of ‘grab and go’ solutions.

“Digital will definitely be our largest area of investment in the coming years. However, we are still a bricks and mortar business, with 99% of our sales being generated by people walking into our bakeries, so we need to ensure their experience continues to be a delightful one. Refurbishing bakeries is critical if we are to remain relevant to today’s consumers,” Gillespie explained.

“An integrated digital loyalty program that enables consumers to order online and pick up in bakery is important for our future success, but it will only be successful if the foundation of delivering delight in (a) bakery is achieved day in day out.”

Why customer experience remains relevant
Christie also expects people to continue eating from home more frequently for at least the next six months. For him, businesses who will thrive during the pandemic have these characteristics as those that thrived before: “healthy” balance sheets, strong brands and working culture, adaptable teams and the ability to solve problems.

“Foot traffic is slowly returning to major shopping centres but we expect CBD locations to be a challenge for quite some time. The only real ‘normal’ is change and the pandemic has accelerated change exponentially,” he said.

For Gillespie, more changes should be expected but stressed that great customer experience remains relevant.

“The rate of change has been significant across all industries since March so we can expect more change to come. We believe Australians will want to continue to shop at ‘their local’ as we have enjoyed a greater sense of community during lockdown, that many won’t want to lose,” she said.

“We believe many of the core principles of a great customer experience will remain important; delightful service, delightful product and delightful environment, but for now it will
need to be achieved in a socially distanced way."