City Group Hospitality advances its digital ordering process with insights from LSU, Cornell in Harvard Business Review study
Baton Rouge is known for its concept restaurants, like the six that sit under the umbrella of City Group Hospitality (CGH). The restaurant group’s online ordering efforts are now being studied by students at Cornell, and Louisiana State University. For Stephen Hightower, Managing Partner of CGH, the past year blossomed a new partnership with Professor Gabe Piccoli at the E. J. Ourso College of Business at LSU. Piccoli is the lead author on his newest published study for the Harvard Business Review titled Fostering Digital Relationships with Guests at City Group Hospitality.
Piccoli met Hightower last year on the local Baton Rouge podcast “Out to Lunch.” The topic of their episode was The Art and Science of Hospitality. After that conversation, the seed was planted for them both to understand what could be next for the industry in relations to technology, digitalization and food delivery.
Third-party food delivery apps used to be considered a competitive advantage for restaurants, but now they’re more a lifeline for continual sales. Paying for the service comes with high commission fees, which can severely erode a restaurants profit margin. Yet, the positive elements—reaching a new customer base, increased check sizes and receiving more orders during downtimes—seem to outweigh the negative in a post-pandemic world, for some operators.
Using the third-party apps does require work to execute the orders successfully. Many restaurateurs worry about the food handling, and time between restaurant pickup and home delivery. No matter the effort on the establishment’s part, the minute the order is carried out the door, the restaurant has lost control of its product, leaving the customer experience unknown. Hightower grapples with the feeling of dependence all too well.
“Food delivery companies promise incremental sales, but they aggregate demand and concentrate power in their own hands,” Hightower said.
The published case study focuses on the digital transformation of restaurants, and how business owners are learning to work with, or without, food delivery apps.
“University-industry partnerships are win-win situations for everyone involved,” Piccoli said. “These partnerships can not only result in experiential learning opportunities in the classroom, but businesses can gain access to expert knowledge from professors and fresh perspectives from students.”
Each class came to a similar conclusion of a hybrid approach by staying on the third-party apps, and then transition to a native app (app owned by CGH). Staying with the likes of UberEats and DoorDash for some restaurants under CGH’s umbrella will draw new customers for conversions. Currently, Hightower and CGH’s marketing team are working with PopMenu to handle their online ordering, and they’ve seen positive feedback.
“PopMenu has been a great integration for us,” said Hightower. “We have intertwined our operational digital transformation with a pointed marketing effort to capture incremental added sales across all of our restaurants. This focused approach to online traction, and using the latest in restaurant technology, has been a rewarding and successful process for City Group Hospitality.”
For now, Hightower and his teams plan to analyze the study’s findings, and evaluate each concept before deciding on their future. Overall the partnership has opened doors for his businesses.
“It was a monumental shift for me to engage with Piccoli,” said Hightower. “To be a real business leader, you must seek out other perspectives. This partnership has rejuvenated me to take City Group Hospitality to another level.”
By Nicole Koster