Shopping Center Business

MAY 2017

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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RETAIL REVIEW 80 • SHOPPING CENTER BUSINESS • May 2017 "We looked at that data and even though the service times from the old layout to the new layout were pretty comparable, the perception of the consumer is higher in terms of customer service," says Roton- do. "They are more highly satisfied in the new prototype — the perception is that the service is faster and better because [customers] can talk to smoothie makers while they're making their smoothie." Rotondo says the company hopes to have nearly all cafes remodeled with the new look by the end of 2017. "We made a lot of progress last year," he says. "By the end of this year, we should be looking at 90 to 95 percent completely converted over to the new décor." From that point on, it's full steam ahead as Tropical Smoothie Cafe is on track to nearly double its unit count by 2020. "By the end of 2020, we'll have 1,000 units open," says Rotondo. "And that's real. When you look at our pipeline, we could stop selling franchise agreements today and we'd still get to 800 or 850. So we'll continue to sell over the next couple of years and continue to open, and we will hit 1,000 cafes." NEW TECHNOLOGY It's hard to have new growth without innovation and an adequately large sup- port center to, well, support the afore- mentioned growth. Tropical Smoothie Cafe is growing quickly, adding new prod- ucts, and always innovating. The compa- ny embraces new technology, allowing it to grow faster and bigger, with a solid network of digital support. One digital partner is Jolt, a software program that heightens operational accountability and communication in the restaurant space. "Jolt has been great for us," says Ro- tondo. "It was actually designed by a multi-unit franchisee that needed better accountability in his stores. Everything is captured in this software." For example, say your restaurant has an opening checklist that should be complet- ed by 10 a.m. With Jolt keeping everyone accountable, if the checklist is not com- pleted by 10 a.m., the franchisee or man- ager receives a mobile alert letting them know the checklist was not completed. In addition to accountability, Jolt also can be used for communication. A fran- chisee can make a video about the "new promo starting Monday" and upload it to Jolt; when the employee clocks in the vid- eo will automatically scroll up and begin playing, reminding the employee about the upcoming promotion. "It's upping our game in communi- cation to the hourly staff, and it's really upping our game from an accountability standpoint," Rotondo says. Before Jolt, accountability was handled via paper checklists and clipboards. "So a franchi- see, especially a multi-unit franchisee, didn't really have visibility to those things. Now he can log in to his account, look at his different cafes and see who's com- pleting tasks on time, who's not, all those things. We went from Fred Flintstone to the Jetsons." Other digital programs propelling Tropical Smoothie Cafe into the Jetsons' futuristic world are Olo and Level Up. Level Up is Tropical Smoothie's loyalty partner and Olo handles online order- ing. Both work in tandem in the Tropical Smoothie digital app. "We're super proud of the app," says Rotondo. "We have had over 1.5 million downloads. Our custom- ers love it; they use it on a regular basis. The average transaction for people using the app is almost 10 percent higher than a typical transaction." The app, which fully launched sys- tem-wide six to eight months ago, is in- creasing frequency, increasing average check, and now increasing its numbers on Order Ahead. People order and pay on their phones; then they simply walk into the cafe where their order is sitting on the counter with their name and their receipt. They pick it up and go. "It's really changing how we look at our business because we're not just trying to keep up with the trends — what we see is that our brand, our core consumer, this is how they want to interact with us," ex- plains Rotondo. "There are other brands that have launched apps, but not with the type of results and not with the type of downloads that we are seeing. Our cus- tomers are loving it." To meet increased demand for tech- nology, Tropical Smoothie Cafe has hired more people to work exclusively on dig- ital innovation. Technology used to be more of a sideline than a focus; certain employees in Tropical Smoothie's sup- port center would tinker with digital and the app in addition to their regular job du- ties, but now the company has two (and soon to be adding two more) people that are solely dedicated to the digital space. The support center itself is also growing: In 2012 when Rotondo arrived, it had approximately 16 employees. By the end of 2017, the company will have 75 employ- ees in its support center. "We are staffing it up," says Rotondo. "We believe that is a big part of our future. We're going to continue to evolve the way people interact with our brand through that mobile device." As Tropical Smoothie Cafe looks to- ward the future, digital technology will be a major cornerstone of its foundation. Existing franchisees are also a major cor- nerstone. More than half of all franchise agreements signed every year are with ex- isting franchisees. "I think that says a lot about the brand and where we're going," says Rotondo. "We're growing in a way that is sustain- able. Most of our growth is coming from transactions, not from checks. Other brands will raise prices on their menus, so they get some growth but they get it from check, from people spending more. The majority of our growth over the past three to five years has come from transaction, more frequency, new people coming in. That's sustainable." SCB Tropical Smoothie Cafe also received an exterior signage refresh as part of the new design.

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