1. From an article posted on LinkedIn, Summer, 2016
Not so long ago, Panera Bread was anything but a digital trailblazer. Founded as St.
Louis Bread in the 1980s, the company was managing 2,000 bakery-cafes throughout
North America without a significant investment in digital growth. That all changed in
2014 with the launch of Panera 2.0.
The program, which incorporates a series of integrated technologies, digitally mobilizes
everything from ordering and paying at in-store kiosks (much faster service) to
operations (employee training and protocols to ensure increased speed doesn’t
decrease accuracy of order fulfillment). Through the Panera app, a customer can now
even place an order up to five days in advance and recall their favorite meals and drinks
from previous orders.
Panera 2.0 has been a rapid success. By Q2 2015, same-store sales grew 2.4% in the
bakery-cafes that had adopted the technology compared to 0.1% the year before.
Transaction growth—a measure of how many people visited a Panera year-over-year—
increased 1.1%, an impressive rise by industry standards. By Q1 2016, earnings per
share were up 21%.
For Blaine Hurst, Panera’s chief transformation and growth officer, the results are an
appetizing validation of the tech-centered strategy that he helped craft, initially to make
up for lost time.
How did Panera 2.0 originate?
If you look at where Panera was with respect to technology in 2011, when "2.0" was
conceived, we were way behind. We had not made a significant investment in
technology for many, many years. Frankly, we had only done enough to keep the
restaurants running. Clearly, the world was rapidly changing in terms of how consumers
and entire industries were adopting mobile technology. That wasn’t yet widespread in
our industry, but we knew it was only a matter of time. We knew we had a chance to
lead.
How did customers respond to the new ordering tools?
Technology rapidly transformed our business. Across our digital platforms, we now
process between 130,000 and 150,000 customer transactions every day—which far

2. exceeds our early expectations. We’ve converted roughly 500 of our cafes to the 2.0
model over the past 18 months, and all of the new stores we open this year will be 2.0
versions. This is how we’re going to be doing business from now on.
What's the key metric for assessing the program’s impact?
We measure 2.0's success, first and foremost, in terms of whether or not it’s growing
sales, and the answer to that is definitely yes. In Panera 2.0 cafes, sales are growing
faster than our other cafes by multiple percentage points, and we foresee $1 billion in
digital sales by 2017.
See also: Blaine Hurst On Navigating A Digital Transformation
What’s been the most surprising ripple effect of the company’s focus on tech?
The most significant positive change that we didn’t foresee was the material increase in
the frequency of return guests to our 2.0 cafes. Panera has one of the largest loyalty
programs in the restaurant industry, with more than 17 million active members and more
than 11 million customers we are able to reach through email. We are able to view data
on how often members visit our cafes. When we saw the increase in frequency of visits
once loyalty members became rapid-pickup customers or kiosk customers, it was a
striking, and unexpected, result.
We also receive about 200,000 email survey responses each month from our loyalty
customers, which provides phenomenal insight into what's working, and what's not.
That’s an enormous amount of data with invaluable perspectives on our innovations to
date, and a key source of insight.
What’s the role of data in Panera’s growth strategy going forward?
I’m old school in an entrepreneurial, gut-feel, talk-to-customers kind of way. The
challenge with that model is as you get to scale, there’s no way to be omniscient. With
our 2.0 data, we can very quickly assess what’s working and what’s not working, in any
region of the country or customer segment. But even with this ability to get quick reads
and to rapidly adjust, we’re only scratching the surface of the sort of radically
transformed value we can deliver to customers.

3. I don’t believe data can replace the entrepreneurial core of what we do. Panera 2.0 isn’t
all about the technology. In the end, the only thing that really matters is the guest’s
experience. Panera must be a great place to eat. When you walk down the street
holding a Panera cup, how do you feel? That’s the real question for us, and no matter
how much or how fast we grow, we can’t ever lose sight of that.