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National   /   April 16, 2021

Paul Bubny
By: Paul Bubny

Newly Opened Taco Bell Flagship Combines Experiential with Digital

Taco Bell recently opened a flagship Cantina restaurant at the Paramount Building in Times Square, the 20th New York City location for the concept. Aside from the relative novelty of a new restaurant opening up during a year that has seen too many close their doors, there’s nothing too remarkable on the face of it. However, Forbes’ Alicia Kelso reports that there’s more to the story.

“For starters, the location is fully digital, meaning customers order food (and souvenirs) via kiosks (there are no menu boards), and pick up their meals through cubbies dedicated to digital orders,” she writes. These digital features first appeared in a franchised Cantina run by Diversified Restaurant Group.

“[Diversified] invented the idea of the Cantina and the concept does well,” Taco Bell VP and global COO Mike Grams told Kelso during a recent interview. “It is digital meets human connection come to life in a restaurant. That experience is built for a consumer that has adapted to mobile and order ahead.”

Keslo reports that this consumer cohort has grown “exponentially” over the past year. Taco Bell’s digital channels generated about $1 billion in sales during 2020, and digital sales made up about 12% of its sales mix in the fourth quarter.

The chain has its sights set on reaching 50% in digital sales and has been making moves toward this goal, “not only through its new mobile-centric, double drive-thru models, but also through its upgraded loyalty program and back-of-the-house enhancements like a digital makeline.”

These digital features would seem to fit nicely into Taco Bell’s Go Mobile concept, or a Starbucks Pickup location, Kelso noted. “It seems less intuitive, however, for more of an experiential concept like the Cantina,” she reported.

The Cantina launched in 2015 with a focus on “urban design”—a watchword that seems to rule out drive-thrus—and alcohol sales, “but has since evolved to fit diverse markets,” writes Kelso. “The locations now exist everywhere from California’s beachfronts to the Las Vegas strip, for example.” The recently opened Danville, CA location—the first drive-thru Cantina—includes a fire pit and cornhole area.

“This idea of having a dine-in atmosphere with booze has been a way for Taco Bell to differentiate within the quick-service sector, as well as its own portfolio, and perhaps test whether or not consumers are willing to linger (and drink) with the brand,” Kelso writes. “The Cantina’s continued growth shows that they are, but the pandemic abruptly halted any comfort in such lingering.

“This new Times Square restaurant could be an effective way to marry the pre-and-post-pandemic demands of experience and digital.”

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About the Author

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism.
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