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This a unique and disruptive time for all marketers, especially restaurants. Most already understand that pinpointing customer behaviors and desires is extremely difficult, especially when trying to understand preferences for specific food offerings and how to drive customer loyalty. Doing so becomes even more arduous when the changing tastes of millennials and Gen Y have to be taken into consideration; temporal cuisine fads and expectations drive sometimes irrational interests that can be hard to execute on.
Many groups often prefer a dining “experience” over simple, traditional settings and fare. They want unique, in-store events to participate in, such as games and other activities, and sometimes they want to take their food into nature or the home to create their own experiences. This creates product control and service delivery issues as take-out intermediaries (which the restaurant may not have control over) can impact the offering and experience.
Loyalty360 speaks with senior level market representatives across a range of industries to identify the challenges, opportunities, and best practices for driving customer loyalty and increasing growth and revenue. In a recent conversation we conducted with such representatives on how customers are changing, several concepts emerged that are of specific importance to the restaurant industry. We’ve found that most restaurant brands want to offer healthier food, focus on small groups of loyal customers, and create consistency across all engagement channels (including SMS, mobile, app, online, and in-store).
Just like other marketers, restaurants have to simultaneously keep up with new technologies and platforms and make sure their products resonate, as well as make sure they train their staff in an effective manner. Their operations need to be smooth and their employees must be engaged. Many of the great restaurant brands we’ve had the pleasure of speaking with are leveraging technologies and partners to help them excel in the areas they focus on, bringing great fare to their guests. Their passion for the customer is unwavering.
From our conversation with these brands, we identified that restaurant customers are changing because of new technologies. These include mobile applications, mobile-friendly platforms, and the services that germinate from the on-the-go lifestyle that mobile technologies create. Here, we present an overview of this change and the quotes from brand representatives that led to this overview.
Customers have come to expect that they can engage with their preferred restaurant brand through mobile applications and mobile-friendly websites. They want to be able to order food online, without speaking to a representative, because it is faster and more efficient. They want to have access to a restaurant’s menu and offerings while they’re out of the house buying groceries, hanging out with friends, or walking to their cars after seeing a movie. In short, because of the advent of mobile technology, they expect their favorite restaurants to have an entrenched mobile presence.
Bindi Menon, Vice President of Marketing Analytics and Insights, Captain D’s Seafood Kitchen: The customer is evolving because the technology all around them is changing. Ever since 2007 or 2008, when the iPhone first came out, there’s been a lot of changes. Now, instead of driving down the street and seeing where you want to eat, you can just go on your phone and look around and see who will deliver or who is doing online ordering, so you can just pick up. We’ve found in recent years that the number of people going inside the restaurant to eat is reducing and the number of people who are ordering food to go is increasing. Like with retail, where a lot of the shopping is being done online and not at concrete stores, the people are changing. They’re going back to the home or the office. And as people’s habits change, we have to evolve as well. Our focus is how can we serve the customer better, how can we make it easy for them to buy from us, how can we make that experience awesome.
To read the full article with Bindi—click here.
Andrea McCullough, Director of Marketing and Analytics, Dunkin’ Donuts: In terms of change, the technology is certainly evolving. With customer needs, some of the things are what they’ve always been, such as wanting a convenient, easy-to-use experience. The degree that we can use technology to improve that experience for them is something we are really focused on.
The demand comes from the ability to customize but also the convenience play. We are a 68-year-old brand, and in the past you’ve always had to place your order in-store and pay in-store. Today, we are allowing a lot more flexibility for guests by allowing them to order on their own terms. They can place an order well in advance and then hit send to the store when they are ready. Overall, we are allowing more flexibility which guests are starting to rely on and get used to. I don’t think it’s going away any time soon.
To read the full article with Andrea—click here.
Two: Off-Premise Dining
Mobile technologies and GPS tracking enable faster, more accurate delivery services—and this development naturally leads customers to expect expanded dinner delivery offerings. Thus, more and more customers prefer eating in the comfort of their own homes because they can still enjoy the delicious fare that restaurants provide without hassling with busy dining rooms, waiting lists, and inconvenient parking. This also accounts for the mobility movement within the restaurant industry. Food trucks, temporary kitchens, and other portable food vending apparatuses have proliferated since mobile took off, and the result is that fewer and fewer people are choosing to eat on-site. Instead, they eat on-the-go and in the home.
Don Fox, CEO, Firehouse Subs: At the end of the day, you just have measurably less people dining in. As it is, the restaurant industry, for the last year and a half, has been experiencing soft traffic. If I were to consolidate it all, I’d say traffic is down about two percent and sales are flat. I will add that the off-premise occasions are happening through a greater number of transactional channels, which adds complexity to the operator. There has been a surge in delivery services, whether third party or companies doing it themselves, that is satisfying a current need state for the consumer. The things you need to do operationally to satisfy that off-premise occasion is much different than somebody walking into the store and ordering [food] from you. Operators have to be good at dealing with all of these channels of trade.
To read the full article with Don—click here.
Three: A Greater Number of Choices
Mobile technology has also given restaurant customers an endless supply of dining options. Before this technology entered the scene, restaurant-goers kept a mental catalogue of eateries in their area and drove to central locations to see which option struck them as most appetizing. They might have also kept a few paper menus in their junk drawers at home to review when they wanted take-out. Now, however, people can consult an interactive map of surrounding areas to look for restaurants. In this way, they’re often made aware of remote or out-of-the-way dining options that might appeal to them more than just what they can see from their car windows. Because of this, competition in the restaurant industry is intense.
Brandon Rhoten, CMO, Potbelly: There’s more choices than ever. That means they don’t have to choose us. We’re not a default option. We’re something they have to actively seek out. I think consumers are smarter than they’ve ever been, which is great. I think the days of you just saying really loud, “My brand exists, my product exists” and people just showing up are long gone. We’re in a spot now where customers are very well educated on what choices they have available to them and ultimately can choose the thing that best serves what they want. The kind of Amazon review effect has occurred where if a restaurant is any good, you can jump on Snapchat or Twitter or Instagram or Facebook or one of the 25 restaurant review sites and find out in about five minutes whether you should spend your time or money there. When a brand is trying to sell you something that isn’t real, you can immediately recognize that and fact check it because you have a computer in your pocket.
To read the full article with Brandon—click here.
Mobile technology accounts for many of the changing behaviors that restaurants are seeing in their customers. It explains why people want a convenient dining experience that caters to their lifestyles. It explains why more people are eschewing on-site dining and preferring, instead, to eat in the comfort of their homes or as part of an on-the-go experience. It also explains why restaurants have to work as hard as they do to acquire new customers and maintain them with loyalty experiences like points-redemption-based platforms. However, while mobile technology creates challenges for restaurateurs, these challenges are also opportunities. Restaurant brands can create unique and enticing food products, design new ways for customers to engage, and differentiate themselves with expanded services. In all, the current marketing environment, while tense, is also very exciting.
This article is derived from a larger feature on how and why customers are changing across all industries. To view it, please click here.
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