Restaurants are leaning into data and tech to drive business decisions, improve customer experienceRestaurants are leaning into data and tech to drive business decisions, improve customer experience

Pulled between the desire to believe the pandemic has finally ended and anxiety about mounting economic tensions, many consumers seem to be revising their budgets and reining in their discretionary spending. To bring them into restaurants—and back for more—operators will need to understand price-conscious consumers’ top priorities.

“To steal share from competitors, restaurants must attract new and light users–it’s really about customer acquisition,” says Rob Crews, restaurant strategy director for Vericast. “Everyone is doing a good job of driving frequency, but they’re not driving customer acquisition.”

To continue to drive frequency and acquisition, operators need to better understand today’s consumers’ top priorities:

No. 1: Dollar-stretching deals

In an uncertain economy, a good deal can trigger someone to eat out (and where) instead of staying at home. Coupons and discounts have the power to prompt consumers to make repeat visits and increase the frequency of those visits—plus positively impact the average order size, offsetting consumers’ urge to order fewer items to offset higher-than-normal prices.

According to a report from Vericast, 61% of consumers surveyed say a coupon, discount or promotion is influential in the decision about which restaurant to order from, and 54% say they will spend more at a restaurant when they have a coupon.

As a result, many quick-service and fast-casual brands are getting creative with incentives that focus not only on dollar-stretching discounts but also delivering more value. Take Taco Bell, for example, which kicked off 2022 with its value-centric Lover’s Pass, a taco subscription service that allows customers to receive one of seven of the brand’s tacos each day for 30 days for just $10. Meanwhile, Chili’s is offering new happy hour pricing on food and drinks during televised college and NFL football games throughout the season. The promotion includes nine new flavors of wings, deals on beers, a Chili Philly sandwich, and Chili’s Ranch Water.

While deep discounts once meant consumers would take advantage of an offer and move on to the next, these days the right deal can pay off in loyalty. Vericast’s Restaurant Report, for example, indicates that 45% of consumers report positive feelings for brands offering coupons and discounts.

Of course, not all consumers are motivated by such deals. Households with incomes of $150K or greater continue to be less price-sensitive than their lower-income counterparts. These consumers are less likely to be adjusting their dining-out budgets, and so restaurants are likely to have success attracting them with more tangible benefits—think innovative products and insider secret menus—rather than discounts.

No. 2: Convenient options that facilitate last-minute dinner decisions

Answering the daily question ‘What’s for dinner?’ often means that visiting a restaurant or ordering take-out is often an in-the-moment decision. Whether due to being busy or just not feeling like cooking, nearly half of all consumers decide on the same day to eat out, recent research reveals.

To appeal to consumers’ spontaneous needs, operators will need to be at-the-ready to serve up a seamless and convenient experience. One way some major chain operators are doing that is by reducing friction for their consumers—and their franchisees—through continued investments in technology. For example, by continuing to invest in its digital-ordering technologies, Darden Restaurants, the parent of casual-dining chains Olive Garden, Longhorn Steakhouse, and Cheddar’s, has seen to-go sales increase to levels similar to that of dine-in sales.

“Our technology investments have created an infrastructure that reduces friction for our guests and our operators,” Rick Cardenas, Darden’s CEO and president said in a recent earnings call.

No. 3: Meet consumers where they are

Once creative deals and convenience are set, operators need to consider what channels consumers are getting information from and meet them there. By understanding what platforms and media their consumers are active on, restaurants can make better decisions about marketing tactics and advertising spend and customize their messages to the consumers.

More restaurants have mobile apps these days, but research shows there’s no single way consumers want to receive information—or their restaurant deals. According to the January 2022 Prosper Insights & Analytics MBI Study, 35% of dining out purchase influence is driven by digital media, while 30% of purchase influence is driven by print media. And don’t forget the seemingly old-school television and radio, which drive 10% and 9% of dining out purchase influence, respectively.

Among operators driving sales with a multi-channel approach is Paul Urbina, a Papa John’s franchisee owner in California. When the pandemic started Urbina considered pulling back on, and even canceling, his location’s advertising campaigns. Instead, he launched a targeted campaign promoting the store’s large/extra-large pizza offer and then delivered it via both direct mail and mobile. The result was high consumer engagement and best of all, a better-than-industry 14.3% year-over-year sales lift.

The pandemic recovery and the economy may remain uncertain, but what consumers want from restaurants is clear: value deals and convenience solutions delivered directly to them via their preferred platforms. In this environment, operators who can deliver on these priorities will stand out from the competition.

Ready to learn more ways to amplify your restaurant’s marketing? Contact the data, media, and technology experts at Vericast to get started.

When it comes to eating out, consumers’ behavior isn't what it used to be, but many restaurants’ marketing approach is the same-old, same-old. Our experience shows that while a large percentage of restaurants have shifted to digital and launched mobile apps, a one-dimensional approach—no matter how high tech—is insufficient to connect with consumers today. To remain competitive, operators will need to shift their strategy.

According to the National Restaurant Association's 2022 State of the Restaurant report, 51% of adults surveyed say they aren’t dining at restaurants as often as they would like, which is an increase of 6 percentage points from before the pandemic.

To capture more consumer visits, restaurant brands need to engage in an omnichannel marketing strategy that drives both reach and frequency. Here’s what operators need to know about omnichannel marketing now:

Right time, right strategy

As recently as a decade ago, a restaurant might have shared its promotions, offers, and news on its website, its Facebook page, and in banner ads. Those that are still stuck in that brand-centric, multichannel approach are missing out on a huge opportunity to link those touchpoints together to create a unified—and more satisfying—customer experience.

Today, operators need to center on customers more than their brand. To do that they cannot be solely focused on the walled gardens like Instagram and Facebook. The Pew Research Center found in 2022, that only 32% of 13- to 17-year-olds (a coveted QSR demographic) use Facebook, a drop from 71% in 2015. Restaurant operators must embrace consumer-first marketing strategies across multiple digital platforms that allow customers to engage with their brand universally and harmoniously. For example, if a customer visited a restaurant’s website and started an order there, they could also track that order in progress on their mobile device, and they could encounter ads for that restaurant and relevant offers in their social feeds as well. The result is increased customer satisfaction, increased customer base, improved loyalty, and boosted revenue.

“Omnichannel is more than selling your restaurant’s products and services,” says Peter Boivin, Head of Industry, Restaurant at Vericast. “It’s an opportunity to connect with your customers where they are and to serve up a great brand experience that is customized to their specific needs."

Indeed, some of the most successful restaurants of 2021—brands like Brinker International, parent of Maggiano’s and Chili’s—grew their omnichannel approach. Nation’s Restaurant News reports that nearly one-fifth of the chains on its 2021 Top 500 list grew their average unit volumes, many by double-digit percentages, through omnichannel digital expansion.

As high inflation and other challenges have increased operators’ need to find more ways to grow frequency without impacting already slim margins, taking an omnichannel approach will continue to be important in the future.

Kick it old-school, too

Despite that most Americans—about 85%—own a smartphone and that the number of restaurants that have an app for them to download continues to expand, there is no single place consumers seek information about restaurants.

According to the January 2022 Prosper Insights & Analytics MBI Study, 35% of dining out purchase influence is driven by digital media, 30% by print media, 10% by television media and 9% by radio.

It may seem old-fashioned, even outdated, but consumers, including younger generations, are still looking at print advertising. In fact, according to Vericast’s Restaurant Report, 42% of consumers surveyed use print ads to help them plan restaurant visits.

Print advertising can also push consumers to a restaurant’s digital channels. Vericast’s report, based on a September 2021 survey of 1,802 consumers, also notes that after seeing a print ad, 72% of Gen Zers and 74% of millennials will go online to review a menu or download an app. Additionally, 23% of Gen Z consumers will go online after seeing a print ad to order at a restaurant (versus just 9% of baby boomers). Operators trying to attract families may find it helpful to know that 65% of millennial parents and 51% of Gen Zers will look through print ads for restaurants.

Indeed, the results speak volumes. Certain quick-service restaurant chains using services such as Vericast’s Save Direct Mail to deliver value messages experienced up to a 36% visit lift compared to control locations.

The big benefits

Research shows that loyal customer relationships are built through communication and that restaurant operators reap the biggest benefits when they routinely interact with customers. By taking an omnichannel approach—continuously being on many channels digital and otherwise—operators can make the offline-online experience consistent and seamless.

It takes a bit more time and energy to implement an effective omnichannel marketing strategy—and perhaps a strategic partner, as well. But the benefits of retaining more customers and continuing to grow your business far outweigh the investment.

Ready to get more insights into omnichannel marketing strategy and elevate your brands’ efforts? The team at Vericast can help.

As the VP of a technology solutions provider for restaurants of all sizes, with more than 20,000 restaurants using our company’s technology, there are common misconceptions surrounding how digital can be fully leveraged and maximized to drive profitability. When looking at the data from the most successful of these restaurants, there are a few trends that rise to the top.

This is by far the biggest misconception (and opportunity) that is proliferated across today’s restaurant landscape. 

As the Grubhubs, UberEats and DoorDashes of the world have proliferated, so too has the false narrative that third party delivery is the “bane of small restaurant’s existence,” a necessary, but frustrating, pillar that sucks up all of the profits.

At the heart of this narrative is fees. Without question, third party platforms charge a hefty premium to facilitate the delivery. What’s required here is a re-orientation of the role and purpose of third party within the greater landscape of a restaurant’s outreach activities.

From a strategic standpoint, the restaurant should not view third party ordering providers as food deliver services — at least, not as far as the small restaurant owner is concerned. Its real roles are reach and visibility, which, for the line-item minded of the world, makes it a marketing expense.

Bringing mass visibility to smaller businesses while enabling them to have their food delivered without the infrastructure of employing drivers is not a bane. It’s the cost of marketing — and marketing is not cheap. It gets you more customers, but it costs you money.

No one I talk with ever says they don’t want to acquire new customers that they can then serve over and over again. Because that would mean the end of their business. Strategically, first party can fulfill this objective. 

The analogy I like to cite is that of a sign spinner near a physical location. Their job is to stand outside and point customers inside. For every customer that comes in and dines, this person gets a commission. Of course, once you’ve got these new customers in your restaurant, you can push them further down the funnel by letting them know that there’s a side gate where regulars can walk in of their own will. This open gate is the first party, and the sign spinner outside advertising your restaurant is the third party. Both of them working together is what creates a great flywheel.

Soggy fries are the price of third party

Nope. They’re not. 

Nobody likes soggy french fries or a lukewarm entree. But the problem lies not with the driver, but the timing of the order. If a driver is 20 minutes away when the order is received, and instantly sent to the kitchen, you are likely going to have that order sitting around waiting. Matching the arrival of the driver to the timing of the order is crucial, but easily done. The order can be held until the driver is within a distance proximate enough to ensure the food is handed off with as much product integrity as possible. Protecting food quality protects the guest experience. Faster delivery times, better delivery handoffs and optimal food quality are foundational to happy customers, good reviews, and repeat business.

Multiple vendors makes true accounting impossible

One thing that’s not a myth: the financial inconsistencies between a restaurant’s POS and third-party delivery reports. That is 100% real. So are the accounting headaches that small business owners incur in trying to reconcile what their bank is telling them has been paid and what the third party delivery invoice is claiming. The good news is there are solves for this and they’re as efficient as they are financially expedient. Regardless of the mechanism for reconciling accounting issues, ask your technology solutions provider to give you an automated way to identify inconsistencies.

We know that when third-party delivery goes offline, it is the restaurant that takes the guest sentiment hit, whether on a review site like Yelp or via word of mouth. In fact, Tattle, which measures guest sentiment and is integrated with ItsaCheckmate, recently uncovered that during a three-hour window when a major third-party delivery player went down, guest sentiment of restaurants dropped 30%. Regardless of who or what the culprit is, when the food experience is not up to expectations, the restaurant is the one that suffers the consequences. 

As unpredictable as guest sentiment may be due to forces beyond your control, it is not unmanageable. Be sure your team members must have simple, turnkey access to being able to switch off delivery providers and pull down menus from online ordering platforms if an issue arises. If your team has that plan in place and is ready to activate, by the time the restaurant is informed of a provider being offline, damage has been done with guests unhappy with their experience.

Like the best restaurants, doing the basics exceptionally well is what wins. Times, tools, and technology changes, but setting yourself and your organization up for success by leveraging the resources, digital or analog, around you, does not.

Restaurants are facing multiple compounding pressures as high inflation drives customers to dine out less and persisting staffing shortages hinder smooth operations.

Many operators are pulling back, cutting certain elements of service to minimize costs. Yet diners are looking for the opposite: heightened experiences that make dining out and spending their hard-earned money worth it, even with increased prices. To that end, forward-thinking operators are turning to advanced technologies that both enhance the restaurant experience by offering more tailored service and help reduce costs. 

One such tool is facial recognition technology (FRT), which can be integrated into restaurant management and POS systems. By instantaneously and accurately identifying regular diners, it can offer a myriad of helpful ways for restaurants to enhance their customer experience without breaking the bank. As restaurants more fully embrace technology in their kitchens and dining rooms, facial recognition will boost efficiency for operators and create more personalized experiences for expectant guests.

Maintaining attentiveness amid labor issues

With new Yelp data revealing that customers mentioned short-staffing 229% more in reviews from Q1 2022 than in reviews one year prior, it’s understandable that more operators are turning toward tech tools to combat the effects of staff shortages. Particularly at quick-service and fast-casual restaurants, kiosks equipped with facial recognition can maintain the attention to detail that’s essential for excellent hospitality service, even when a restaurant is understaffed.

Instead of having to wait in a long line to interact with a cashier, a customer can now approach a kiosk and be instantly recognized as a loyal diner. The kiosk then instantly pulls up their loyalty program profile, complete with their past order combination history, allergy and rewards information, and payment details. From there, the diner can quickly select a favorite order combo and be able to pay from the card they already had on file, while automatically earning loyalty points. 

The kiosks can also be especially helpful for allergies since they are able to identify a conflict with a dish even if the customer had not mentioned an allergy during the ordering interaction. With rising ingredient costs, using technology to catch these small details helps operators avoid costly order mistakes and ensures diners have a seamless and safe dining experience.

To properly integrate cutting edge biometric tools, it is also important for restaurants to communicate the benefits of programs like facial recognition and streamline the opt-in process so each customer has easy access and understands the restaurant’s limited use of their personal data. As a bonus, these kiosks also don’t have to be prohibitively expensive, since the top FRT solutions can integrate into almost any camera and easily be installed on an existing operating system.

Crafting deeper personalization

FRT can go beyond just streamlining the ordering interaction, to create even more tailored experiences for demanding diners. The key is connecting FRT to the restaurant’s customer relationship database through specialized integrations, which allows hosts and servers to access and act on diner preferences from the moment they walk in the door.

Hosts can use facial recognition to instantly identify a return customer, greet them by name and guide them to their favorite table. For those customers who want their restaurant dining experience to be more familiar, FRT could also help a waiter get to know who they are serving before they even approach the table. A waiter would be able to see a diner’s past order history to offer more tailored recommendations and acknowledge any allergies on file. As the meal ends, the waiter could even have a diner verify their payment information with their face. 

At its most extended application, facial recognition could even make the restaurant experience feel more consistent across venues for loyalty program members. Once a customer opts-in to a restaurant group’s system, they could be recognized across any of their establishments, ensuring a tailored experience, unique dish recommendations, and the opportunity to earn loyalty points even if they have not dined at that specific location before. This kind of instantaneous personalized service technology is already being implemented at casinos, and smart restaurants are fast becoming a reality, with McDonald’s already testing voice-recognition at their drive thrus.

Leaning into technology

Consumers wary of spending money amid increased inflation harbor higher expectations for when they do choose to dine out. So, restaurants should invest in new technologies to not only maintain the highest level of attention to detail but also enhance each diner’s experience with instantaneous personalization.

With a little help from advanced technology like facial recognition, restaurants can weather the current maelstrom of economic and labor challenges to focus on creating a guest experience that will keep diners coming back.

Employment is a revolving door in the fast-food industry, and the pandemic only made things worse. Staffing shortages in the last few years have caused loss of productivity, forced restaurants to cut down on hours, and left them no choice but to limit their service options. In 2021, a whopping 86.3% of accommodation and foodservice workers quit their jobs.

Most fast-food brands employ people younger than 25. Attracting a younger workforce can be especially difficult; there’s little wiggle room in terms of wages and it’s often hot, unglamorous work. For this reason, it’s imperative to know how to tap into the new generation that already makes up more than 12% of the country’s workforce.

As a manager at Wendy’s for the last five years and a member of the Gen Z generation myself, I have learned that recruiting and keeping young talent is just as much about making them feel valued as it is about offering incentives. In my experience, simple, small, thoughtful changes can lead to big results. It’s one of the reasons my location had the lowest turnover in 2021 out of three-dozen stores in the Pacific Northwest.

Here are a few ways you can attract and retain Gen Z workers.

Offer referral bonuses

This simple incentive has proven to pay dividends. In the height of the pandemic, many fast-food restaurants began offering referral and retention bonuses. Chipotle, for example, offered $200 for a referral of a crew member and up to $750 for a general manager.

Offering referral bonuses can help incentivize employees to choose your business over the competition. And there’s an added bonus of being able to work with their friends — a win/win!

Promote flexible hours

The pandemic shifted many jobs to become remote-first, which only makes it harder to recruit for in-person positions. We learned that offering flexible hours can significantly help attract younger employees who may be juggling school and sports activities.

Placing college students on a leave of absence so they can return during holidays and breaks and commit to several shifts can actually make a huge difference when turnover is high. As someone who has made our employee schedule for over a year, I’ll admit that flexible schedules can make the task harder, but it still outweighs being severely short-staffed by a long way.

You can also post open shifts online and let employees choose which shift works best for them on a first-come, first-serve basis, and let them swap with one another.

Promote a safe, fun work culture

Establishing a positive work culture cannot be over emphasized. People, regardless of age, have choices of where they want to spend their time, so unless you create a positive environment, employees are going to find somewhere else to work.

Creating that ideal work environment starts at the top, so make sure your managers are facilitating a safe, friendly atmosphere. Training is particularly important too; when someone is trained properly, they will feel more confident, which will help them succeed. This requires patience and positive reinforcement — even when times are really busy.

Remember, for many Gen Z employees, this may be their first job. Offering a little extra guidance, patience, and kindness will go a long way. If you’re making them perform a mundane task, explain why that task is so important for the health of the business. Understanding their overall role in the system reduces friction and promotes a feeling of responsibility.

Get creative on how to motivate

In some cases, providing a competitive wage may be difficult, so you need to think outside the box. Some of the things you can do to motivate employees are really quite simple and cost effective.

For example, at the Wendy’s location I manage, we have a live ranking of the drive-thru speed at the different locations in our franchise, and we try to be the fastest store at the top of the leaderboard. While this may sound simple, this healthy competition created a sense of camaraderie among our employees, making something potentially tedious feel fun. (It increased our drive-thru speed times too!)

I also give out Wendy’s pins to employees who go above and beyond. Employees can put those pins on their hats to display the recognition they received to coworkers and customers. Again, something small can make someone feel valued.

At the end of the day, your employees are your biggest investment. In the next few years, many of my Gen Z colleagues will be entering the workforce. Spending a little extra time to train and support us is worth it in the long run.