March 19, 2021

Everything You Need to Know About Personalization for Restaurants

It used to be that all restaurants needed to attract customers was a catchy jingle, a memorable mascot, and a signature menu item. While a strong brand identity is still important, it’s not enough in 2021. Today’s customers want to do business with companies that understand them as individuals.

According to Accenture, 91% of customers are more likely to frequent businesses that personalize their experience. That can be by recognizing them as a returning customer or providing offers and recommendations based on previous purchases.

Personalization is the key to cross-selling and providing excellent customer experiences, and with 87% of restaurant customers planning to continue with mobile and online ordering even after the pandemic, the need for personalization isn’t going away. To offer the personalized service today’s customers expect, restaurants must adopt technology that illuminates individual customer preferences.

Are you looking to enhance retention, engagement and conversion through personalization?

Join us and our friends at Amplitude on April 22 to hear how other leading restaurants are using personalization in their businesses.

March 11, 2021

Retaining the divided attention of post-COVID QSR customers

Quick Service Restaurants face an uncertain future. Here’s how they can win in a digital marketplace with customers staying at home.

With the pandemic altering the definition of “normal” across industries, Quick Service Restaurants (QSR) have been amongst the fortunate few able to stay afloat.

While foot traffic to fast food and casual dining settings has fallen 45 per cent and 67 per cent respectively, QSR establishments have scaled inherent delivery and pick-up capabilities to serve those customers still looking for a quick and easy bite. Yet, restaurants are now contending with new and unpredictable trends that will put this resilience to the ultimate test.

QSRs in Canada have witnessed business drop by at least one-third since the pandemic hit, for a multitude of reasons.

While at home, customers are cooking more and taking the opportunity to discover and order food from new restaurants that they wouldn’t normally look to. Within this new dynamic, however, people are naturally spending more time weighing options and spending 31 per cent more time per session. It’s becoming considerably more challenging to capture the wallet share of the connected customer, who has grown accustomed to third-party ordering platforms like DoorDash and GrubHub.

Customers are increasingly loyal to platforms rather than QSR brands themselves. On top of this, restaurants have found themselves battling against a new competitor: meal kit subscriptions. Discouraged from visiting restaurants, customers’ interest in preparing healthier meals with ingredients that have been picked out and sent to them is on the rise. HelloFresh is evidence of this, having grown its customer base in Canada by 74 per cent by the second quarter compared to the same period in 2019. On top of these factors, 31 per cent of Canadians indicate they want to reduce spending on takeout and accordingly are more reliant on spending on grocery, a traditional competitor to the QSR.

So what if customers never want to eat out again? This isn’t going to happen but it’s important to consider that post-pandemic user behaviour will likely not be the same as pre-pandemic behaviour. QSR operators have to accept the fact that digitally-enabled delivery options are no longer enough to secure tomorrow’s customer. Domino’s calling itself a tech company is truer than ever. In the future, QSRs will not only need to provide a great product but also a great experience with the product. Restaurants must master digital engagement and offer customers incentives to keep them coming back again and again.

What do QSR customers respond well to?

There are no two ways about it – restaurants have had to adopt digital tools to keep connected with their customers. Simply put, brands that have made the ordering experience seamless and accurate are more likely to retain their customers digitally, as they’ve successfully showcased what they have to offer. Yet, the battle for initial wallet share can only truly be won by incentivizing spend with exclusive rewards. This incentivization can occur via owned channels or through third parties.

For fast-food drive-thrus and other QSR operations, repeat business is critical for longevity and continued growth. Loyalty programs are a proven way to encourage customers to try something new, but it’s not as simple as printing out loyalty stamp cards anymore. Brands that implement gamification through tailored rewards and points will give a customer base all the more reason to keep coming back, enhancing customer lifetime value across channels in the process.

In the most recent quarter, Taco Bell, Starbucks, and Chipotle all saw their digital sales grow by record loyalty program participation, as they actively educate new users on what’s available to them. While some customers prefer ordering directly through the restaurant’s website or app, others still prefer drive-thru and more are discovering how easy curbside is. The one constant is choice. Customers who used loyalty programs spent more than double on takeout in 2020 compared to those who didn’t, making it clear that well-executed loyalty schemes end up paying for themselves.

Why should brands make digital a part of their core DNA?

Whether it’s an independent business or national chain, customers expect end-to-end experiences that deliver, as well as delight. Let’s face it: these experiences are expensive to deliver and maintain. No longer is success defined solely by product innovation. Instead, a QSR must recognize how long-term investment in digital capabilities and iterative improvements are the new source of competitive advantage. Customers won’t be willing to sacrifice the convenience afforded by best-in-class apps and sites, placing pressure on QSRs to continuously innovate the mobile experience. Look no further than Chipotle and Shake Shack as examples of QSRs that have effectively embraced digital end-to-end.

Yes, drive-thru has dominated ordering for some time, and some will still choose drive-thru over other channels as they believe it’s faster. This is a situation where education can help alleviate operational bottlenecks. If a drive-thru line extends far beyond the point of ordering during peak periods, brands should consider how they can use this time to educate customers. Moving forward, for their next order, how might you increase the likelihood they use a digital or curbside rather than drive-thru?

This drives two aims at the same time. Firstly, they can reduce the queue length, thus increasing consideration for those who may think “the drive-thru line is too long”. Secondly, increasing adoption of a digital solution is something every QSR large and small needs to focus on. It’s time QSRs start recalibrating drive-thru and looking at it as an entryway into the business rather than a long-term channel.

All of these efforts are intended to reduce the friction a consumer experiences, regardless of the channel they order on. QSRs are experimenting with even more choice by deploying text-to-order – an effective way to start a relationship that can ultimately lead to app downloads and loyalty enrolment. Five Guys is leading the charge, prompting customers to text a keyword to a short number, to which they’ll receive a list of menu options and can reply with an order. The brand takes this a step further by allowing users to save their favourite orders for faster future service. The ability to add specific details to orders, and avoid sign-up flow that typically elongates first-time web experience, means text-to-order holds massive potential as a conversion tool.

This should be considered as a transitional experience, funnelling new users into richer, more meaningful experiences and diverting them to the app. Here, customers can manage their loyalty points and access rewards (a full-circle moment from the initial incentivization), make easy mobile payments, and be exposed to a broader menu. Brands then ultimately reap the data-driven benefits. Leveraging apps gives restaurants the power to recognize loyal customers instantly, track their behaviour, analyze preferences and reach them directly, with notifications doing most of the heavy lifting to pique regular customer interest. Don’t assume an organization will be able to action this data – the ability to do so requires constant focus on how customers are experiencing your brand.

Navigating the now and future

The easing of lockdown restrictions and gradual increase in capacity of QSRs won’t mean business as usual in 2021. Limited seating will be the new safety norm. Customers will look different, with many never setting foot in your physical location. So long as QSRs stay focused on customer-centric innovation at every touchpoint of the ordering journey, they will thrive. The expectation for rewards will not falter, so long as competition remains high. Restaurants will need to lock in loyalty with the most seamless, simple mobile ordering experience, underpinned by data-backed personalization.

This article was originally published on RestoBiz.ca

March 5, 2021

Restaurants After COVID: How to Navigate the Digital Future

RESTAURANTS SHOULD CONSIDER THESE THREE CORE PRACTICES.

In a period that’s been nothing short of turbulent, quick-service restaurants have managed to make a rebound and soar over recent months. Fast-food transactions bottomed out in April to negative 35 percent versus 2019, when stay-at-home orders dictated the digital shift. Brands could no longer rely on foot traffic to drive sales, and, almost overnight, the need to meet customers in this new normal demanded a digital strategy. This figure quickly improved in December to negative 8 percent, as restaurants recalibrated. Yet, the risk of bankruptcy remains high.

As ongoing restrictions loom over the restaurant industry, 40 percent of operators are unsure they’ll make it past March this year, with up to seven million U.S. workers at risk of redundancy by June. Quick-serves that made material investments in digital operations, before the pandemic are reaping the benefits and weathering the disruption better than others. Look no further than your local Chick-fil-A during peak hours. The drive thru line likely stretches around the block, but customer satisfaction is still the highest in the industry.

Smaller brands are in a unique position. On one hand, it’s never been easier to launch a digital only brand via ghost kitchens. On the other side of the spectrum, the baseline customer expectation is a custom web app, mobile app, loyalty program and easy third-party ordering. These solutions represent millions of dollars of investment, far beyond what a small quick-service restaurant can muster. As such, it should be expected that smaller quick-serves will have a more difficult time scaling to the point that regional entities and larger brands can. Regardless of where a quick-service restaurant falls on the spectrum, keep in mind that the period of deep digital investment has really just started to heat up and organizations can’t afford to take their foot of the pedal in redesigning their digital roadmaps.

What if consumers never want to dine in again? How can brands ensure their survival?

Below are three core practices that restaurants should consider for navigating the now, comeback, and future.

1. Perfect the basics

Quick-service restaurants tend to have an upper hand on full-service chains, in that they’re one of the most mature in their capabilities for off-premise service. Several pizza chains in the U.S. are experiencing heightening demand for takeout. Papa John’s saw sales spike 28 percent in the second quarter compared to the year before, however, this isn’t the case across the board. Most quick-serves need to double down on their online channels to make life easier for the safety-conscious customer.

No longer can brands bank on, “build it and they will come.” Most top restaurants already have native mobile apps, but are now rethinking how they can innovate to reduce the amount of time and effort it takes to complete orders. It’s therefore valuable to optimize the basics, perhaps something as small as a store lookup feature on an app, and iterate quickly cater to heightening demand for the highest ROI.

This same principal applies to your crew. Don’t neglect investing in technology solutions that enable your employees to do more with less labor expense. Key examples of this would include next gen KDS, technology enabled drive thru and better PODS for peak-time ordering.

2. Learn about cross-industry digital engagement

The top of brands’ strategic priorities should read: drive engagement and repeat purchase, regardless of channel. Industries that have experienced greater digital transformation have important lessons to teach restaurateurs. To drive growth, and push for higher average order value, restaurants should focus on developing more personal, memorable connections with customers in the virtual era. Domino’s was an early innovator with their Pizza Tracker, allowing customers to seamlessly track orders from oven to home and simplifying the barriers to ordering takeout (even though there is widely speculated that the data model is based off of averages versus actual data on-prem data.

Looking to find ways to add value between orders, Starbucks uses machine learning technology to make tailor-made order suggestions from the app, based on popular selections, weather, and even time of day. These brands are innovating to ensure customers receive the closest level of care and personalization that they would receive in-store.

Last year’s launch of Apple App Clips is revolutionizing contactless ordering. These are small parts of an overall app experience, designed to be discovered the moment an app is needed without requiring a full download. A drive thru can now set up bar codes in the parking lot, where customers can park, scan to order and pay and receive their takeout at their car. Frito Lay is even placing QR codes on coloring books in snack boxes to encourage the next order.

3. Introduce a customer to your brand via web, then push them to app

A recent study revealed 21 percent of consumers prefer ordering directly from a restaurant online, presenting quick-service restaurants an opportunity to use web as an on-ramp into their mobile ecosystem and resurrect users. With an effective website, brands can get users to the value (purchase) faster, but with mobile, they can drive higher, longer-term relationships. There’s a trade off with both—cue the need to synergise the two. When seamlessly integrated, web and apps can become a synchronous tool to capturing a wider audience and drive different types of engagement. Chick-fil-A has mastered this robust app and site ordering ecosystem to capture a new set of virtual customers, having recently expanded online ordering to include individual orders on its website from its entire menu.

The future of fast-food service

With no promise of where, when, and how customers will choose to dine post-pandemic, quick-service restaurants are pivoting away from short-term sales generation to scalability and engagement in the long-term. Being in the transaction game, restaurants need to allow engagement to steer their digital roadmap, and rethink how they can bolster the basics within the end-to-end customer journey. The key is building a harmonious order experience from the moment they open your app or website to order through to their pickup experience. The more you can make customers feel they are special customers, the easier it is for them to want to come back time and time again.

This article was originally published on QSRMagazine.com

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