With daily life, the economy and the restaurant industry all upended by the coronavirus pandemic, it would seem that when it comes to value, cost would be king. But new data from market research firm The NPD Group reveals that consumers’ definition of value during COVID isn’t all about price.
“It’s less about the deal, the price, and more about the food attributes,” said David Portalatin, NPD’s national food and beverage analyst.
According to NPD, overall deals declined 15% during the height of the COVID-19 shelter-at-home and dine-in restrictions (March through May), although two deal types increased volumes compared to last year: Buy One Get One (BOGOs) and digital coupons.
While the growth in consumers taking advantage of BOGOs and digital discounts indicates price is an important consideration, food quality, variety and “treating myself” were also drivers of consumers’ decisions, NPD found.
“Ultimately, what drives value has not changed,” said Portalatin. “[It’s] a reflection of people wanting to get more value.”
Many consumers are finding that value in the experience of ordering from a restaurant, NPD found. For example, during COVID consumers are reporting a better overall experience with restaurants than a year ago, including higher levels of satisfaction with delivery speed, food, and price.
Additionally, restaurant operators are reporting increased dollars per transaction as consumers are spending more on family bundles and higher priced entrées in search of convenient yet affordable meals, NPD found.
“This is where restaurant operators get to do what they do best,” said Portalatin. “[They] get to focus on cuisine, the experience.”
In order to meet the new needs of consumers, NPD encourages operators to “emphasize the quality, customization, and flavor of foods,” and to find more ways to translate those features to digital channels.
Portalatin added that going forward operators’ ability to create value on digital is going to be more important.
Several chains that have long been dependent on quality rather than discounts have amped up their efforts to translate their value to digital channels during COVID. Executives at Greenwood Village, Colo.-based Red Robin Gourmet Burgers and Brews and San Diego-based The Crack Shack shared how their brands have been successful at delivering value and better experiences with digital improvements.
Red Robin keeps brand promise
While many brands have shifted to heavy dealing during COVID, Red Robin has doubled down on its brand promise, investing in technologies to improve the guest experience.
“The keys to success have remained the same; the level of importance has been raised significantly,” said Jonathan Muhtar, Red Robin’s executive vice president and chief concept officer.
Among the recent investments made are upgrades to the casual-dining chain’s digital ordering platform and voice technologies to optimize speed of service and improve accuracy of online and phone order promise times.
“Our off-premise satisfaction scores jumped to the highest level ever even after reopening on-premise,” said Muhtar. “These investments we made are paying off.”
In the burger chain’s Sept. 10 business update, Paul J.B. Murphy III, Red Robin’s president and chief executive officer, called out improving comparable sales over the previous few weeks, strong off-premise sales and continued record guest satisfaction scores.
Red Robin has been discounting less year-over-year as a percentage of sales, Muhtar said, and it is being more targeted about the deals it does offer. For example, to convert existing dine-in customers to off-premise, the chain offered free delivery, and to entice off-premise customers to visit, the chain offered 99-cent beverages for a limited time.
“We are seeing that all aspects of the guest experience are defining value for guests,” said Muhtar. “We’re staying focused on enhanced experiences.”
The Crack Shack flocks to keywords
Similarly, when COVID restrictions led The Crack Shack to takeout and delivery, the fast-casual chicken chain took the opportunity to make its online ordering platform more user friendly, and to add menu keywords to indicate ingredient quality.
“If [the user interface] is sloppy or outdated you’re going to have a pre-conceived notion about the food you’re ordering,” said Nicole Rogers, director of marketing for The Crack Shack. “[When its good,] it sets up the notion that your food is good quality as well.”
Among the quality indicators added to the online menu are words such as “house-made” and “artisan.” The chain also chose to call out the specific brand of organic, free-range chicken it uses.
While some guests previously complained about the chain’s prices, which average around $15, those types of complaints noticeably declined after the keyword change, Rogers said.
Another way the fried-chicken concept is calling out quality is with monthly specials, such as the Fire Nugs, six chicken nuggets tossed in a sweet-and-spicy fire sauce and a side of house-made ranch sauce ($8.50) available during the month of August. For the month of September, the chain offered a hot honey combo, featuring two hot honey chicken sliders with bacon and pickle on a house-made mini biscuit served with schmaltz fries and a choice of sodas ($9).
“There definitely has been a shift in people’s mindsets in overall health and quality foods,” said Rogers. “[The Crack Shack is] at an extra advantage because we’ve been communicating quality from the beginning.”