Sponsored by in4mation insights
The past year has been an unprecedented time of challenges for the restaurant industry. Estimates for the number of restaurant locations that closed either temporarily or permanently, hovers around 110,000 nationwide. Securing labor for those brands and chains that have reopened for pick-up or on-premises consumption has proven challenging and accessing government relief funds has not gone smoothly even for those who qualify. In addition, anticipating traffic and unit volume based on historical levels remains uncertain as new Delta variant outbreaks are reported throughout the country, making guest behavior difficult to predict. Third party delivery services that were in-part a savior for some brands and owners during the worst of COVID, now threaten to subsume customer engagement. This presents risk of disintermediation with the restaurant brand itself, potential for erosion of customer satisfaction because of actions over which the brand has no control, and lost revenue.
But as Nation’s Restaurant News has reported, there are still bright spots as the industry re-emerges from the pandemic, fueled by an impressive array of innovations, ingenuity, creativity, new products, processes, and partnerships.
- New Menu Items: Chains are introducing new menu items, in some cases reflecting a shift to new day parts (brands known for lunch items eyeing breakfast as an occasion to encourage new or returning customers.)
- Ordering Apps: Brands are accelerating development of apps, as well as strategies for enticing consumers to download and use them through gamification, as well as clever co-branded offers (Dominos’ and DraftKings “delivery in two minutes curbside or your next order on the app is free!”)
- Loyalty Programs: Accelerated efforts to expand loyalty programs and capitalize on digital sales are proliferating across brands. In part defensive against third parties, but in part these initiatives also serve to engage consumers, drive sales and capture insights for future innovation. Loyalty is increasing its importance in the overall path to growth in this sector.
- Social Media: As the labor shortage tightens, brands are leveraging new media vehicles like TikTok for recruitment of younger employees through the TikTok Resume function (at the same time telegraphing that they are a hip and relevant brand for that age cohort to patronize)!
- Ghost Kitchens: It is early days yet, but major grocery retailers like Kroger’s are forging relationships with ghost kitchens to provide meals from known restaurant brands for pick up Kroger stores or curbside. In general, chains with underutilized kitchens due to reduction in on-premises dining are converting in the slow hours to fuel virtual brands providing delivery only or service to non-traditional locations.
The Delta variant promises twists and turns in the journey to a new normal for restaurants. One thing is certain however: The only way to reap the benefits from the investment and hard work put into these new programs, is if consumers know about them.
The messaging and creative execution of communications for these novel services, products, processes, and partnerships is key. But perhaps as important, in a highly fragmented media landscape, a marketing mix needs to work hard to ensure that consumers see and hear what you want them to, in locations where they can take advantage of these new differentiating offerings.
The discipline for determining the optimal media plan to drive marketing growth is referred to as Market Mix Modeling (MMM). Typically, MMM wasn’t sufficiently granular enough to be actionable, particularly if a brand’s needs were regional or even location specific. Additionally, MMM results weren’t delivered fast enough for brands to modify their strategy amid a longer-term campaign. Some models are opaque when it comes to analyzing the media that is potentially driving a particular day part or the optimal return on advertising spend at a local level. A brand might choose to invest in social advertising but depending on the Designated Market Area (DMA), Facebook might not deliver the same value as another social channel. Old predictive models based on behavioral variables upended by COVID aren’t reliable as a benchmark. With so little granular detail, too many restaurant brands at this critical juncture are forced to guess, rather than know, if their media plan will deliver against objectives.
Ultimately, the fundamental objective of marketing is growth . . . in sales and revenue. Likewise, the interstitial goals of the C-Suite may be to fuel a loyalty campaign, drive consumers to new delivery options or drive thru where it never existed before, or a new menu item, or generally to support brand equity. Consumers don’t buy products they don’t know about. Delivering messages where consumers can’t engage or leaving out media channels who could reach new consumer converts for your innovations isn’t a recipe for success.
At in4mation insights, we are helping some of the largest restaurant brands devise and optimize media plans to deliver actionable results along the entire marketing growth analytics spectrum.
Stuart Schwartz is Managing Director of Client Growth at in4mation insights. For over 25 years, he is proud to have created value for clients in media effectiveness and analytics.
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