“Love makes the world go ‘round”. Ever heard that one before? It certainly touches on a noble notion, and it has a lot of relevance to how many choose to live their lives; but it’s missing the tint of the reality and pragmatism that actually drives humans forward.
“Money makes the world go ‘round”. A rather cold take, and not one that many would like to think about on a day-to-day basis, but it has a caustic authority that can’t help but command attention. We all inhabit a global economy, and it is the resources we need, covet, and ultimately must share that secures our collective futures.
Is there a happy medium between these two world views? At The Wise Marketer, we believe there is: how about, for instance, “food makes the world go ‘round.”
People need to eat. As a basic building block for our continued survival, it’s one of the universal constants that ties us all together. According to the latest data available from the USDA, US households are spending a total over $1.4 trillion every year on food. But it’s no longer only sustenance and survival that’s at stake. Food – especially casual dining – is a critical component of the entertainment landscape across the US, offering people a momentary distraction from their problems and worries. Casual dining restaurants appeal inherently to many American tastes and sensibilities, and those that do not are rapidly trying to expand their offerings to tailor-fit multi-faceted demographic markets. The result? Eating out versus eating in is rapidly on the rise: just last year, dining out at establishments like restaurants and bars increased by more than 4%, surpassing the 3% year-over-year growth of grocery store sales. Moving away from a necessity-based ideological lens and examining the world of food trends with experiences, engagement, and brand equities in mind will provide the best shot for astute loyalty marketers to gouge out their niches and capitalize on the changing tides of customer dining. Here are some of the top casual dining trends we’ve identified that will continue to shape the world of food:
The healthy & the hectic food trends
Customer worlds today are fast-paced, action-packed, and always-on…and casual dining establishments have always had their finger on the pulse of this frenzied cadence. In fact, many of them were born out of the evolving needs of customers and the instant-gratification culture that has embroiled itself upon the nation. But as customer tastes continue to change, so too do the solutions necessary to maintain ongoing loyalty at quick service restaurants (QSRs). Looking at the data reveals some meaningful insights about the demographics actually patronizing QSRs. Bucking pre-conceived notions is evidence that the one third of U.S. adults who dine at QSRs on any given day are actually younger and wealthier than the average American. And with wealth, the tendency seems to revolve around health. While overall, Americans are eating healthier, higher-income customers are more focused on clean eating than their lower-income counterparts.
This confluence of dynamics has led to the rise of a new form of QSR offering: fast-food style establishments focused on featuring healthy menu items, natural ingredients, and fair prices with quick turn-around times. Niche, specialized brands are on the rise: Dig Inn, by Chloe, and Sweetgreen are focused on ingraining organic, locally sourced meal options that contain more vegetables and fewer calories than traditional burgers and fries. Even more generalized establishments like Panera Bread – targeting their audience with good food and a broad impression of quality and health achieved through their branding and menu options – are announcing new initiatives to expand their reach and number of locations.
But even traditional QSR’s and fast-food establishments are rushing to capitalize on the changing tides and evolving customer tastes. Plant-based meat offerings are growing at a tremendous pace, with chains like Burger King developing solutions for customers abstaining from traditional hamburger fare. Even more recent developments are demonstrating substantial industry traction – novel solutions such as plant-based eggs and yogurt saw significant market upticks, the latter realizing a 31% growth in recent months as traditional dairy yogurt sales declined.
In-Store technology meets sociology
The rise of technology and all the ways it shapes our world today has affected every aspect of the loyalty business. But in some ways, the leap to adopt technology has overtaken the actual impetus for its relevance – actually addressing and satisfying the needs of customers.
The coolest VR experience, the most experimental display visualizations, and the most innovative tech ideas aren’t worth anything…unless they actually resonate with the people that matter.
“AV technology is a component within the total solution, it is the medium for outreach,” opines Jasmin Stemmler, product marketing manager, NEC Display Solutions Europe GmbH.
“For the message to reach its target depends on the relevance of the message – ultimately determining the customers’ reaction and impact of the campaign. A successful campaign hinges on enticing and engaging with the audience.”
For brick-and-mortar dining, the concept is a salient one. Here are some of the top technology trends shaping the casual dining industry right now:
- Self-ordering kiosks
Research from Tillster shows that use of self-ordering kisosks is increasing 7% year-over-year. Further, more than 65% of customers said they would visit a restaurant more often if self-service kiosks were offered, and 30% of customers prefer to order from a kiosk versus a cashier if the lines were of equal length. Major QSR players have taken note of these trends and are swiftly developing solutions:
KFC plans to have kiosks in 5,000 restaurants around the world by 2020, and sister chain Taco Bell plans to have its entire domestic system outfitted with the technology by the end of this year. Burger King, Tim Hortons and Dunkin’ are also focusing on in-store technology, including kiosks.
- Facial-recognition technology
Facial recognition is an extremely personal touchpoint that is growing more popular in a wide variety of technologies and contexts. Smartphones and computers now heavily rely on facial recognition to secure devices, and consumer response has been rapt. According to research conducted by Visa, customers prefer facial recognition interactions, citing advantages such as not having to remember passwords (42%), enhanced security (34%), and reduced chance to forget or lose an authentication method (33%).
In casual dining contexts, facial recognition technology has been amplified, enhancing customer interactions and leveraging the power of technology in a “behind the scenes” fashion.
Burger Fi, a QSR focusing on fast-food fare, has installed touchscreen ordering kiosks with facial recognition capabilities at 22 of its 108 locations, and has found that facial recognition can help speed orders for customers who use the system.
To opt in, customers first agree to have their photo taken before placing their order at the kiosk. The system then prompts them to save their credit card, phone or facial recognition information, if the customer finds this acceptable.
When customers go and place future orders, the kiosk offers to retrieve the customer’s full order history, which allows the new order to be completed in as little as 10 seconds.
Eighty-percent of customers who agree to use facial recognition allow the company to save their information to speed up future orders, according to Lou Palermo, the company’s vice president of financial planning and operational support.
- Virtual Reality
Virtual & augmented reality has been slow to take off, because the actual technology to create realistic experiences is still viewed as being in its infancy. VR is perhaps at the extreme end of brick-and-mortar dining technology, requiring large capital investments, regular upkeep and IT management of complex systems, and posing difficulty when catering to high-volume establishments. But as the technology is refined, the usability and relevance factors for its justification become ever more potent:
Kentucky Fried Chicken is leveraging virtual reality not in its restaurants, but as a way to better on-board new employees and franchisees. Set up as a virtual escape room, their training simulation details the five steps of chicken-frying through mini games and surprises led by Colonel Sanders himself. For consumers pining for the Colonel’s chicken frying secrets, KFC made the educational (and entertaining) experience available for free download on Oculus Rift.
Bareburger, an NYC burger chain, has rolled out a new 3D augmented reality menu, in order to replace all printed menus. Consumers can visualize their burger in 3D and customize it before ordering. And in order to aid the socialization and virality of the technology, diners can leverage the Snapchat app to share their foodie creations with family and friends in real time.
Delivery envelopes the sharing economy
Restaurant delivery is nothing new. But the way it’s being undertaken in 2020 and beyond is drastically different than how the generations of the past acquired their meals. Gone are the days of phoning restaurants and placing orders manually. In today’s climate, the sharing economy has taken over.
The sharing economy allows any stakeholder with access to a resource to share that resource with others, linked together through a business application. Uber allows car owners to offer their vehicles to other passengers; Airbnb offers homeowners the chance to rent out their houses or apartments. And in the world of food and dining, a slew of businesses – such as Grubhub, Doordash, SkipTheDishes, and more – are offering just about anybody to share their time and make food deliveries to hungry customers.
Mostly executed through the implementation of mobile apps, these services allow customers to quickly and conveniently access food delivery from nearby restaurants. The apps maintain features such as sorting by preparation time, tastes and preferences, and most even offer their own loyalty schemes and points collection programs. Some of these services and apps bypass the delivery mechanic altogether: an up and coming app called “Ritual” simply lets patrons order their food and pick it up themselves at the restaurant, posing valuable rewards and the convenience of mobile ordering as key selling points for use.
All-in-all, these apps are wildly popular with customers, and their use is increasing rapidly. Pundits anticipate that by 2020, mobile and online food delivery services will reach a staggering market cap of $200 billion. But while all this business might seem healthy for restaurants, questions still remain as to whether extensive foray into the mobile ordering business is sustainable. Many restaurants have already seen a detrimental impact to their bottom lines: “We know for a fact that as delivery increases, our profitability decreases,” says Michelle Gauthier, owner of Mulberry & Vine. “I think it’s a far bigger problem than a lot of operators realize…I think we are losing money on delivery orders, or, best-case scenario, breaking even.”
Operator costs, fees, and capital investments all add up. Furthermore, many restaurants may overestimate the need for delivery, especially those that already perform well with dine-in options.
Implications For Loyalty
While food trends may come and go, the best practices have a tendency to stick around – especially those that affect the intrinsic nature of customer behaviors and tap into deep-seated psychologies. To implicate how the dining industry can take advantage of the ideas that matter and avoid any potential pitfalls, here are a few rules of the road to abide by when setting up any customer oriented strategy:
- Technology is not for technology’s sake. Any technological application – from being as simple as a mobile optimized website to as sophisticated as an augmented reality experience – needs to live at the heart of customers’ needs and wants, and not solely exist because it is novel or fashionable.
- Value is relative. Delivery apps have value because they respect customer’s time; healthy eating options have value because they can preserve your lifespan. But what if your customer enjoys spending time at your restaurant chain and doesn’t necessarily respond to speed and convenience? And what if your customer doesn’t dwell on their overall health (as many don’t)? Knowing your customer is fundamental in being able to tailor the value chain to their unique needs – a one size fits all approach will not work in the cutting edge of the QSR world.
- Is the strategy part of your story? At the end of the day, your brand is a promise to your customers. It is a story told through the culmination of all the touchpoints, all the messages, all the products, and all the services that people interact with day in and day out. Any change or trend adoption your brand makes will have a very material impact on that story – and because the brand equity lives within the minds of your customers, these impacts can often be subtle and difficult to notice. Before integrating that new technology, or building your menu into that new delivery app, ask yourself this: “Does this change help me better tell the story of my brand?” If the answer is anything but a firm “yes”, then it may not be the right decision for yourself and your customers.