The restaurant sector is booming, with more restaurants opening and fewer closing than ever before. Increased competition is pushing restaurants to differentiate. Many are investing in front-of-house technology to enhance the customer experience, with mobile taking centre stage.
Mobile payments in particular has long been touted as the next big thing for restaurant, given the mobile device has evolved into a natural extension of an individual over the past five decades.
However, restaurants have been slow to adopt the technology, despite the hype from the vendor community. Thriving market conditions post-recession have resulted in more restaurants experimenting with mobile. The arrival of Apple Pay has genuinely shifted the market.
Now almost every restaurant has a mobile strategy, and with good reason. According to research from Edelman Berland released last year, mobile payments have the potential to boost restaurant sector revenues by £5.6 billion and increase table turnover and sales by 14.1%.
However, the real value of mobile payments isn’t in the payment itself, but the intelligence that can be gleaned from the data.
Don’t forget about the data
While consumers are beginning to revel in the ability to use their mobile phone to enhance their dining experience, many restaurants often struggle to use the data that mobile applications generate in a meaningful way.
Historically, restaurant loyalty programmes have been pretty generic. They typically involve the mass issuance of coupons or other offers designed to entice customers to visit a restaurant during quiet times.
This tended to inspire mercenary behaviour, where consumers would simply take up a good deal, rather than loyal behaviour. Furthermore, traditional promotion-based marketing offers a percentage off a meal, severely impacted margins.
Mobile technology allows customers to check-in, pay securely, split the bill and leave without waiting for the waiter – as well as receive relevant offers and information – all from their smart device.
Yes, the experience is great for the customer, especially not having to wait around for the bill, which people typically detest. The real value, as ever, is in the data. For the first time, restaurants are truly able to understand customer behaviour.
Up until now, the relationship has been anonymous. A single customer could go into three different Prezzos in one day and the restaurant would have no idea that she is a loyal customer. Now restaurants have a way of identifying customers and their engagement.
An example of effective use is Thai restaurant chain Busaba Eathai’s mobile offering. The restaurant worked with MyCheck to develop an app with mobile payment and loyalty functionality. With visibility of customer transactions, preferences and return rates, Busaba was able to trial campaigns and track results.
It used gamification to provide customers with incentives, such as free beer and favourite dishes, based on an understanding of what food they liked. The loyalty programme also meant that it was easy for visitors to use and redeem these rewards and allowed staff to recognise loyal customers regardless of the venue that they visited.
The app now has 75,000 customers who use it to pay regularly and rewards continue to drive repeat users, with return visits as high as 68%.
The technology not only gets restaurants ‘closer’ to their customers, it can also speed up business processes, ensuring that restaurants can act on the information quickly.
The more mobile data evolves, the more added value it can bring to a restaurant. It can provide the means to analyse how a sales promotion affected a restaurant’s bottom line and how customers reacted to offers by corroborating social media posts for example.
The problem is that the majority of restaurants are focused on the front-of-house customer experience, not the loyalty and business benefits made possible by data.
The issue arises from the amount of data created by mobile technology. Restaurants are drowning in it rather than using the information to get closer to their customers and make smarter business decisions. Many are simply building up a repository of customer insight without fully appreciating its potential.
Mobile data not only needs to be embraced but also tailored to understand what each restaurant wants. If the data is not tailored to suit the restaurants, it can turn into a white wash of statistics and meaningless numbers. This in turn creates a negative impact to the user and detracts from the benefits.
Soon, mobile data will be the principal source of customer intelligence. The longer restaurants put off harnessing that data, or at the very least organising it, the bigger challenge it will become.
The advantage of integrating mobile data into restaurants’ regular business analytics is that it enables restaurants to eliminate the manual management tasks and opens up new points of intelligence.
By pooling and interrogating all the data – from the tills to labour costs to social media – restaurants can instantly understand the performance of their business.
Dashboards can provide an area manager or maître’d with timely and relevant information on a tablet or mobile device, allowing them to see which promotions are going well, if they have planned their staff rota in accordance with bookings and sales, or if they are over spending on stock.
For example, do customers only visit on a certain day of the week? Do they only visit when an offer is available? Are there always the same number of people in their party? Can they be moved to higher margin products using basket analysis? This intelligence allows for the creation of personalised engagement that will encourage greater repeat visits and an increased spend per head.
Restaurants need to become more sophisticated if they are going to thrive or simply survive. They have taken a major step by using mobile, but are in danger of only realising a fraction of its value if the data it generates isn’t made to work for the business.
Data hell is sitting on this abundance of information. Data heaven is turning insight into intelligence to steal a march on the competition.