Technology
3 ways tech is changing restaurant loyalty
Jessica Bryant, VP of marketing, NCR Commerce, said it's time for restaurants to own their digital channels, protect their profits and preserve the guest experience online using smarter technology.
August 1, 2023 by Jessica Bryant — Vice President and Restaurants Head of Operations, NCR Voyix
As cost-of-living increases and inflation rises, many consumers have become more selective about where they dine out. For restaurants hoping to thrive in the current economic environment, simply serving good food isn't enough. To entice customers to visit — and keep visiting — restaurants must put customer experience first. While immersive experiences are often associated with QSR brands, restaurants of any kind can use their creativity to earn a greater share of (consumers') stomachs and wallets.
Below are perspectives on the hospitality landscape today and trends to watch moving forward in 2023.
1. Shaping the future of restaurant loyalty programs with technology
While loyalty has been around since the humble stamp card, the restaurant industry has evolved substantially as technology has enabled greater innovation and higher engagement rates. These programs are one of the best ways to understand customers on an individual level and as an audience.
Loyal customers are critical to the success of any restaurant with repeat diners spending almost 70% more than new customers and 40% reporting they would spend more if they were loyalty members. Technology makes it easy to create and deliver these personalized experiences, enabling restaurants to:
- Increase average check size by recommending additional menu items using purchase history.
- Understand which guests need an incentive to return versus who will purchase at full price.
- Identify and target customers who will spend more at the restaurant.
With 80% of operators planning to increase investment in loyalty, operators must activate these programs with marketing campaigns. The first step is to unify customer experiential and transactional data to drive loyalty and revenue. Using an all-in-one system, restaurants can identify high-value customers, deliver timely, relevant offers and deprioritize spend on lower-interaction customers.
Lacking the marketing staff to support the loyalty program? Restaurants can work with their technology provider to augment staff and automate triggers, schedule campaigns and segment audiences. For a successful loyalty program, restaurant operators must strive to develop a system to continually educate customers about the rewards of loyalty that will motivate them to earn them. Achieving sustainable loyalty, measured in years, requires a strategic sustainable approach.
2. Enhance diners' journeys with omnichannel experiences
Today's successful omnichannel models offer diners the convenience to order wherever they are, whenever they feel like it. Diners no longer follow a fixed path to purchase. Rather, their journey might start with a click on a website and end with a pickup order. No matter the channel, they expect every order to be fulfilled in an efficient and timely fashion and their experience to be consistent. The most successful restaurants will be ones that seamlessly fuse physical and digital worlds to create enduring customer relationships.
Agile technology is key to supporting physical and digital diner interactions. Blended experiences aren't just on the horizon, they're already adopted by larger brands across all industries that understand the value this technology adds to the guest experience and their bottom line. Consider the last time walking into McDonald's; it might have been equipped with digital kiosks for self-service or staffed with employees to take diners' orders. Or, think about the Starbucks app, which empowers customers to order ahead, scan a gift card, use rewards or pay at the counter.
The National Restaurant Association reports that four in 10 restaurants plan to invest in back-office and front-of-house technology to increase productivity and enhance the diner experience. With a trustworthy, easy-to-use, end-to-end software system, restaurants can seamlessly blend physical and digital worlds by going contactless, adding a virtual brand, implementing mobile ordering or setting up a digital loyalty program.
Give the third-party marketplace the boot
The strength of the third-party marketplace lies in its ability to provide an omnichannel guest experience where customers can browse multiple menus and food options from a single, user-friendly platform. As a result, restaurants lacking better options have flocked to these services. However, third-party partners charge high commission fees, up to 30% per order, and offer little control over the process and guest experience. This leaves restaurants struggling to make a profit.
As Boxcar BBQ owner Phillip Foss wrote for Eater, "Let's say we come in at 20% occupancy costs. Throw in the 15% commission [for food delivery apps], plus 60% for labor and food, and that [means we only make] $1.50 on a $30 sale...While our barbecue is literally and figuratively putting food on the table for so many families, my own is left to survive on mere table scraps."
The right hospitality technology solution can help restaurants reclaim their independence — owning their brand, digital channels, data and guest experience. Restaurants of all sizes can create a consistent customer experience with custom branding for their online and mobile ordering platforms to make visits more memorable. Additionally, eateries can easily manage multiple order modes and menus for curbside pickup, in-house delivery and third-party delivery. Using this kind of delivery software solution provides detailed data and analytics on orders —even if the orders are fulfilled by third-party fleets, giving operators full visibility of the delivery process.
It's time for restaurants to own their digital channels, protect their profits and preserve the guest experience online using smarter technology and operating models to ease the indigestion owners and operators are experiencing with third-party partners.
About Jessica Bryant
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