By Hope Neiman/Tillster CMO
Digital sales are expected to increase by more than 9 percent in the next five years according to a Forrester report. Driving the upward trajectory are consumer preferences for on-demand, mobile and self-service technology.
Last year, 244 million Americans browsed or completed transactions through digital platforms, proving that the digital world is not merely the playground of younger generations — there is buy-in from all age groups.
Despite the ubiquitous consumer demand for convenient and time-saving online tools, not all categories are maximizing the potential of digital solutions to increase their bottom lines.
In the restaurant industry, after years of trailing faster traditional retail, brands are accelerating the adaptation of innovative technologies to operate more effectively, generate new revenue and enhance the experiences of their guests. This shift presents restaurants with exciting opportunities to grow their businesses, but also foreseeable challenges that they must overcome to optimize profitability.
Following are six hacks learned from ecommerce and customized and validated across digitally leading restaurant brands.
1. Offer optimal digital experiences:
Since the advent of mainstream mobile technology, brands have been experimenting with ways to optimize consumer engagement through portable devices. The result has been a staggering increase in the total digital usage by consumers. The 2015 U.S. Mobile App Report by comScore found that mobile apps are responsible for 90 percent of online engagement growth.
High mobile engagement provides brands with access to a high volume of consumer data to further optimize the user experience. This means borrowing from ecommerce retailers' playbook by routinely testing digital tools and making timely adjustments that go unnoticed to the user.
Recently, Tillster ran a test with a large QSR client. We have spent the last year optimizing and testing delivery times, cadence and content in order to increase open rates for email, now running north of 30 percent. In our last quarter, guests who opened an email converted at twice the rate of others, with no decrease in average check, whether a coupon was used or not. Understanding what matters and making it personal has resulted in engaged users who are voting with their wallet.
2. Prepare for holistic operational change:
The introduction of new digital tools means new revenue streams are opened, but can often lead to unexpected changes.
Take, for example, the use of kiosks. A May 2016 fast food consumer survey conducted by Tillster revealed that only 36 percent of guests would wait in a line longer than five people, highlighting the value and need of kiosks in the sector, but also prompting operational changes once the new machines are implemented.
For instance, seeing jalapeños and sour cream as an add-on option may result in higher demand for these items, but if unprepared, will lead to an out-of-stock situation in a matter of a day, rather than a month. In addition, the speed-of-service improvements from a kiosk may result in orders hitting the KDS faster, but this will change where the bottleneck in the flow might occur. Be prepared for change and work with operational experts to be prepared for the new normal.
3. Anticipate changes in the digital landscape:
Digital solutions offer restaurant brands access to and ownership of data to guide marketing, operational and business decisions. For restaurants, there is so much work to be done beyond simply pushing out an app. Restaurants need to pay close attention to what their consumers care about the most and find actionable areas to improve service, both broadly and to individuals.
This is because technology functions much like restaurant menus. Menus entice guests with their favorite servings while invoking excitement and inspiration for them to explore new cravings, which lead to higher margins. With digital tools, you can not only inspire them, but can direct them to high-margin items similar to those they've previously indicated they like.
4. Spend on promoting new technological solutions:
While today's digital tools are cutting wait times and reallocating how employees spend their working hours, restaurants need to take proactive measures to prioritize the promotion of their digital engagement solutions so that consumers actually take advantage of them because this is not a case of "if you build it, they will come."
As a starting point, restaurant brands need to identify which marketing and promotional initiatives provide the most highly desired outcomes– such as overall sales or increased visits from semi-frequent customers. Then, narrow in on those that will improve their key KPIs and the objectives of their brand. Technology can be used to improve many things from guest satisfaction and visit frequency, to guest loyalty and higher AUV. The trick is to select the technology that best optimizes the most important goal and build from there.
5. Value convenience over fast money:
Discounts motivate consumers to make immediate purchases. But in the end, a hassle-free experience that saves them time is far stickier. Restaurants that offer a single-interface digital ordering platform, where the guest and their preferences are easily recognized, are more likely to gain loyal guests and increased orders than those who solely depend on promotions. Data shows consumers value the quality of experiences more than discounts.
6. Keep consumers engaged:
It would be a mistake to sacrifice the success of a digital technology solution by focusing on the "high" costs of acquiring new guests. The real challenge lies in how to keep their attention over time. For this reason, keeping a close eye on engagement points is imperative.
Amazon, for instance, has changed its consumer digital interface hundreds of times without upsetting its consumers. By making adjustments to areas of opportunity, restaurant brands can also make interface changes that will send signals to their consumers that they value their business and understand what they want.
Tillster Chief Marketing Officer Hope Neiman leads the company's marketing efforts and execution of its initiatives.