As the COVID-19 pandemic continues to throw curve balls, the restaurant industry is being knocked down just as it was beginning to recover. In particular, supply chain disruptions and staff shortages – whether due to resignations or illnesses – are forcing quick-service and quick-service restaurants to adapt quickly to changing conditions.
I think we’re going to see several related practices prevail as restaurant brands look for innovative ways to not just survive, but also thrive.
Increased focus on online ordering
Rising cost of goods due to supply chain issues and economic inflation is driving brands to look for other ways to increase their margins. At the same time, labor shortages mean associates need to focus on high value-added activities. This combination of pressures is driving brands to double down on their digital orders, effectively reducing the labor cost of this process.
In addition to cost savings, there is ample evidence that consumers prefer online ordering and will choose catering brands based on the ease of this experience. While the top three third-party delivery services dominate the food delivery market, 70% of consumers prefer ordering from a restaurant’s website or mobile app, and 52% of U.S. diners trust these sites more Web and applications than to other portals.
More industry consolidation and the “split belly”
The cost crisis and labor shortage are also contributing to increased consolidation in the restaurant industry. As brands struggled to survive at the start of the pandemic, the acquisition market was ripe for bargain hunters. Today, savvy buyers realize they can leverage supplies and labor from a diverse portfolio of brands to achieve greater efficiency and economies of scale.
At the same time, consolidation is causing marketers of fast-casual food brands to think more broadly about their consumers. The former competitors are now part of the same umbrella company. Marketers who once focused on driving a consumer to a single brand of burgers, for example, now see greater opportunities to capitalize on a “split stomach” across multiple brands and cuisines. It’s a very different strategy that puts aside old rivalries and focuses on how to engage consumers with a larger family of brands.
“Ghost cooking” is another strategy adopted by consolidated, non-competitive brand families. Without the financial burden of a customer-facing presence or front desk staff, these operations can concentrate labor and supplies in one location for multi-cuisine food preparation and delivery.
Calling mobile gamers
According to some estimates, the mobile gaming market is expected to reach a market size of US$420 billion by 2026, representing a valuable co-marketing audience for QSRs. Among mobile gamers, more than a third (35%) eat fast food at least once a week, and almost a quarter (22%) eat it more frequently.
Using affinity marketing, brands partner with non-competitors to capitalize on their consumers’ interests in sporting events, concerts, and now, gaming platforms. These co-marketing initiatives could tie in-game achievements to QSR brand offers and rewards, such as buying points or other loyalty incentives.
Marks also dip their toes into the metaverse. Likewise, it’s an opportunity for QSR brands to not only drive sales, but also collect user data by delivering compelling experiences as gamers gravitate towards virtual worlds. As an example, Chipotle has brought its entire “Boorito” Halloween experience into the Roblox environment. Roblox users who interacted with the Chipotle virtual location and performed certain activities received promo codes that they could redeem for free entries using the Chipotle online app.
While people obviously can’t eat digitally, consumer engagement channels are growing. Forward-thinking brands will create interactive experiences in the new virtual worlds, such as allowing groups of friends to meet virtually and share a meal delivered by a ghost kitchen. Food can be integrated with other virtual experiences and combined with promotions and loyalty programs to drive sales and data collection.
The social and cultural shifts precipitated or accelerated by the pandemic are forcing restaurant marketers to try new strategies and broaden their thinking about customer relationships. Brand consolidation, labor shortages and supply chain disruptions are driving fast-casual restaurants to expand online ordering and maximize their resources. With 2022 now underway, I expect to see more exciting ways for brands to try to differentiate themselves by trying to deliver greater value, build loyalty, and invest in technology to improve customer loyalty. client experience.
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