Consumers like a limited-time offer: Whether it has to do with short attention spans or a desire for something new and different, there has been a 64 percent spike in LTOs in the past five years, according to Technomic. Their research also found that a majority of female consumers and millennials are drawn to innovative dishes, new flavors and menu launches when they choose a restaurant, and 30 percent of quick-service customers would visit a restaurant they wouldn’t normally visit if it meant taking advantage of a unique LTO. Restaurant Business advises operators to consider several factors when developing an LTO to attract guests. First, set a goal you’re hoping to achieve and design your LTO around it. (An LTO that will bring in guests for several weeks or months will need to have broader, more mainstream appeal than an LTO designed to generate a lot of buzz for a short time.) Second, consider your demographics and let your data guide your decisions. Preferences will vary across generations and genders, so consider everything from your LTO’s ingredients to its portability when anticipating how guests are likely to perceive your offer. Finally, use language that describes the sensory experience of eating what you’re selling (e.g. think “crunchy” vs. “breaded”) and promote the health-conscious aspects of your LTO. Words like “fresh,” “local” and “made from scratch” tend to score especially well with consumers.
Facial recognition technology has become a trend to watch in restaurants this year. While it may sound Orwellian, its potential for streamlining the payment process and loyalty programs is difficult for restaurants to ignore. A number of quick-service restaurants around the country have begun using biometric facial recognition to profile each customer’s order history, demographics and loyalty points. The technology appears to be best suited for the quick-service space at the moment but as rollouts occur across categories, note the effects (positive and negative) it has on customer experience.
What’s next in data and delivery? As usual, Domino’s is trying some ideas that could spark some new approaches for other brands looking to build business. Its latest promotion, Points for Pies, urges consumers to upload photos of pizzas of all kinds (not just from Domino’s) to the Domino’s app — that could include a competitor’s pizza, a homemade pizza or even a dog’s chew toy in the shape of a pizza. The brand then uses AI technology to identify those pizzas and award points to each person who posts an image. A person can win up to 10 points by posting one pizza each week and 60 points earns them a free medium-size, two-topping pizza from Domino’s. By making this game about the consumer and not directly about Domino’s — and showing a clear, achieveable path toward redeeming those points — the brand has made it more appealing for consumers to share data. Eater reports that this latest move is a creative plan to help Domino’s gather and dissect consumer data, then enhance their menu and service accordingly. The photos and data from Points for Pies will give Domino’s information about how often consumers think about, buy, make and eat pizza, what ingredients and combinations they crave, as well as what pizzas competitors are making. The results could impact how Domino’s makes pizzas or adjusts it menu, and how it manages its staff, store expansions and delivery strategy.
Need another reason to invest in technology? The fast-casual segment is poised for a tech-powered boom in the next five years. A Wired report says that in the wake of the rise of such tech-friendly, fast-casual industry darlings as Sweetgreen, venture capitalists have been pouring hundreds of millions of investment dollars into what they call “early-stage scalable restaurant concepts.” Technology is the common foundation of these concepts, with AI and data-mining apps making it possible for them to tweak menu offerings quickly based on customer diets and preferences, or even minimize waste by using machine learning to study historical purchases, weather, local events and even growing conditions on farms.
There’s a lot of room for cost savings in your inventory. Are you making the most of it? RestaurantOwner.com has some tips (and Team Four can help you incorporate systems to manage them if you need assistance). First off, make sure you have detailed specifications on every product you buy. They can be useful when comparing bids from suppliers and gaining a better understanding of where you might be able to get a less expensive product to deliver results similar to a more expensive one. Next, lower your inventory levels. If you’re like most operators, you have more food on your shelves than you actually need. It pays to assess your inventory by product, then reorder based on how much of that product you are likely to use, plus a bit added just in case. By cutting back on your excess inventory, you demonstrate to your team that portion control and precision are important. As a result, waste and spoilage should become less of a problem. Finally, list the 10 to 15 items that comprise the majority of your food cost and take a daily inventory of those items. At the start of each day, tally the opening quantity you have on hand for every product. Add any purchases you make that day, then at closing, count your ending inventory. Add your starting amount and purchases, then subtract your ending amount to get the amount of product that was used that day. Compare that figure with your POS product usage report. If your actual usage exceeds the usage tracked on your POS, you could have a problem with theft, over-portioning or another issue that needs adjustment right away.
Mining your data will take you far in predicting your sales and labor needs, but it may not cover all your bases. Factors that are a little less predictable — like a Nor’easter, for example — can catch you unprepared. In addition to monitoring the weather, Upserve advises you to keep tabs on a number of other factors that can send your business on a wild ride if you don’t prepare. At a time when delivery is on the rise, watch for promotions from third-party providers and prepare for a potential spike in delivery business when they offer discounts. Also keep an eye on local events that might bump up your foot traffic and bring in guests from out of town who wouldn’t normally be filling your dining area. Economic factors like fuel prices can have an impact, too, perhaps causing a dip in your dining room business if not business overall.
Having systems to collect and assess data are critical for large businesses — but the payoff is significant for small operations too. Wouldn’t it be helpful to know, for example, the exact price point that maximizes guest demand and profit for a popular product you sell? Or which promotions generate the most interest? In fact, a BARC research report found that businesses that harness data effectively saw their profits increase 8 percent and costs decline 10 percent. The systems can be just as helpful in predicting what’s ahead as assessing what you have already done — predicting that your past guests want to order burritos for takeout on Friday night and might be tempted to tack on some caramel flan if you suggest it. Or predicting where you should place a promotion on your website, based on how visitors navigate through your pages. Finally, in an age when information breaches no longer make front-page news and businesses are blamed less for experiencing a breach and more for how they manage the aftermath of one, having systems in place can help you pinpoint where and when problems happen in different areas of your business so you can respond and address red flags more promptly. If your data management practices need a boost, take stock of your needs. An Entrepreneur report advises you determine which five or six pieces of information are most critical to the success of your business. Choose technology that addresses those critical needs and determine whether the cost can save time and money, in addition to generating more revenue.
Consumer demand for transparency extends from the origins of the food you serve to the environmental friendliness of your packaging. To address the latter, many operators have embraced recycled packaging, but according to a Food Safety Magazine report, that isn’t without its own risks. The report indicated that recycled fiber may carry lacquers, printing ink and adhesives that may be harmful to humans if used in food packaging. While the FDA makes recommendations to manufacturers regarding the chemical contaminants found in recycled items used for food packaging, these guidelines aren’t legally enforced. While policy catches up, foodservice operators can simply be aware of the potential for contamination. If you use recycled packaging or are considering it, talk to your suppliers about how they manage these concerns.
As technology infuses so many parts of the restaurant industry — and as restaurant brands expand to additional locations — operators may wonder if the connection to consumers suffers in the process, or if the brand could become watered down when consistency-driven processes take over. Sweetgreen is one example of a brand that has kept its guest connections strong through its adoption of technology and physical expansion. Nathaniel Ru, the brand’s cofounder and chief brand officer, calls it delivering “intimacy at scale.” It’s about delivering healthy, real food at scale without losing a local, personal touch. For Ru, that has meant thinking creatively about the supply chain at times. As First Round Review reports, when a winter storm wiped out the peach crop in New England a few years ago, Sweetgreen (in the midst of summer menu planning at the time) had to adjust. Its popular goat-cheese-and-peach bowl was no longer a viable option, so the dish was reinvented in a way that both accounted for supply chain challenges and bonded with consumers. Sweetgreen substituted locally grown strawberries and blueberries for the peaches, changed the name of the dish to the Patriot Bowl and sold it in the northeast, where it quickly became a guest favorite. Ru advises other operators looking to deliver intimacy at scale to keep things simple, from limiting the number of core values to numbers of locations. When you’re ready to expand to a new location, don’t use the same playbook — study the demographics, buying patterns, traffic patterns and basic vibe of each community first. Next, be modular — expect change and build any new locations to account for future adjustments to menus, décor, ambiance and other factors. Finally, collaborate with people and companies that feel like a natural fit — from chefs to musicians to farms — and can help you retain and reinforce the character of a store.
Tap your financial data
Prepare to be shocked: The restaurant industry is known for its unusually thin profit margins (Toast suggests they range from 0 to 15 percent, with most restaurants falling between 3 and 5 percent). Okay, that probably sounds pretty familiar, but as with most other areas of your operation, your data can help you uncover surprising areas of waste and make best use of the profits you do have by tracking your profit and loss, as well as your projected and actual cash flow and cost. FSR Magazine advises collecting information on such costs as your rent and utilities, wages, revenues within a set time period, cost of raw materials, number of items sold and the average cost per item, total food cost, cash flow projections and profit. Reports from your POS can provide the most detailed information here, but also look to your credit card processor to identify trends, as well as records from third-party delivery providers.
As a guest enters your restaurant, you likely want him to focus more on your list of specials than on his likelihood of contracting salmonella from your establishment. But the safety of your restaurant could well be on the minds of your guests, particularly as 33 percent of foodborne illnesses in the U.S. in 2016 were attributed to sit-down dining establishments (and that figure did not include additional illnesses linked to quick-service restaurants or catering and banquet facilities). If you have taken steps to strengthen your restaurant’s food safety practices — and your record reflects it — have you thought about promoting it? Foodable advises it as a good way to earn trust with the public and engage your employees. If you get a glowing inspection report, blow it up and post it — or announce your result on Instagram and thank your team for helping you to achieve it and for sharing your commitment to guest safety. Post photos of your team sweeping up or polishing glassware after an event. If you’re giving your restaurant a deep clean on a day when you’re normally not open and would be cleaning anyway, announce it. There’s no need to overdo it on the dirty details, obviously, but the occasional post about your commitment to running a clean operation can go a long way in building trust with your community (and ironically, making food safety less front-of-mind when hungry people pay you a visit).
Mine your delivery data
If you’re among the many restaurants transitioning to delivery service, your POS can help you reap rewards from the data you collect from each order — but make sure you track your progress in a way that helps you respond to patterns as opposed to one-off customer complaints. For example, Modern Restaurant Management advises you to turn to your POS to assess your results as a whole: Do you have one delivery driver who is consistently late? A line worker who often misses including requested condiments in orders? Or do your soup containers leak, generating regular complaints from customers? Which items are your most profitable and which are rarely ordered at all? Reviewing your POS for patterns tied to your food, personnel, packaging and service can help you see where adjustments are needed.
If your guests are game to load funds onto a digital wallet or prepaid gift card in exchange for a special offer, you can help cut back on the fees you have to pay to support credit card transactions. While retailers are charged a fee by credit card companies each time a customer pays with a credit card, Skift Table reports that many of those retailers are bypassing the fees by joining the lower-cost Automated Clearing House network, which was set up decades ago by U.S. banks to facilitate the exchange of money between banks. Other companies, like Starbucks, are encouraging customers to load funds onto a prepaid gift card — a setup that means Starbucks only pays a swipe fee when a customer loads funds onto the cards, not each time she buys a latte. Still others are joining networks (LevelUp is one) that help businesses band together and use their combined scale to negotiate more
How well does your menu use vegetables as not just vegetables, but as ingredients that blend into the background — and in the process, make for a healthier dish? Cauliflower, for one, has surged in popularity in recent years, with sales of its products climbing 71 percent last year according to Nielsen data. (Having taken hold as a pizza crust ingredient and rice substitute, it is now moving into the snack category: Fast Company reports that a number of brands are releasing cauliflower-based snacks such as pickled cauliflower and cauliflower-powder based pretzels, crackers and chips.) But since cauliflower is expensive and difficult to mass-produce, there is room for other vegetables to take hold as undercover ingredients. This New Year, as people look to reset their health, where can you incorporate nutrient-dense vegetables in ways that allow them to disappear into the background?
Launching a loyalty app? Walk your talk.
Having a loyalty app is a great way to build a strong following — if you don’t look at it as a “set-it-and-forget-it” kind of tool. As Cake suggests, having a loyalty app can go far in helping you connect with your audience — especially Millennials and Gen Z, who are apt to spread the word about you on social media. But on the flip side, those guests also have high expectations of your transparency. If you’re targeting this population with your app, be willing to share details about how your food is made, where it comes from and how you manage your business (or at least be ready for questions about it). Having an app is a strong upselling tool, helping you to build check totals by suggesting menu items that may not have been front-of-mind for customers. Just be sure to focus on your guests’ preferences and frequency of visits, as visibly focusing on check tallies (and tying rewards to dollars spent) can be a turnoff. Finally, having a loyalty app can be a data goldmine — but you need to have the foundational technology in place to funnel that data into insights that feed your broader marketing strategy.
The better consumer data you have, the more you strengthen your capabilities to personalize service, forecast guest demand and labor needs, and ensure the accuracy of guest orders. But as you look to use data to provide superior service and make your guests’ experiences more customized, be careful to not step across the line into invading your guests’ privacy. Consumers know you want their data — and they may not be so comfortable about it — so be prepared to defend how you manage it. If any of your guests were to ask you about how you collect and use their personal information, could you respond to them in a way that demonstrates you’re being careful and thoughtful? The California Privacy Act of 2018, which goes into effect in 2020, is designed to serve as a bill of rights for consumers whose data have been collected by businesses. It will enable consumers to request an accounting of what personal information of theirs a business has collected, how the business gathered and is using that information, and who can access it. Consumers can have their data deleted upon request and can demand that a business not sell any of the information it has collected. While this particular legislation will apply to just California, note that it may serve as a blueprint for other states — and encourage consumers everywhere to take steps to protect their data. To pre-empt that, partner with your suppliers and other vendors to set standards for data protection and encourage collaboration now. For some help in assessing your needs and how to protect the data you collect, consult the National Restaurant Association’s two guides on cybersecurity and data protection, Cybersecurity 101 and Cybersecurity 201.
Know your beef supply chain
At a time when consumers are becoming more vigilant about the use of antibiotics in the meat they consume, industry watchdogs are ready to call out businesses that aren’t sufficiently vetting their suppliers. In a newly released report card that rates 25 burger chains for the degree of antibiotic use in their meat sources, all but three businesses received failing grades (and one of those three received a D-minus). Restaurant Business reports that the Chain Reaction report, which was authored by the U.S. Public Interest Group and co-authored by Consumers Union, the National Resources Defense Council and other public interest groups, found that most chains lack meaningful policies on antibiotic use in their beef supply chains. Shake Shack and Burger Fi came out on top, scoring A’s for sourcing beef without antibiotics. If guests asked you about your beef supply chain, what would you say?
Are you in food safety denial?
In the U.S. alone, foodborne illness causes 76,000 illnesses, 325,000 hospitalizations, and 5,000 deaths every year — and they’re all preventable. So why do they occur? According to food safety expert Francine Shaw, much of the problem comes down to denial. Some operators and employees deny there is a problem with the industry or that an operation’s safety protocols play a significant role in preventing it. Others can’t see beyond the up-front costs of technology and how it could offset the debilitating expense of a food safety crisis down the line. In her years in the industry, Shaw reports having seen widespread disregard for basic food safety protocols in restaurants, a desire by company leaders to have employees get just enough training to pass a test (without deeper thought about what it might mean to the consumer or the business), and an aversion to third-party inspections that could help a business commit to and sustain the kinds of practices that could prevent a foodborne illness outbreak. If any of this sounds familiar, Shaw says it’s important to revamp your corporate food safety culture, update your food safety plans and implement technology and other protective measures in your business. Technology can help simplify many processes, allowing you to deliver training, create a long-term record to back up your safety practices, and eliminate paper-and-pencil tracking systems that are easy to abuse and lose. There are now about twice as many food recalls as there were 10 years ago, and while many cite technology as the reason these problems can be identified quickly after the fact, technology could be used more readily to prevent them. But first, you need the food safety culture in place to reinforce your commitment to these changes.
How much is data worth to you?
Businesses of all sizes crave customer data, and restaurants are no exception. Eater reports that a new coffee shop in Providence, R.I. started an experiment whereby patrons (many of them college students) are given a free cup of coffee in exchange for providing details such as their name, birthday, phone number, email address, major and professional interests. While such data collection could be a dystopian sign of things to come, restaurant operators have an advantage in that a consumer sharing information is readily doing so in order to access promotions (unlike a person searching online for a clothing item and subsequently getting barraged with banner ads featuring that item). But as consumers guard their data more closely, make sure you are careful about how you and your vendors are using it — i.e. don’t surrender it to third-party delivery partners who might sell it to competitors — and make sure you have a technology crisis management plan in place so that if and when a breach occurs, you can demonstrate you have taken steps to protect your guests’ information.
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