According to a new survey by the National Restaurant Association, restaurant operators don’t think the future looks very bright. Nearly all of the operators surveyed think rising food and labor costs pose significant challenges heading into 2023, and half expect to be less profitable in 2023.
This year will undoubtedly be difficult, but uncertainty provides an opportunity for restaurants to identify inefficiencies in their business models and establish long-term solutions for sustained growth. With a strong, data-driven foundation and a robust omni-channel strategy, restaurants can increase profits while navigating labor shortages and rising food costs. Here are four ways to prepare:
Spread the Word
With so many dining options available to customers, what is the best way to reach them and share that you’re open and ready for business? Mobile apps are one of the most efficient ways to reach customers and influence their buying decisions in a post-pandemic world. A recent HungerRush study found that digital visibility is a significant factor in driving new customer visits with 85 percent saying they’re more likely to visit a restaurant after reading reviews and other online information.
Providing Personalized, Profitable Promotions
Providing personalized promotions shows a business’s dedication to giving customers value when they need it most. With so many dining options, customers need a reason to pick one restaurant over another. And targeting restaurant-goers with personalized incentives (that are profitable for the business) can tip those scales, especially as consumers get more cost-conscious due to the current economic downturn.
Prioritize First-Party Data
Using data to learn about customers is the only way to personalize customer experiences and change their behavior. In the past, businesses have done this with third party data. In fact my own company’s research has shown that more than 40 percent of restaurant operators use third-party data to guide their marketing plans, but new privacy laws will begin to significantly limit this type of data use. Looking ahead, first-party data – the data restaurants already own – will only become more important to increase profits, and restaurants will need to invest in tools such as Google’s Privacy Sandbox and other platforms with built-in data collection capabilities to maintain customer retention and drive business growth.
Join a Digital Marketplace
A restaurant’s physical location can create a point of friction for consumers that prevents them from choosing one restaurant over another. Ninety-four percent of consumers are more likely to eat somewhere closer to their home than somewhere farther away. Some restaurants solve this location dilemma with delivery services, but that can be expensive for businesses and customers.
Restaurants that participate in marketplaces make the in-store experience valuable enough to overcome any location issues. With inflation impacting consumer decision-making, it’s not a surprise that 89 percent of consumers will consider promotions or specials when deciding where to eat. And when marketplace offers a variety of the everyday categories they need – like restaurants, grocery stores and gas stations – it gives users more reason to use the marketplace and come across your restaurant when they’re going about their everyday shopping.
Times of economic volatility are difficult for everyone. But restaurants can use this time as an opportunity to double down on the efficiency, personalization, and tech resources that will enable them to build stronger businesses and come out these economically challenging times better than ever.