MRM EXCLUSIVE: Pandemic Shaping Omni-Channel Strategies in Restaurant Marketing
3 Min Read By Matt Drewes
The Coronavirus has rocked the restaurant industry.
The onset of the virus followed by restrictions and closures has caused restaurants of all sizes to rapidly evaluate their offerings and redesign their services to meet the needs of their customers. Restaurants that are positioned well are those who recognize that the future is omni-channel, take the time to know their customers, and leverage technology and data.
What consumers want – quality, convenience, and value – hasn’t changed, but the way restaurants deliver this experience has.
The term omni-channel has long been used in the retail space to describe the varied range of options given to consumers to collect their purchases (in-store, online, drive-up, app), but restaurants have typically only needed to engage with customers on one or two channels – dine-in and carry-out – to prosper. That is, until coronavirus hit. With safety and convenience at a premium, today’s customers expect to be able to order and pay for food from an app, have it delivered, see a menu and order online, pick up with no contact, and dine in.
Many restaurants have quickly invested in technology to help build the omni-experience. From apps that enable you to order and pay from your phone for a contactless experience, to deploying third-party delivery, restaurants have an opportunity to attract and retain customers by expanding ordering and service options. This is crucial as Cardlytics found that total online restaurant spending has been trending up 97 percent year-over-year (YOY) since mid-April through our view of half of all U.S. card swipes.
With the expectation for an omni-experience set in stone, restaurants must also understand their customers better than ever. Personalized, relevant marketing is key to achieving this goal. This is particularly true with so many diners diverging from their typical meal behavior. For example, a national chain promoting dine-in services to COVID-restricted markets will yield little from their efforts. Similarly, serving a delivery ad to someone who has never used delivery likely won’t generate a response, and serving one to a high-frequency delivery user won’t have a much higher success rate.
With the expectation for an omni-experience set in stone, restaurants must also understand their customers better than ever.
Restaurants need to pursue the current purchase behavior in the marketplace. Now is the time to retain customers by catering to their personal preferences and using their purchase history to anticipate how they’ll spend in the future.
Understanding your restaurant’s opportunity is also critical when considering how to market, and having the right data is an essential part of identifying where there is room to grow. For example, spend in third-party restaurant delivery reached an astounding 142 percent YOY growth the week of June 25 and has been consistently growing at a rate of more than 100 percent YOY each week since mid-April, according to Cardlytics’ insights. The question still remains as to whether this lift is sustainable. And if so, should restaurants continue investing in newly acquired customers beyond the pandemic?
The data says, yes. Cardlytics can see a wide range of valuable purchase insights through our advertising platform, which is built in banks’ digital channels. Our data shows that even as on-premise dining had a resurgence in mid-April in regions where infection rates were on the decline, online purchases remained constant. For instance, consumer spending at physical restaurants increased nearly 30 points between mid-April and mid-June (from -55 percent to -25 percent YOY), but online spend maintained increases of 97 percent and 107 percent YOY during the same time period, demonstrating that there’s enough consumer demand to maintain both dining choices.
Personalized, relevant marketing is key to achieving this goal.
But is this being propped up with new customers, larger check sizes, or more frequent purchases? Turns out, there is growth in all three categories, according to our data, which means restaurants should focus their marketing on acquiring new customers, enticing diners to spend more per occasion, and retaining customers to build frequency and loyalty.
The bottom line is: What consumers want – quality, convenience, and value – hasn’t changed, but the way restaurants deliver this experience has. Now, technology is enabling purchase behaviors. The good news is, more and more customers are using technology as part of their restaurant experience, and it’s sticking. Add a renewed industry focus on personalization and convenience, and the future is bright for consumers and restaurants alike.