The restaurant industry is poised to make a comeback, but not without new challenges. As the nation slowly recovers from the recession, consumers are eager to dine out more—yet at the same time their needs are changing.
Not only are diners value-driven, their attention is divided as they look for information on the go and from their social networks. A daily special mentioned on Twitter or the discovery of a new neighborhood cafe via a mobile app can be as influential in the decision-making process as a television commercial or newspaper ad used to be. As a result, restaurant operators know they must have a presence on multiple social media sites and reach people through their phones. All restaurants—from quick-service to fine dining—share the same goal: to increase sales. But some are hesitant to dive into strategies with unproven ROI. The National Restaurant Association projects $604 billion in sales for the nation’s 960,000 restaurants in 2011, the first time in three years that operators will experience growth. And 55% of restaurant operators anticipate higher sales over the first half of 2011 compared with the first six months of 2010, the highest figure in over four years. According to Nation’s Restaurant News, 2011 will also be the year when social media campaigns make up a majority of marketing plans. Businesses that engage, provide value and reach potential diners where they spend their time—whether in a car or connecting with friends online—will be at a distinct advantage.
Social media has leveled the playing field for restaurants.
A small independent restaurant with a tiny marketing budget has the same tools at its disposal as a chain. What is important is how it employs those tools and devotes resources. The most successful businesses know that amassing fans isn’t the endgame, but rather just the start of how they engage with their audience. A mom-and-pop sandwich shop with a passionate local following can use Facebook in the same ways as SUBWAY. The food truck trend, started by small mobile vendors, is now being adopted by national chains like Sizzler. This trend would not have been possible without services like Twitter to broadcast hourly locations and stay in touch with diners, despite the lack of a brick-and-mortar restaurant
Use of social and mobile is steadily increasing, so restaurants that do not engage in these channels might miss out. our forecasts show that by 2013, 51.4% of the US population and 67% of internet users will be social network users. US smartphone users grew nearly 49% in 2010, to 60.2 million, and by 2015, 43% of all US mobile users will have a smartphone. Having a presence in these channels will be as expected as a webpage is now.
Location-based marketing is well-suited for the restaurant industry. While the number of location-sharing service users is still small—4% of online adults, according to a November 2010 study by the Pew Internet & American Life Project—this figure is double for those ages 18 to 29. Usage is expected to grow along with smartphone adoption and as services like foursquare and Facebook Places move into the mainstream. Compared to other categories, dining is a particularly social activity. A user’s online network may not care about check-ins to the dentist or a drugstore, but mentions of a restaurant or bar can be a solid word-of-mouth endorsement— and can entice others to join in on the spot. In February 2010, Milwaukee burger joint AJ Bombers famously attracted 161 foursquare users at once after the owner promoted the Swarm badge, awarded when 50 or more foursquare users checked in to the same venue.
Different segments have unique needs, but can rely on similar marketing tactics. The faster the interaction, the more utilitarian the diner’s needs generally are. A customer at a quick-service restaurant like McDonald’s may only be interested in getting a deal while a fast-casual restaurant like Chipotle Mexican Grill has brand evangelists who view eating there as a lifestyle. Casual diners visiting restaurants that require more of a time and money investment, such as Olive Garden, look for value and need occasions to visit. Fine dining is more about the experience, engagement and reaching influencers. But whether a diner orders from a counter or a linen-covered table, the goal is the same: to increase sales. All levels of dining can benefit from social media and mobile marketing. Conveying value will continue to be important. Diners may be opening up their wallets more than in the recent past, but not everyone is ready to splurge. Consumers have grown accustomed to Groupon-like discounts in all aspects of their lives, from home furnishing to vacation packages. One of the leading reasons people follow a brand on Twitter, “like” one on Facebook or download a branded app is to receive deals. Price still matters, though providing value does not have to mean profit-eroding promotions. A 2010 NPD Group survey found that consumers described value in many ways, including service, quality, convenience and atmosphere.