- WHITE PAPERS
By Linda Duke, CEO, Duke Marketing LLC, and editor, Restaurant Marketing Magazine.
Ten restaurant marketing trends and tips for the New Year.
1. Quest for survival.
The great redwoods are hundreds of years old and without a devastating forest fire these trees cannot release their seeds and would never have new growth. The redwood fire is a perfect analogy for today's restaurant brands. The restaurant industry has been through a devastating forest fire all its own. There will be some restaurant brands that will never come back.
Case and point, how many restaurant chains have declared Chapter 11 and shuttered locations this year? There will be some new growth on the old trees, like the old restaurant brands reinventing themselves for today's consumer. We are seeing this with IHOP and Denny's creating new hybrid brands along with Red Robin, PF Chang's and others following suit. And there will be completely new growth that we have never seen before, just like some of the new restaurant brands that are popping up all over — particularly in the fast casual space. Which tree is your restaurant brand? Never to be seen again or reborn?
2. Reinventing your brand for today's consumer — the new consumer mindset.
The new economy is creating a new consumer paradigm. Consumers that were once wary and kept their wallets closed may have to keep them closed for another year. All economic indicators still show consumers are not spending as much as they used to, and restaurant operators have felt this cutback firsthand. Unfortunately only the strong will survive and today's restaurants are seeing a shake out of those brands that are weak and can't survive, and those that can reinvent themselves, still will be profitable, and will dominate.
In case you haven't noticed, there is a new consumer mindset. Spend less, save more, don't use credit and whatever you do, don't indulge. Maybe not every guest you serve, but consumers show no signs of opening their wallets anytime soon. Change is required. Those restaurant brands that realize that consumers have changed and understand what they can provide to those target groups of consumers will win! It is not going to get better for some time, so embracing change is the only option.
3. Negative feedback — from comment to crisis.
Every restaurant gets a bad review now and then. That is what we USED to think. Today, there are many places that consumers can complain about or praise a restaurant like Yelp, Trip Advisor and Patch.com, and there are dozens of comments, videos and photos posted online every day about businesses that can either help or hinder. Comments, photos, or videos can turn to crisis, as many saw firsthand from Domino's employee video debacle. That is why it is IMPERATIVE to have a crisis communication plan for 2012. Understanding the threats and having a plan to deal with them if they arise is better than waiting. It could be too late.
4. Social media showing promise. Interactive relationship management for 2012 and beyond.
Marketing professionals were beginning to utilize the new social media applications in 2011 and this trend will continue to increase in 2012. The usage of Twitter, Facebook and mobile ordering has been showing promise for numerous brands that have dedicated resources to keep content and communications fresh. Video content is on the rise for restaurant brands and this will also continue through 2012. The New Year will also bring greater focus to "interactive relationship management" for restaurant marketers. Creating engaging, informative, and clever communications for your guests and keeping them involved with your brand online and off, is what we call the "new enhanced loyalty strategy," a must for today's restaurant operators and marketers.
5. Foodservice at retail — blurring lines.
Walk into any 7-11 in Chicago, and the first thing you see is fresh fruit. No you aren't seeing things ... the retailer has integrated fresh fruit and grab-and-go food items and seen tremendous results. Target and Walmart continue to transform their locations to be more food-focused. Other mass retailers are also getting into the game.
Influence comes from any number of directions. There aren't hard lines between what is relevant to a marketer in one category versus another these days. Consumers tune in to what's relevant, and what's served up in a unique way, and tune out the rest. They don't 'consume' marketing by category.
Foodservice-at-retail brands are watching restaurants, are you watching them?
Catering is not a new revenue channel, but with today's new online social media applications, catering is a whole new ball game for restaurant marketers. Guests are now able to access their favorite restaurant in any city, and can place an order with a click of their cell phone. Today's savvy restaurant marketers are using online catering resources and some are creating custom catering platforms to capitalize on this lucrative market.
Within the next year, catering sales will become a greater focus for restaurant brands determined to get the most out of their operation and generate sales outside of the restaurant's four walls. The beauty of adding a greater sales focus on catering for many operators is it allows them to utilize their existing resources — food and staff — to make more money even if their dining room is not full.
Restaurant marketers should think of catering as another daypart entirely. Catering should have its own menu and training along with a catering marketing strategy, plan and target prospects. Those restaurants that incorporate these must-haves will win big.
7. Fast Casual is still the "sweet spot."
Last year we said the fast casual segment of the restaurant industry has changed the way people eat, and the same holds true today. These fast growing, revenue-positive brands are still the ones to watch. Chipotle and Panera brands both reported double-digit sales increases, and continue to dominate by offering today's consumers what they want.
Tomorrow's fast casual players are starting to look like two different groups, perhaps three. Those fast casual restaurants serving high quality and oftentimes four-star dining-style menu items or what we term: "Fine Fast Casual." Then there are those that are more on the side of quick-serve but enhanced menu items and décor make them more "Quick Fast Casual." Finally, we are also seeing "Chain Fast Casual Hybrids," IHOP and Denny's chains replicating their concepts to fit within the fast casual framework. We will see growth in all three of these areas in the next year, and marketers should watch these brands and their marketing efforts closely.
8. Marketing today is like the combo platter.
There are so many different ways to communicate to guests today it is like a combo platter of marketing. From the traditional mediums like newspaper, direct mail, radio and television to in-store marketing materials like table tents, posters and check presenters, to all the social media touch points — it's enough to make a person's head spin.
It won't be getting simpler anytime soon. The name of the game is to use a combination of communication vehicles to ultimately reach your end users. Integration of a message into all aspects that touch a consumer is how to make the biggest impact. The right mix of communication vehicles is unique to each brand and their specific target guest demographics. But one thing is for sure, a one-vehicle communication method is long gone — integrated marketing communications is here to stay. What does your communications combo platter look like for 2012?
9. Social Consciousness.
Ethical consumerism has become the phrase to describe Americans' penchant for shopping with a conscience. And it's no longer just about environmentally friendly materials, but now the consequences of manufacturing and consumption as well. Brands have responded by significantly stepping up the number of products taking an ethical stance, such as organic, hormone-free, ecofriendly, locally grown, cruelty-free and other "ethical" claims. So how do these impact restaurants?
To begin, they point to issues of biodegradability, recyclability, reusability, and even the reduction of packaging overall. Brands are now being held much more accountable for their environmental and social practices; if you're not tuned in to all these ethical demands, you're simply going to lose out.
"Enviro-biographies" are going to be attached to just about everything, letting consumers know the entire life story of a product: where the materials were harvested, where it was constructed, how far it traveled, and where it ended up after being thrown away or recycled.
10. CHANGE required! Bouncing back from the brink.
It's time for restaurant marketers to realize NOTHING is the same. Change is required! For many restaurant marketers, change is already underway. Marketers are struggling to keep their brands relevant for today's consumers and are using various methods to reach them. Getting one's share of the dining out dollar is the ultimate challenge. Restaurant brands are waking up and realizing the world has changed and that consumers have the ultimate upper hand. How will your restaurant brand survive? Can you bring a brand back from the brink? Only time will tell.
Duke is CEO of Duke Marketing LLC, a California-based full service marketing communications firm with expertise in integrated marketing communications for multilocation and franchise organizations. Over the past 23 years, she has consulted with the top restaurant brands in the United States and abroad, and is a nationally recognized speaker, educator and a published author.