How can restaurant operators manage a world of 'big data?'
"Big data" could easily be a candidate for term of the year, particularly for entrepreneurs.
The use of big data to drive customer behavior has been implemented by more and more restaurants hoping to increase loyalty and retention. A good example is Dunkin' Brands, which uses its newly standardized POS system to measure sales by store, sales by SKU, sales by hours, etc.
"We know what the sales are of all the product categories. This enables us to geotarget offers — so in the Northeast, for example, where there are strong beverage sales, we can build ticket by offering deals on bakery sandwiches," said John Costello, president, Global Marketing and Innovation. Such data is expected to help the company develop geo-targeted offers to customers by next year.
Pulling this information to develop a strong CRM platform is the future of the fast-paced QSR industry, according to Dunkin' CEO Nigel Travis.
"We've all just scratched the surface. The more data we can get, the more we can drive guests into our stores," he said.
POS trends reflect the need for data
POS systems used to be focused on facilitating a secure transaction. Now, they're about recording data to woo loyal customers through rewards, promotions, online ordering and mobile compatibility. The "future-proofed" POS market was well-represented during this year's National Restaurant Show, with 67 companies identifying as a provider. Sixty-four were in attendance last year, and just 51 in 2011.
"Loyalty is huge; operators want their loyalty program integrated with their POS system. This allows them to track customers' purchases and have their contact information to personalize promotions, which brings them back for more business," said John Mills, from Granbury POS.
Amber Crain, from Revention, added that operators this year are more curious about mobile and tablet applications in relation to POS systems. Also, online ordering is "exploding" across the industry.
"People are starting to realize that if you have a poor POS system, it's going to cost you money. You have to be where your customers are and know what they want and what they're doing," Crain said.
Boston's Pizza implemented an updated POS system a few years ago, in tandem with Black Box (business) Intelligence. This technology allowed the company to mine data down to individual stores and push that information back to franchisees to help them control everything below the sales line, such as labor scheduling and food costs. This system, according to Mike Best, chief operating officer, helped Boston's make its way through the tough recession years.
In addition to POS and BI platforms, other data-producing technology is starting to present itself. Surveillance, for example, is growing in the restaurant space, and not just for security reasons.
"(Panasonic's) surveillance system ties into POS systems, which ties it into transactions. So it can flag if something went wrong. But it also has facial recognition and the options with that are endless," said Stacy Moore, senior marketing specialist at Panasonic. "For example, it is sophisticated enough to spot if there is a male or female standing in line and you can then create a promotion according to that information."
Although big data has been credited with recession survival and personable marketing capabilities, challenges remain, including what to do with all of that detailed information.
"Big data is an 800-pound gorilla. We (Arby's) are now building an enterprise system to pull all of our information together, but then we have to figure out what's actionable," said Scott Boatwright, senior vice president of Operations at Arby's. "I'm a little fearful of who's going to do this work once the data is pulled."
Also, no matter how sophisticated, technology will never replace human nature.
"If that touchpoint at your restaurant isn't successful because of bad customer service, the wrong food or lack of speed, then all the data in the world won't matter," Boatwright said.
Chris Rodrigue, CEO of Taste Buds Management, adds that these systems provide many benefits, but they will never replace culture and training.
"Technology products give you data to make good decisions, but it will not replace the human brain," he said. "Technology can't predict that bus of 60 people that just pulled up. You have to develop a culture where you trust people to know how to use the technology but still know what's going on around them."
Photo provided by Wikimedia.
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Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.