The casual dining industry (high street restaurants and fast food) have experienced considerable challenges in recent times. From inflated ground rents to an increase in minimum wages, businesses are feeling the pressure from all directions. Huge staff layoffs and store closures have resulted, a famous example being Jamie’s Italian which fell into administration in May of this year.
According to Mintel research, the more accessible and affordable costs offered by street food vendors and pop-up food stalls – particularly in London – are taking market share and forcing mainstream casual dining restaurants to innovate at a faster pace. Despite these challenges, according to Statista and Euromonitor, the foodservice market in the UK is rising steadily with the market value due to increase to nearly €79 million by 2020. So how can brands make the most of this expanding market?
New channels are emerging that are helping to generate more sales and delivery companies, such as Deliveroo and Just Eat, have unlocked new consumer demand. Innovation in technology and AI capabilities are helping to open new doors and businesses that are digitising the customer journey are reaping the rewards. Starbucks lets you pre-order your coffee in-app and several chains are now supporting pay-at-table. McDonald’s acquired technology company Dynamic Yield to offer personalised recommendations to customers at drive-thru displays. According to Contagious Magazine, KFC in China was able to boost sales by 10% year-on-year in 2018 (to $6.5bn) by tapping into the cultural interests of their customers and developing a seamless mobile-centric retail experience. Chris Chen, Chief Creative Officer at Isobar China says ‘To successfully engage young Chinese consumers, you need to be with them and learn about them 365 days a year’.
“Businesses that are digitising the customer journey are reaping the rewards.”
With these examples in mind, we can see the benefit of restaurant chains who are willing to innovate, disrupt the market and adapt to the changing needs of their customers.
Starcount used its pioneering product The Observatory to study, in more detail, the changing nature of the casual dining industry and the new opportunities available to players in the market by better understanding their customers. The Observatory, which is built using a global consumer panel of 1.3 billion people based on their social media and online behaviours, is able to visualise how consumers are motivated and triggered. By understanding their interests, motivations and lifestyle patterns we can see where their emotional loyalties really lie.
“We can see the benefit of restaurant chains who are willing to innovate, disrupt the market and adapt to the changing needs of their customers.”
We took one of the largest groups of casual dining consumers in the UK – millennials – and identified their characteristics and attributes. The largest segment after ‘techies’ and ‘beauty enthusiasts’ is ‘foodies’ (which is 60.5% of the overall millennial audience). When we analysed this to get a detailed view of what motivates them and what they are passionate about we saw it all revolves around food, shopping and travel.
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