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Casual Dining

The casual dining industry – what’s on the menu?

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 trends

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.

Our analysis shows that National Rail is the most important brand to this millennial audience. Tripadvisor and LonelyPlanet are also significant. By understanding this there are opportunities, for example, to partner with one of these relevant brands or for optimising contextual advertising.After acknowledging their passion for holidays & travel, we can see that the diversity and round-the-world cuisine offered by pop-up food centres, such as Boxpark and KERB, are potentially extremely important to this audience. When deciding on dish variations and new menus it is important to take into consideration the global mindset of these diners.

62.2% of the ‘Foodies’ audience love following influencers, such as TV chefs and only a small proportion (8.3%) create their own content. This means a huge proportion (91.7%) are just passive consumers of the information posted or shared on accounts and platforms they deem trustworthy. It is important for brands to be aware of which influencers resonate with their audience. Having the right influencer strategy and investing in the right partnerships can significantly help a brand win.

So, what’s the opportunity:

The examples above reveal the wider interests of the casual dining market and help illustrate that when data is used intelligently it allows companies to make more informed decisions around:

  • Media buying – Companies can buy media space on the platforms which resonate with the passions and motivations of their audiences. They can also specifically target more relevant audiences with the right content therefore optimising their media budget more effectively.
  • Content Development – Brands can create content that resonates with their consumers and their interests. If you know what they love and the sort of imagery and language that resonates with them this will ensure more interaction and ultimately drive engagement and sales.
  • Strategic partnerships – Companies can determine what types of partnerships are the best match for the brand’s strategic goals to maximise success, reduce risks and drive growth.
  • Influencer marketing initiatives – Brands can facilitate the discovery and evaluation of appropriate influencers and establish new content to achieve measurable results.
It’s not all TV dinners…

According to Statista, despite the increase in in-home delivery services, eating out at restaurants and cafés still makes up the majority of household expenditure on casual dining in the UK.

Creating personalised marketing services and products based on customers’ data is an opportunity that’s too good for brands to pass by. Companies who have a careful strategic plan in place for using data to advance their communications and business goals will reap the rewards. Shifting consumer tastes are changing the way we eat and drink, brands must act accordingly, listen to the signals of their customers and decipher what the data is telling them. The results, as many companies have proven, are well worth the investment.

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