Mobile Payments Today editor Will Hernandez took to the National Restaurant Association Show for the first time to see how restaurants are connecting with the connected consumer.
Over the years, merchants have been reluctant to embrace emerging technologies for many reasons. They usually ask the same question: How will new technology help my business sell more goods and services?
The restaurant industry in particular has been slow to embrace new developments in mobile technology, but that is changing. And maybe that’s because the industry has come to a point where it’s a necessity for a number of reasons.
A recent study by Gartner revealed that worldwide smartphone sales reached 1.4 billion units in 2015, up 14.4% from 1.2 billion the previous year.
A 2015 Pew study found that around 66% of Americans own a smartphone.
The restaurant industry would be wise to take note of these trends and adjust their digital strategies to reach consumers on their most personal device.
Much discussion on this particular topic took place at the recent National Restaurant Association Show in Chicago. I was at the show for the first time this year and it was clear to me that connected consumers are driving this industry.
We’ve come to a point where a marketer needs to have a clear digital strategy in place or risk losing revenue, which could very well lead to the disappearance of certain brands. This may seem like a bit of a stretch, but think about where certain technologies are and where they are going, not just with smartphones, but also with wearables and the Internet of Things.
The brands and companies that make up the restaurant industry recognize that challenges lie ahead.
“It’s a challenge because we know customers love smartphones and if we’re successful we can get space on that smartphone,” said Scott Bradley, founder and CEO of mobile marketing company VMob, during a round table at the NRA lounge.
But sometimes that connection happens for restaurants long before their app ends up on a consumer’s smartphone. There is no better recent example than Chick-fil-A.
The popular quick serve channel earlier this month released a mobile ordering app to solve a problem identified in a recent millennial survey. This demographic doesn’t like to queue for anything, so Chick-fil-A worked to create an app that would solve that problem. Over a million people downloaded the app within the first week of its release.
Of course, it didn’t hurt that Chick-fil-A offered consumers a free chicken sandwich for downloading the app before the end of June. But the appeal of its food had struck a chord with consumers long before the company decided to launch a mobile app.
Chains such as Domino’s and Starbucks have also seen great success with their respective mobile apps. But they too had a strong connection with their consumers even before they created and refined their digital strategies.
“We need to change the way we think about our customer engagement,” Bradley said. “Before, it was easy. We just needed to get people into the store. Then restaurants had to balance the omnichannel effort.
“Let’s not worry about channels and put the customer at the center of everything.”
Once that happens, it’s time to focus on how restaurants can better engage those customers.
Jennifer Bell, Associate Partner and Chief Marketing Officer at Lettuce Entertain You Restaurants, discussed in one session her brand’s efforts to better engage customers through a mobile app.
“You have to set goals and look to the future with technology,” she said. “We are very proud of our Lettuce Eat app. It allows us to have direct communication with our customers and it has been a wonderful experience for them.”
Lettuce expanded the usefulness of the app by incorporating its loyalty program after some tweaks. Bell said there were two problems with the program before the company added it to the app – customers often forgot their loyalty card and sometimes were unaware they were eating at a Lettuce restaurant because the he company owns and operates several different brands.
“We create a hub of all the things a restaurant could want [in the app] and create better loyalty with that guest,” Bell said.
As restaurants continue to incorporate new technologies into their customer engagement efforts, at least one executive told NRA attendees that brands still need to be careful about determining what works best in different situations.
“The times when [new technology] works best is when we ask what we want out of technology,” said Lauren Hobbs, chief marketing officer for Union Square Hospitality Group, during a panel discussion on technology in the hospitality industry. “But it’s difficult because there are a lot of companies and we have to think about what we want to get out of them. One of the things we decided to do is get better customer feedback.”
Hobbs made an interesting observation about the state of mobile payments with restaurants, and it’s an observation that’s likely shared by other B2C segments.
“Mobile payments aren’t there yet because the user base isn’t there,” she said. “The promise is there, but until you have enough users, restaurants don’t see these kinds of transactions every day and it becomes a worse experience. That’s why restaurants have put in the time to embrace mobile payments.”