As we close in on the fourth quarter of 2020 and prepare to implement 2021 plans, it’s important to look at the challenges the restaurant industry has faced in the past six months that will affect next year’s strategies and outcomes.
In May, I collected data and opinions from industry experts and published a blog titled: What’s next for restaurants? Four tips for moving forward.
Here were my observations then:
- Make diners feel safe and protected.
- Free delivery may be a new cost of entry.
- Millennials will emerge as core customers, if they weren’t already.
- For QSRs and CDRs thru-put systems need to bring a sense of structure and safe distance flow.
Here’s what has happened and what we know about 150 days later as we saw positive cases grow in large metro areas on the east and west coasts, then hit the gulf coast and slowly migrate to the heartland and rural neighborhoods. As we speak, the US is bracing for a third peak of cases. France and Germany have tightened up restrictions and some states are considering the same.
Deaths in the U.S. have exceeded 200,000, and are still growing at about 1,000 per day. As the country shut down, people stopped moving around for anything but necessities. Mass gatherings became illegal. I’ve always said that restaurant transactions, from white table cloth to hot dog stands require consumer movement. People need to be going places and doing things. That’s why weather is such a driving factor. If you can’t drive around during inclement weather, you’re not dining out. Grocery store volumes spike. Folks hunker down.
My observations from May still hold up, but the question is, has consumer behavior changed permanently?
What’s happened since May 5th?
- The restaurant industry is poised to lose close to $250 billion nationwide.
- Dining rooms were shut down, then opened to limited capacity only to be shut down again in some places as the virus spiked.
- QSRs, to a degree, survived as drive-thru’s were maximized and carry-out/delivery thrived.
Considerations for 2021 restaurant marketing plans
Value will still be King. Financially, around the world, things are uncertain. With the presidential election, how will jobs, the stock market and consumer spending be affected? Calendar tactics need to weighted toward deals or everyday value.
Online ordering for carry-out or delivery will continue to grow. Holiday spending is predicted to be bigger than ever. Buying online and picking up in store will be a choice that many consumers will make. QSR drive-thru transactions could see a bump. Also, the ghost kitchen idea will continue to grow. Chili’s and Applebee’s are turning underutilized brick and mortar dine-in assets to create virtual concepts like It’s Just Wings (Chili’s) and Neighborhood Wings (Applebee’s). Food is prepared in the existing kitchens, packaged and delivered.
Loyalty may suffer. Consumers couldn’t find their preferred products in many cases, so they tried different/available options. Will they come back? That remains to be seen.
Health and safety will continue to be concerns. One wonders if there will ever be a time when we don’t see at lease some masks being worn in public, like Asia. Visible safety measures will be important. Spraying and cleaning will need to be constant.
Consumers will be hesitant into 2021 to return to normal patterns. In the last few weeks, we’ve seen an outbreak on Capitol Hill involving the POTUS. Even though surveys say that shopping is first of the list for activities to return to…equals movement…equals restaurant transactions…pundits suggest a slow build after solid medical recommendations.
To conclude on 2021, clearly it’s a “we’ll see” status for all of us on many fronts. But, the overriding factor is that people like restaurants. Regardless of whether the food or beverage is handed out in a bag, delivered to the front door or set down on the table, the consumer behavior of dining out and off-premise meals will survive and someday again thrive.
At Callahan, we don’t build restaurant chain marketing strategies until we have all of the data by store, over time. We overlay real-world databases and work with our clients to direct resources where they’ll have a better chance to pay off. We like to say we turn data into action that informs strategy, inspires creativity and drives traffic. Give us a call. We’d like to listen to how your brand is navigating these crazy external factors and see how we might be able to help.
Looking forward to sit-down service someday soon.
Greg is a 45-year restaurant marketing veteran with agency and client-side experience. He has served as VP of Marketing and Brand Development for Sonic, Director of Field Marketing and Brand Manager at Applebee’s, Field Marketing Divisional Director for KFC and agency side experience with McDonald’s, Subway, Pizza Hut, Krispy Kreme, On the Border, PF Chang’s and Pei Wei.