Which is the single most important ingredient in today’s restaurant business? It’s data.
Surprised? Don’t be. In the face of extreme competition, restaurants, especially quick service restaurants (QSR) (where time is of essence) are increasingly turning to data analytics to reduce costs, increase revenue, and pump up profits. It’s an industry where time is money, where margins are small but volumes, large.
In today’s digital world, electronic transactions have opened the sluicegates for data flow at two levels – the customer and the restaurant; both of which can be used for macro and granular analyses.
Gone are the days of Excel sheets. Restaurants are upping performance by using insights from advanced analytics in two primary areas:
You would be surprised how the use of a few adjectives, colors or even fonts in a menu can increase sales. A recent study by Cornell University, for example, showed that the name of food items that were highlighted or were placed inside a text box drew more eyeballs and were more likely to be ordered. Using analytics to optimize a menu can drive up a restaurant’s profitability. The results start showing within six months. Too broad a menu and your service could slow down, straining your restaurant’s operations. The answer, though, is not to narrow down your menu for that could lead to a miss on sales and other add-on opportunities could be missed. Thus, data analytics is necessary for what’s called ‘Menu Engineering’ for – satisfied customers and maximum profits.
Restaurants, especially those in the QSR sector, need to segment customers in order to understand and even predict their needs. For example, depending on the trip, one needs to classify customers accordingly – trip for a meal for the entire family, or for just one item. Visit patterns can also point to which type of customers visit at which time of the day. Using this mix, data analysts can then customize menus for different times of the day. Needless to state, all this also helps in putting customer loyalty programs in place.
Restaurants can also now analyze menus to establish the most popular (fast moving) dishes or customize coupons for their favorite (repeat) customers.
Industry analysts say that implementing advanced analytics in the restaurant business leads to a 3:1 return on investment.
Restaurants can use advanced analytics to improve even “off the floor” operations. QSRs, for example, want their food delivered faster. Or to improve the overall customer experience. That’s where analytics can help. Restaurants can use closed circuit cameras, for example, to track the speed of services, queue lines at counters, so also at drive-throughs. Not only that but analytics also can bring down inventory (food) waste by forecasting product usage and adjusting purchase, accordingly.
The above are but a few of the benefits of using analytics in the food business. The functioning of almost all the departments of a restaurant can be improved vastly using this new science. Analytics helps identify and plug holes that are bleeding revenue, it can help improve service or drive up sales by faster delivery of food. Behind the scenes, it can help your kitchen run more efficiently.
If you are in the food business, and are thinking of applying data analytics to your business, get in touch with our team for our turn-key solutions.