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Restaurants Hungry for Omni-channel Strategy

The Coronavirus has disproportionately impacted the restaurant industry. The onset of the virus followed by restrictions and closures caused restaurants of all sizes to evaluate and redesign their services to meet the customers’ needs. Restaurants that are positioned well are those who recognize that the future is omni-channel, take the time to know their customers, and leverage technology and data to best serve their customers.

The term omni-channel has long been used in the retail space to describe the varied range of options given to consumers to collect their purchases (in-store, online, drive-up, app) but restaurants have typically only needed to engage with customers on one or two channels – dine in and carry out – to prosper. That is, until Coronavirus hit. With safety and convenience at a premium, today’s customers expect to be able to order and pay for food from an app, have it delivered, see a menu and order online, pick up with no contact, and dine in.  

Know your technology

Restaurants have quickly invested in technology to help build the omni experience. From fast-food apps that let you to order and pay from your phone or allow quick, contactless pick-up, to connecting with third party delivery, restaurants have an opportunity to attract and retain customers by expanding ordering and service options. This is critical as total online restaurant spending has been trending 90%+ YOY since mid-April.

Now is the time to retain customers by catering to their personal preferences and using their purchase history to anticipate how they’ll spend in the future.”

Know your customer

With the expectation for an omni-experience now a given, restaurants must know their customers better than ever, and personalized, relevant marketing is key. For example, a national chain promoting dine-in to Covid-restricted markets will get little from their efforts. Similarly, serving a delivery ad to someone who has never used delivery likely won’t generate a response, but serving a delivery ad & reward to a high-frequent delivery user will have a much higher success rate.  Restaurants need to pursue the current purchase behavior in the marketplace. Now is the time to retain customers by catering to their personal preferences and using their purchase history to anticipate how they’ll spend in the future.

Know your opportunity

Understanding your restaurant’s individual opportunity is also critical when considering how to market, and having the right data is an essential part of identifying where there is room to grow. A great example is the third-party delivery space, which is not surprisingly on the rise. Spend in third-party restaurant delivery reached an astounding. As of 7/30, delivery spend was up 173% year over year—its highest increase so far in 2020. Year to date, consumers have already spent over $180M more on delivery than they spent in all of 2019. But is this lift sustainable, and if so, should restaurants continue investing in newly acquired customers beyond the pandemic?

The data says, yes. Cardlytics can see a wide range of valuable purchase insights through our advertising platform, which is built in banks’ digital channels. Our data shows that even as on-premise dining had a resurgence in mid-April in regions where infection rates were on the decline, Online purchases remained constant. For instance, consumer spending at physical restaurants increased nearly 40 points between mid-April and late August (from -55% to -15% YOY), but Online spend maintained increases of 90%-130% YOY during the same time period, demonstrating that there’s enough consumer demand to maintain both dining choices.

But is this being propped up with new customers, larger check sizes, or more frequent purchases? Our data shows there is growth in all three categories, which means restaurants should focus their marketing on acquiring new customers, enticing diners to spend more per occasion, and retaining customers to build frequency & loyalty.

The bottom line is: What consumers want – quality, convenience, and value – hasn’t changed, but the way restaurants deliver this experience has, and technology is enabling the purchase behaviors. The good news is, more and more customers are using technology as part of their restaurant experience, and it’s sticking. Add a renewed industry focus on personalization and convenience, and you get a bright future for consumers and restaurants alike.

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