Restaurant media

Restaurant Media Overview

Restaurant Media Trends

Strong competition will also continue among food service players as they attempt to capture business from these time starved consumers. Major players are already looking for innovative ways to appeal to customers, as evident by the recent renovation announcements from food service giant, McDonald’s Corp. The restaurant chain is establishing what it calls the "next generation" of McDonald’s - restaurants equipped with leather chairs, plasma televisions, and wireless internet. The goal of the renovation is to create a setting to win back customers, particularly young adults and families, and even attract a new type of customer who likes to linger throughout the day. The restaurants are being designed with three key zones: a fast zone, a social zone and a "linger" zone. To date, restaurants with this new format have seen increased guest counts as well as increased sales, effectively demonstrating that consumers’ expectations regarding the dine-in environment are changing. The major players in the food service market have been competing with new product introductions, healthier menu items and new, friendlier restaurant designs. McDonald’s has begun a $5 billion renovation project to try to encourage patrons to linger longer in their restaurants. This demonstrates two things. One, traditional "fast food" restaurants are looking for ways to keep customers in the store longer in an attempt to generate more purchases. And two, the old value proposition behind fast food: deliver a meal cheaply and quickly is also changing. Consumers are becoming so immersed in technology, media and marketing that they are now even expecting to be entertained while they dine.

Consumer Trends

The U.S. saw an increase in the number of households from the period of 1990-2005 yet it also experienced a decline in its population. This resulted in a net decrease in the number of people per household, fuelled mainly by single person household growth (an increase over the period of 30%) as well as two-person household growth (an increase over the period of 25%). Full-service and fast food restaurants will continue to benefit from this trend, as single and two person households find it more economical to eat meals out rather than prepare them at home. A research study by Ipsos-Insight also found that 32% of Americans currently eat at restaurants at least a few days a week and 61% do so at least once a week.

Disposable incomes in the U.S. are predicted to increase between 2005 and 2010, as a result of continued growth in the number of dual income households. This is a favorable trend for the food service industry for two reasons. First, an increase in the number of dual income households means that there is increasing time pressure on the household and a willingness to seek out convenient dining options. Second, increased disposable income typically indicates people will spend more in restaurants. This dual income segment also continually looks for an appealing atmosphere which allows them to dine with friends and family.

Technology Trends

Attempts have been made by several companies to digitize the materials on the restaurant tray cover and enhance the consumer experience by integrating multimedia devices into the fast food trays. In 2006, the manufacturer of multimedia tablets called Mediox showcased the first prototypes of multimedia-enabled trays,. Regular consumer tablets and multimedia phones quickly replaced the multimedia food trays and most of the traditional and quick service restaurants now focus on delivering content via in-store wall-mounted and cash register TVs. McDonald's has chosen to use the self-ordering kiosks as a way of showing their customers a wider range of choices. Just like how online shopping works by making it easy to "add" more items to your basket, so too do the self-ordering kiosks. Standard restaurants have begun to embrace digital menus. Instead of the standard paper menu, some restaurants are beginning to use a tablet type device in order to allow the customer to be more engaging with the menu and ultimately lead to a more satisfied choice. Another technology that has advanced from a paper form into a digital one is loyalty schemes. The classic stamp cards are starting to be removed and replaced with a transaction based loyalty scheme that is linked to the consumers EFTPOS or credit card. Every time the card is used to make a purchase from the restaurant points are awarded to an online account, which can be cashed in for free items off the menu.

Restaurants have also indulged in the mobile app market. Fast food companies such as Pizza Hut and Dominoes are among the many restaurants that offer an app designed for on the go, easy ordering. This idea allows for efficiency and lower wait times for busy customers who need a pit stop meal. Having this data on your phone also allows the app to update so that the customers more frequently purchased items show up faster, which along with online payments being possible through the app, makes it even simpler for the consumer to choose, order, pay for and enjoy the food!

The Teen Segment

There are 73 million people under the age of 18 in the U.S. and these individuals represent the next generation of spenders, a marketing-savvy group that has grown up immersed in technology, the Internet and is accustomed to instantaneous delivery of information. Marketing to the teenage segment of the population is becoming increasingly difficult as the segment now experiences targeted marketing from a very early age. It is hard for advertisers to cut through the media clutter and deliver messages that are relevant and will resonate with this increasingly savvy (yet lucrative) group. This group also tends to be the largest among early adopters of new technology. Trends in gaming, PC and internet usage and mobile technology have all become ingrained in their way of life.

According to a report from Forrester Research, promotions that work well with teens include advergames, instant-win games, online coupons, streaming video ads and cell phone promotions. Restaurant media that encompasses video ads and other multimedia content and encourages interactive game playing will effectively capture the attention of this segment.

Competition in the Food service Industry

Competition in the food service segment is also becoming increasingly fierce as restaurants look to attract diners from other types of restaurants in order to increase their own traffic. Competitors who have not kept up through menu innovation or by offering new services have felt the strongest pressure competitively. Restaurants that demonstrate innovation and creativity to improve convenience and service will be those that achieve differentiation from competitors. Moreover, those restaurants that are able to provide new concepts that can appeal to a wider variety of customers will also realize increased returns.

With new restaurants opening up so often, it is very important that restaurants keep up to date with any advancements in order to remain relevant in the ever-changing market. Media is a basic technology that restaurants must stay up to date with. Fast food restaurants are far more advanced technologically than standard restaurants, as it is acceptable to sacrifice human interaction for fast service and results. However, for a traditional restaurant, adding in self-serving kiosks for example is not an ideal advancement. That us where social media platforms open up huge opportunities for restaurants who need to stay somewhat traditional in the physical restaurant.

Social media is among the fastest growing media platforms in the modern era. Restaurants have jumped onto the social media buzz in a unique and effective way. There are many apps available to download that help restaurants attract new customers and get their name out to the public. One type of app that has revolutionised restaurant to consumer engagement is online search and discovery platforms such as Zomato and Yelp. What Zomato and Yelp do is they sell an advertising platform to the restaurant, which in turn allows users of the app to search for restaurants of a certain type with in a small radius of their location. The use of this type of media allows restaurants to directly advertise to a very specific target audience, as customers refine their searches to find a specific restaurant to suit their needs. Through signing up for social medias such as Zomato and Yelp, the restaurant is also telling the customers that they are confident in the quality of their product as the app allows customers to place reviews on their experience at the restaurant . In 2009, 70% of all restaurants were listed on Yelp. A positive correlation exists between the revenues of restaurants and their online reviews.

Online review platforms are not the only form of social media that has revolutionised the restaurant industry. Even the large social medias such as Facebook and Twitter have had a huge impact on the industry. An example of this was KFC’s release of the Double Down burger. Whether the topic of discussion was positive or negative regarding the Double Down, conversations through Facebook and Twitter especially had a greater success of reaching consumers than any advertising campaign for the burger did. The hype and controversy over the burger in May 2011 made it the most desired item on the Kentucky Fried Chicken menu. The idea of using a social media in the restaurants advantage is to get people talking about you restaurant or an item on your menu. This is essentially free advertising. Not only is it free, but also 92% of all consumers believe recommendations from friends and family over any advertising campaign. Restaurants want to utilize the opportunity for free advertising via Facebook, as it is a platform that can be constantly updated with new items, deals or even new store locations. Photos and videos are a far more effective advertising medium, which makes Facebook a perfect media to use for advertising product.