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Skift-Table-Megatrends-2019.Pdf Consider this your essential industry cheat sheet for 2019 Skift Table moves into its second year of identifying the trends that are shaping the restaurant industry with a renewed focus on the big brands, big tech changes, and big ideas that are having the greatest impact on the business of dining out. These ideas are informed by the last year of original reporting at Skift Table, as well as by themes that emerged during this year’s inaugural Skift Restaurants Forum. The ideas that we’ll explore over the next two weeks touch on relationships between franchisees and brands, consumers and tech, hospitality and expectations, and labor and design. They represent high-level trends and examples of innovation across the business of dining out, and are the ideas we’ll follow closely in the coming year. The trends you read here come through the hard work of the editors and reporters at Skift Table, as well as trusted contributors. For us, these trends aren’t static, they are in motion throughout the year. The best way to keep track of ongoing coverage is with our daily newsletter, which you can subscribe to here: https://table.skift.com/subscribe/ Jason Clampet, Chief Product Officer SKIFT TABLE 2 Research Marketing Senior Director of Research Vice President of Marketing Haixia Wang Natalie Bonacasa Senior Research Analyst Digital Marketing Manager, Events Rebecca Stone Gabi Donchez Senior Research Analyst Growth Marketing Manager Seth Borko Elihn Glass Research Analyst Design Meghan Carty Senior Designer Director, Enterprise Sales, Research Ping Chan-Li Daniel Calabrese Designer Sales Executive Masthead Andrea Yang-Yanez Anne Duffy Design Intern Customer Support Associate Joanna Gonzalez Alex Winkler Founders Advertising & Sales Technology Founder & CEO Engineering Manager VP, Head of Sales Rafat Ali Mike Linden Pamela Firestone Co-Founder & Developer Advertising Director Chief Product Officer Rachel Bronstein Danielle Wagstaff Jason Clampet Director, Business Development Operations President Lisa Weier Parilla Senior Events Manager Carolyn Kremins Executive Sales Director Regina Yuen Deborah Knudsen Chief Financial Officer Junior Events Manager Sales Director Europe Francesca De Francesco Michael Cunniff Kate Irwin Events Editorial Director Editorial Account Director Elizabeth Osder Amy Cogan Executive Editor/Founding Editor Events Editorial Producer Dennis Schaal Asia Sales Director Joanne Laipson Joey Kukielka Office Manager Managing Editor Sales Manager, Skift Table Ali McGhee Tom Lowry Jeremy Vargas Staff Accountant News Editor Account Manager Ernest Capasso Hannah Sampson Lindsay Bashan Senior Hospitality Editor Airline Weekly SkiftX Deanna Ting Managing Partner Vice President, SkiftX Seth Kaplan Senior Editor, Skift Table Katherine Townsend Kristen Hawley Publisher Director of Creative Strategy Jay Shabat Senior Aviation Business Editor Matt Heidkamp Brian Sumers Vice President Research Editor Jason Cottrell Senior Editor Jeremy Kressmann Andrew Sheivachman Editorial Strategist Travel Tech Editor Paul Brady Sean O’Neill Editor Alison McCarthy Europe Editor Patrick Whyte Strategist, SkiftX Sonali Sen Asia Editor Raini Hamdi Editor at Large Greg Oates Business Reporter, Skift Table Associate Brand Strategist Erika Adams Dawn Rzeznikiewicz Business Reporter, Skift Table SkiftX Project Manager Danni Santana Gianna Greco Assistant Editor Video Producer Sarah Enelow-Snyder Richard Chen 3 SKIFT TABLE Table Of Contents TREND 1 The Battle for Loyalty Takes Place on Multiple Fronts P.5 TREND 2 Lines Between Meal Times Have Been Erased P.7 TREND 3 Labor Crunch Determines In-Restaurant Changes P.9 TREND 4 Google’s Domination of Local Discovery Is Almost Complete P.11 TREND 5 Franchisees Assert Their Power Over Chains P.13 TREND 6 Forget Main Street, It’s the Year of the Suburb P.15 TREND 7 Front of the House Hospitality Seriously Ups Its Game P.17 TREND 8 Blockchain Brings Transparency to Sourcing… P.19 If Restaurants Care TREND 9 Restaurants Finally Create Healthier Work Cultures P.21 TREND 10 Product Development Looks to Consumers’ Micro-Feedback P.23 SKIFT TABLE 4 TREND 1 Lettuce Entertain You, a Chicago-based restaurant group that includes over 60 different restaurant brands, is no stranger to loyalty programs. The 47-year- old company has offered a diner rewards program The Battle for since the 1990s, but, until recently, it primarily existed as a physical card-based program. Loyalty Takes Five years ago, Jennifer Bell, Lettuce Entertain You’s executive vice president of marketing, sought to change that. Bell led an initiative within the compa- Place on ny to ditch the pen-and-paper program that it had been running for decades in favor of a digital loyalty app, got rid of a $25 charge to sign up for the pro- Multiple Fronts gram, and watched member count grow exponen- tially as a result. By Erika Adams Speaking in October 2018 at TechTable, a restaurant industry conference, Bell told the audience that the revamped loyalty program now counts 300,000 users on its platform (up from 7,500 when it first relaunched). User engagement has gone up dramat- ically with the digital program, and average checks SKIFT TAKE are significantly higher among loyalty members. Skift Take: For restaurants, loyalty is not just “I’m not going to lie, it’s challenging, costly, and a service to thank repeat customers. It’s an maintenance is tough,” Bell said of implementing incredibly effective data acquisition strategy the program. “But it is worth it.” that is an increasingly vital component of any restaurant’s operations, from discount-driven In a future where technology informs every inch chains to fine dining experiences. of restaurant operations, the punch card trope of a restaurant loyalty program is disappearing fast. Whether the programs are built in-house or through a third party vendor, modern loyalty solutions are driving sales and producing valuable customer data that is integral to building a personalized hospitality experience. DOWNLOAD 5 SKIFT TABLE HARNESSING LOYAL CUSTOMERS means determining how to translate the robust Over the past year, restaurant chains large and small purchase history data into personalized communi- have been focused on launching new digital loyalty cation and incremental sales,” El Pollo Loco’s CEO programs. Chipotle started testing a loyalty offering Bernard Acoca said on the company’s third-quarter in three markets in September 2018 with the intent earnings call. for a nationwide rollout in 2019. Kentucky-based Ital- ian chain Fazoli’s launched a loyalty program in late After observing how loyalty drives engagement, the 2017 and those members now account for 15 percent nationwide restaurant chain also plans to leverage of sales in some locations. its 1.1 million loyalty members to push marketing around delivery and significantly grow the chain’s Even Starbucks, often regarded as building the gold delivery sales. standard for loyalty programs in the restaurant indus- try, acknowledged that it hasn’t yet fully tapped into MORE THAN AN APP DOWNLOAD the program’s potential to drive sales and engage- ment. In the company’s November 2018 earnings call, Native apps aren’t the only way that restaurants are Starbucks’ head of marketing, Matthew Ryan, said driving loyalty. Third-party technology vendor Leve- that while the company counted 15.3 million active lUp — which was acquired by Grubhub earlier this members in its loyalty program, Starbucks has only year — offers a customer-facing loyalty app where “just begun” to fully leverage those relationships. diners can access dozens of restaurant rewards at once. Now that Grubhub owns LevelUp, the compa- “Remember that we’re not in a business of creating ny is aiming to become a one-stop shop for all of a digital relationships for digital relationships’ sake,” restaurant’s technology needs. Ryan told analysts. “They’re an enabler for us to com- municate and talk to our customers.” Credit card providers like American Express and Chase offer robust dining rewards programs that ar- In many cases, loyalty offers a better solution to drive en’t necessarily driven by discounts. World-renowned sales and produce more effective marketing. Fazoli’s fine dining institution Eleven Madison Park has a digital marketing manager Will Hanrahan told Skift longstanding loyalty relationship with American Table that the company’s year-old digital loyalty Express that is driven by exclusive, member-only program has begun to inform the company’s over- experiences. The restaurant’s seasonal pop-ups, EMP all marketing strategy. Engagement and coupon re- Summer House and EMP Winter House, are only ac- demption rates are higher through the loyalty app cessible to American Express credit card holders. versus email and print marketing campaigns, and when the chain needs a sales boost, leadership in- The most engaging restaurant loyalty programs will creasingly turns to Fazoli’s loyalty app to push out be the ones that work best for all parties involved. promotions before other marketing channels. Digitally driven, personalized experiences are key for diners, while restaurant operators need programs Like Fazoli’s, grilled chicken chain El Pollo Loco has that seamlessly integrate with the rest of their tech- also discovered the power of committed loyalty nology stack, from the point-of-sale system to deliv- members. “As with delivery, we are now focusing on ery and online ordering. optimizing our loyalty program, which in this case, SKIFT TABLE 6 TREND 2 Lines Between Meal Times Have Been Erased By Danni Santana LATE NIGHT WARS The undisputed king of late-night dining is Taco Bell. The fast-food chain recently beat out McDonald’s as consumers’ favorite late-night food stop, according to SKIFT TAKE a survey of 1,000 diners published by MattressAdvisor. Instead of narrowly segmenting service into dayparts, restaurants are CEO David Gibbs said last spring that Taco Bell’s fast- thinking more fluidly, to all-day menus est-growing daypart is indeed after 5 p.m. To push and creative late-night service.
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