October 14, 2020

How Quick Service and Fast Casual are getting their groove back

Written By
Rob Kenny, Director of Restaurant Partnerships

It is no stretch that COVID-19 has impacted all facets of life, including the way Americans shop and dine. As fall and winter approach, restaurants will need to continue to adapt to changing consumer behaviors, social norms, and in certain parts of the country, the colder weather. An analysis from the Dosh Data Lab comparing consumer spending behavior before the onset of COVID-19 through this summer provides insights into what restaurants can do now to best position themselves to end the year strong. Here are five key takeaways from our data that will help marketers ensure success in the new normal. 

1. Understand new “seasonality”

Traditionally, restaurants experienced weekend sales spikes but the Dosh Data Lab shows that these weekend spikes were not sustained as the pandemic wore on. To address this new seasonality, restaurants should focus on driving new visits and engaging lapsed guests during the week, or on a more consistent basis, with new seasonal menu items and cash back offers.

The historical data shows a 15% increase in daily restaurant sales on Fridays and Saturdays compared to the rest of the week. But this early weekend spike has dissipated to more of a molehill over the course of this year, declining to 12.5% in March/April to only 6% in July. 

2. Reward loyal guests

Conventional wisdom suggests that once shelter-in-place restrictions went into effect, average check amounts would have declined due to less in-restaurant dining or slower economic growth. However, data shows that the monthly average check amount for January/February compared to March/April remained relatively constant. In fact some restaurant categories experienced increases in average check size. For example, pizza saw a solid 11% increase from $23 per check to $26 and the restaurant industry overall received a drastic 23% increase from $11 to $13. This data proves that having, and keeping, loyal customers can be a savior in tough times - so it's important to nurture them through rewards like cash back.

3. Look beyond the fans

The Dosh Data Lab found that between January/February and March/April this year, 41% of restaurants have increased sales at least 10% since quarantine while 49% saw sales drop. Despite the coronavirus disrupting consumer spending patterns for about half of the industry, there are still opportunities to attract new guests for growth. In addition to rewarding their loyal guests, restaurants should also target additional customer segments to widen their brand appeal. According to a study by the Center for Generational Kinetics, Millennials and Gen Zers are most responsive to low effort rewards, such as instant, frictionless cash back offers. 70% of Millennials and 74% of Gen Zers report that they would spend more if they know they are getting 5% cash back. This is an opportunity for traditional restaurant brands to further engage these groups and increase brand awareness through mobile engagement, as the ubiquity of smartphones has spread to younger generations. 

4. Focus on convenience

The experience and success of the pizza category in 2020 demonstrates how restaurants that have embraced technology and streamlined operations are seeing greater consumer engagement and sales. This has certainly helped build trust between pizza restaurants and customers and contributed to the pizza category’s success during the pandemic with sales increasing by 2X since March. Other strategies that have helped restaurants successfully navigate the COVID landscape include: strategic marketing promotions; a focus on drive through business, and increased pick up and delivery options. On the other end of the spectrum are cafes and delis that typically serve office workers and function as informal community gathering places. These restaurant categories are struggling as the shift to remote work and work from home happened. All restaurants can lean into deploying more technology to streamline the ease of ordering and provide frictionless restaurant operation while enhancing the dining experience for the guest to increase sales and build brand affinity.

5. Embrace digital solutions

Restaurants can manage changing dining behavior by using more digital tools like Dosh’s cash back digital marketing platform. Dosh Data Lab data shows that restaurant cash back campaigns continue to positively impact guest spend in 2020, from a 17% lift in share of wallet to a 53% lift in daily sales during-campaign daily sales to a 45% increase in frequency. For one specific restaurant group, Dosh’s online-to-offline rewards platform also re-engaged lapsed customers: 87% of guests Dosh brought to the restaurant had not eaten there in the last six months, in other words they were net new.

This year-end provides opportunities for restaurants, especially those getting back on their feet, to re-engage existing guests and attract new guests now. The Dosh Data Lab shows that influencing dining spending behavior with unique, product-forward, cash back marketing campaigns works. Restaurants have the tools available to maximize return on advertising spend (ROAS) while increasing brand loyalty and bringing consumers delight and surprise during this fall and winter. Click HERE to connect with your Dosh rep.

Sign up to receive our newsletter and exclusive resources.
Thank you!
Oops! Something went wrong while submitting the form.

Sign Up for Our Newsletter

Sign up to receive our newsletter and exclusive resources.

Thank you!
Oops! Something went wrong while submitting the form. Please try again.

You may also like

No items found.