Back in November when I reported for Food On Demand about McDonald’s planned delivery expansion with UberEats, I wrote, only slightly tongue-in-cheek, that the move would allow more people to get the chain’s cheap eats without interrupting their Netflix binge. Now, reading The NPD Group’s 2018 outlook for the foodservice industry, I’m convinced that scenario was right on.
With the changing workforce, the ease of online shopping and the surge in streaming entertainment, there are fewer and fewer reasons to leave the house, and as market research company NPD notes, “the most popular place to eat out [in 2018] will be in the home.”
“Nearly 50 percent of dinners purchased from a restaurant are consumed at home,” the group reports, meaning operators should look at making it easier to get meals to where consumers live. That’s great news for third-party delivery providers, who are in a position to capitalize not only on the booming do-everything-from-your-phone culture shift but also changes in the workforce that are spurring a desire for someone else to do the cooking for them or to make it easier for them to do so at home.
Convenience is a demand that continues growing, and text and mobile app ordering—both of which posted strong growth in 2017—will continue their trajectory. While digital ordering is a must-have for most operators to drive traffic, it’s imperative, NPD says, for operators to understand their customers’ wants and needs from a technology standpoint. There’s not a one-size-fits-all approach, and instead operators “must decide which convenience-enablers are worthy of your investment.”
Red Robin is one such restaurant company that’s being intentional about its use of digital ordering. “Our goal is for it to complement or expand our reach, not take the place of in-restaurant dining,” said CEO Denny Marie Post about online ordering and its partnership with digital platform Olo. “But, ultimately, if our guests are going there, we have to be there. It’s pretty simple—you’re going to be out of business if you’re not there.
Red Robin is marketing most heavily to its 6 million Red Robin Royalty members, while also using banner ad placement and targeted Facebook ads to give potential customers an immediate way to act when mealtime rolls around.
The company also announced in November the test of a delivery-only concept in downtown Chicago. The new Red Robin Express test concept will operate without a traditional storefront, offering many of the same restaurant menu items along with access to the full catering menu. Orders will be self-delivered by Red Robin and through third-party providers including Amazon and DoorDash.
Here are some other interesting points from the NPD forecast:
• Expect a new round of value wars among QSRs in 2018 as they respond to slow traffic. McDonald’s already announced its new $1 $2 $3 Dollar Menu, which launched nationwide January 4, and the competition will likely follow suit with their own versions. LTOs, too, are expected to play an even greater role in operators’ marketing initiatives as they seek to target lighter buyers in 2018, says NPD.
• Loyalty programs are high on the list of incentives that would lead consumers to visit restaurants more often. They’re not new to the restaurant industry, but technology has changed how they are executed. This requires developing programs that meet consumer needs using digital as a primary delivery tool.
