Last year, $1.6 billion of the money spent in the Canadian restaurant industry came through what has come to be known as the digital door — a term referring to all the business coming to a restaurant through an online portal.
That’s still quite small, only about two per cent of the $50 billion spent in the Canadian restaurant industry annually, but it’s also growing at an unprecedented rate. That $1.6 billion is up 20 per cent from the previous year, which itself had jumped 50 per cent over the previous year’s. Robert Carter, director of Foodservice for the NPD Group in Toronto, which has tracked consumer purchasing patterns in this area for the last six years, says customer spending in this area is expected to double in the next three years.
“The foodservice segment is lagging behind the times when you look at other retail spaces that have embraced digital strategies,” he says. That’s because, traditionally, restaurants have been more focused on operations and menu innovation. “It wasn’t top of mind,” Carter says.
As a result, big players have dominated the digital space, starting with the pizza chains. Domino’s stock has risen 70-fold since 2008 — from $3.03 a share at its lowest to as high as $218 in June of this year — a trend widely attributed to one innovation: the ability to order and track pizzas online. Today, more than 60 per cent of Domino’s sales come through its digital platforms.
Starbucks’ mobile application, which Carter calls “the best-in-class,” is a fairly straightforward payment-and-rewards platform, but it also allows customers to order ahead and skip the line. Use of the mobile app accounted for 10 per cent of all transactions in the third quarter of this year — double that of the previous year.
Now, Carter says, it’s not uncommon to see businesses hiring Chief Technology Officers, in addition to personnel specifically to run their social-media accounts. But third-party companies, such as Foodora, UberEats, Skip the Dishes and others, have made it possible for operators to offer the same digital conveniences as the global foodservice giants. “Although it’s taken a little while, restaurants are embracing it quite aggressively now,” he says. “If you choose not to be involved in [online ordering] as a restaurant, you’re leaving money on the table.”
But, even for restaurants uninterested in getting involved in mobile payment or ordering platforms, a comprehensive digital strategy can have a big impact on brand awareness and eventual sales.
As Carter points out, if you have a product and you’re putting it out there, people are going to be talking about it. Word-of-mouth still remains a live-or-die mechanism of restaurant marketing and social media and review sites, such as Trip Advisor and Yelp, have simply amplified the reach and influence of customer comments. Carter says it’s impossible for restaurants to control that message, but these digital spaces create a massive opportunity to resolve customer complaints and revitalize the brand. Wendy’s, for example, has transcended the squeaky-clean and out-of-touch PR-speak to become the world’s single-most beloved corporate Twitter account. In the last year, the brand reached 2.2-million followers, pumped out several memorable roasts of rival fast-food chains and prompted what became the single-most retweeted tweet in the history of the platform. The nuggets tweet, in which a 17-year-old promised to meet the goal of 18-million retweets in order to earn free nuggets from Wendy’s for life, surpassed three million retweets, beating out Ellen Degeneres’ Oscar selfie.
But, alternating between the snarky and humourous takes, the social-media team always seems to manage to effectively integrate their brand’s messaging. Its Twitter bio reads “We like our tweets the same way we like to make hamburgers: better than anyone expects from a fast-food joint,” and its most popular tweets have almost always been about its food.
“At the end of the day, we know from our research, when we ask consumers what’s most important: it’s the quality of the food,” Carter says. “Lots of things will be said online, but if you have a good menu and a good product people like, the rest falls into line.”
Written by Tristan Bronca