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Are Mobile Apps the Antidote to Slower Restaurant Sales?

by MyCheck

August 11 2016



With this week’s announcement of Logan’s Roadhouse bankruptcy filing and continued downward trends in overall restaurant sales, it would appear that the gloomy forecasts set in place by analysts following the industry back in January did, in fact, hold merit. There are some bright spots, but many full service and casual dining concepts are reporting lower sales and lower traffic as consumers gravitate towards quick service restaurants as a result of aggressive promotions and perception of value.

What does this mean long term? Where should brands focus their energy to remain competitive and relevant?

A lot has been written about emerging restaurant trends, from healthful choices to “clean menus” devoid of chemicals and additives, yet some of the most interesting opportunities for growth have nothing to do with food at all – food delivery services and mobile apps. Mobile apps of course are no longer new, but how restaurants use them to engage customers to drive sales certainly is.

How Mobile Apps Drive Sales

Just like restaurants must provide a unique experience in order to stay relevant today, mobile apps must reflect that experience and allow the guest to find ways to consume the brand through the smartphone. This is not necessarily about pressing “buy” like in a retail website, but about finding ways to interact with the guest and figuring out how an app can solve a pain point in the restaurant. Is it placing an order for pickup? Allowing guests to split the check in a more streamlined way? Reordering drinks during a busy happy hour? Paying without having to wait for the check in an often-crowded venue? Making it easy for guests to find menu items that suit their eating habits and preferences? The possibilities are endless.

Brands that think strategically about their mobile app can yield enormous success. In fact, according to a recent article in Mobile Payments Today, “If there is one reason retailers must move forward with a mobile app strategy it's this: Consumers not paying in cash spend an average of 13 percent more when it's a mobile payment experience.” This is roughly the same statistic that MyCheck has seen with many of its restaurant clients, in addition to other hard to calculate benefits like faster table turnarounds and improved guest satisfaction and enhanced interaction.

Utilization is the Key to Success

Given that mobile app users spend more and are generally more loyal to the brand, a mobile app strategy should involve more than features and solving pain points. It must include a long term strategy for engagement and utilization. Users are willing to try many apps, but decide within several days whether to keep them. One time promotions can fizzle and getting customers back after they have disengaged is harder than keeping them engaged in the first place. Asked what were the best ways to engage mobile app users, a panel of Young Entrepreneurs included in their replies, “provide a powerful first experience…[by] setting users up for success…use push notifications to entice them to click on the app and use it…include self-service options…execute on the fundamentals.”

If restaurant sales portend future gloom for the economy, the bright spots in the industry may well be found with the innovators who understand this and use technology to reach out to new customers, stay close to the loyal ones and create experiences that are true to the brand and make people want to come back. Given the amount of time people spend on their smartphones now, it is certainly possible that a good mobile app strategy can be an antidote to the slump.

Sources:

http://www.baumwhiteman.com/2016Trends.pdf
http://m.nrn.com/sales-trends/report-restaurants-show-weakest-performance-july-2013?NL=NRN-02_&Issue=NRN-02__20160812_NRN-02__624&sfvc4enews=42&cl=article_1_2&utm_rid=CPG06000001109617&utm_campaign=11062&utm_medium=email&elq2=808022b86a5844dea62356d3f361922e
http://seekingalpha.com/news/3196652-cheesecake-factory-beats-trend-positive-q2-store-sales-mark
http://www.mobilepaymentstoday.com/articles/detroit-red-wings-it-exec-mobile-enhances-the-customer-experience/
http://www.usatoday.com/story/money/2016/08/08/logans-roadhouse-chapter-11-bankruptcy/88405924/
http://nrn.com/black-box/report-weak-restaurant-same-store-sales-continues-june-0http://thenextweb.com/insider/2016/01/22/9-ways-thrill-mobile-app-users/#gref

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