Five Reasons Restaurants Need to Create a Sense of Place
The lines that once clearly distinguished fast food chains from their fast casual, casual dining, and fine dining competitors are blurring. Everyone is competing for customers’ attention in an effort to increase brand loyalty and frequency of visits. From new advertising campaigns and enticing menu items to the integration of ordering and payment technology, foodservice brands are struggling to determine which strategy will provide the greatest impact. There is one initiative, however, that stands out as a clear differentiator. To avoid competing in a very crowded market for fickle discretionary dollars, foodservice brands can attract consumers’ attention by creating a sense of community.
Gone are the days of cookie-cutter designs where conformity was the rule. Brands that are tipping the scale on brand preference, such as Starbucks, clearly understand that creating a sense of place allows them to better reflect the communities they serve. Here’s how:
#1: Cater to Millennials
The highly coveted Millennial generation craves experiences that offer a sense of discovery and self-expression that can easily be shared with friends on social media, according to our recent study on the role of technology in Millennials’ purchase behavior.
Chains that pride themselves on their ability to provide a consistent experience offer Millennials little incentive to share it. Consider that 53 percent of Millennials go out to eat once a week, compared with 43 percent of the general population, according to research by Morgan Stanley. Millennials are also eating most frequently at fast food chains. Yet, these chains, such as McDonald’s and Wendy’s, have lower net promoter scores (the metric that defines brand loyalty) than fast casual chains, such as Starbucks, Chipotle and Panera Bread. A clear indication of the issues is the fact that the top three fast food chains in the U.S. – McDonald’s, Subway and Wendy’s – saw declines in system sales last year. Fast casual chains are finally realizing the buying power and crowd influence of Millennials who are constantly exploring unique experiences and food offerings. For example Panera Bread offers mobile savvy customers the opportunity to order ahead or to use digital kiosks in their restaurants to order their meals.
#2: Tell a unique brand story
A big trend in the foodservice industry is to promote locally grown food to reinforce freshness and a commitment to sustainable practices. The need to support local is especially strong among Millennials who prefer unique, quality foods, which is reflected in the type of brands they select. Create greater brand differentiation and define a sense of place by telling a unique brand story – feature your head chef, highlight your restaurant concept, share how the food is sourced. Sharing your brand story is a key factor in building frequency of visits and loyalty.
#3: Be socially responsible
With so many restaurant chains vying for the customer’s attention and wallet, selling more than what is on the menu plays a critical role in standing out from the crowd. Supporting relatable local initiatives and social causes, such as animal welfare, conservation and local community involvement, helps brands create strong local differentiation, irrespective if you are a multinational chain or an independent operator. In fact, a recent Technomic study says 63 percent of consumers are more likely to visit a foodservice establishment they view as socially conscious.
#4: Make your experiences appetizing, not just the food
People are eating out more frequently according to U.S. Commerce Department data – sales at restaurants and bars overtook spending at grocery stores in March 2015 for the first time since the department started measuring it 23 years ago. With more people eating out, the pressure to create unique experiences grows. Millennials and Baby Boomers alike crave a sense of theatre, like open kitchen layouts or unique decor elements that become conversation pieces. Our study on Millennials confirms this impact on brand preference with 80 percent indicating brand loyalty is highly influenced by experiences. The ability to craft memorable experiences that can be shared through word of mouth and social media forms an integral part of providing a unique sense of place.
#5: Create badge value
Convenience, consistency and trust as key differentiating factors in brand selection are becoming table stakes. However, brands that reflect the aspirational self-image of the customer are gaining market share. The old saying “we are what we eat” brings on a whole new meaning when what we eat reflects our aspirations and desires. Starbucks realized this right from the onset, creating potable badge value with its iconic white paper cups. As new entrants crowd the marketplace and try to foster their own badge value, existing brands need to up their game. By better reflecting their customers’ sense of self and the communities they live in, brands will be viewed with a new level of ownership, as more than just a chain restaurant but as my restaurant.
As foodservice operators continue to strive to create preference and loyalty for their brands, they will need to consider the importance of creating a sense of place. Multi-unit operators must overcome years of focusing on operational consistency to allow each unit to better reflect their customers’ neighborhood, which will provide a stronger emotional connection that will drive influence at the critical at-purchase moment.
Read more about our North American consumer study on the importance of community in your restaurant.
Is your restaurant concerned with creating a sense of place? How are you building a sense of community for your customers? Let us know in the comments below and subscribe to receive the latest Shikatani Lacroix insights in your inbox.