January 8, 2019 |
Big Data is a buzz phrase that is thrown around like confetti and is attached to a whole multitude of things from the Cambridge Analytica scandal that changed the way consumer data is collected through to the resurgence of Domino Pizza, which has used data to understand its customers and re-engineer both its products and ordering processes.
Data used to be the most difficult thing to get, with database owners guarding their prize with the vigilance of guards at a maximum security prison. Insurance companies, healthcare providers and financial advisors would turn up to work in shiny shoes and white shirts ready to hunt down the poor sods whose names appeared on their sales database.
But today data is everywhere, scattered across the digital world like cyber-confetti, and we all have access to it with a few clicks on our keyboard. We can quickly gain information on the size of a potential market, stock price variations or how many times she swiped left (or is it right). The data we can collect and subsequently use to our advantage is endless.
But how can it be used effectively, not just to assess what products should be promoted, ditched or amended but to design a customer journey that is formed by data and supported by gut instinct and feel? We suggested that the F&B industry does not do enough research as it is let alone use the data available to plan strategies based around predicting current and future consumer behaviour and not industry trends.
The F&B industry, in the main, is behind the tech curve as it still uses industry trends to create concepts that drift aimlessly across the seas trying to convince an increasingly aware consumer that they really need to come and patronise them. No wonder then that delivery services are becoming more prevalent as they, at least, understand consumer desires through their obsessive use of data. Deliveroo Editions, for example, uses data to earmark under-represented cuisines in certain areas and sets up virtual kitchens to fulfil this gap. Some might say they are just tech companies masquerading as F&B operators, but they meet a need.
Need and the use of data are intrinsically linked. Data is collected though consumers putting their lives, habits and preferences online for all to see. This data is segmented, sliced and diced until it fits neatly into boxes that can be used to create and deliver consumer-focused products that fit the published need.
This is the opposite of the usual process. In the main, a restaurant is an internally-focused idea that either followed a trend, a whim or is the outcome of some loose gap analysis. Yes, some restaurants are wildly successful and spawn a whole world of copycat brands, but the hit rate is low and is getting lower.
So how can data be used to create the restaurant of today and tomorrow? It has been said that location, location, location are the most important aspects in success. I disagree. Data, data, data are the three most important aspects as they give you an insight into the customer, who you will ignore at your peril.
I hear operators shouting that this is rubbish and that they use daily data from the point-of-sale system giving them a great insight into their P&L. This is true and shows how important data has become in decision making, superseding the previous gut-instinct approach to operations. But it’s only the tip of a growing iceberg.
Social media is another important source of data and marketing agencies have a strong grip on this dark art. They work tirelessly posting on the various channels to convert followers, likes and engagements into a report justifying their fees. But there must be so much more that can be done to make data-thinking a central tenant in a business?
Data can and should be used to develop the entire concept.
If you look at the process of development, data can be used to make every decision a lot easier to make as long as you know what you want to achieve. If you want to create a brand that sells vegan burgers to the body beautiful then it would make sense to understand the dynamics of that consumer and build a brand based around these inputs. There are a number of tools that can be used to help.
Geomapping, for example, can give you an immediate snapshot into the type and density of competitors that you may face in any given area. With this knowledge you can develop your locational and real estate strategy with facts and not just assumptions as did the successful chain Hai Di Lao.
Consumer surveys, using tools such as SurveyMonkey and QuestionPro, will tell you how much your target audience is prepared to pay for your product as well what they would like your product to be. I understand that it is your dream, your brand, your baby etc – but ultimately you are not the customer, so it would make some sense to ask the customer before you start spending.
Systems such as OpenTable will also have valuable information on the dining preferences of your prospective target audience. So understanding what these preferences are will enable you to build another layer of understanding into your plan.
The data collected from the interaction with potential customers will allow you to design both your operating system as well as your physical store with a lot more confidence than the previous ‘build it and they will come’ approach. If the data suggests that consumers have a low spend and low dwell time expectation of your type of product then it makes sense to minimise the investment into staffing and expensive design features and instead focus on a fast, more efficiently designed operation.
If you already have an outlet and are looking to gain a greater insight into your customers, then motion tracking software will allow you to understand your customer’s movement and behaviours. This data will give you a more detailed understanding of your customer to whom you can provide a better service. In addition, it can form the basis of an algorithm to be used in conjunction with creativity to develop a better, and more profitable, outlet. Whilst interior designers may well throw their hands up in horror at the thought of data-driven design, they will have to realise that the days of creativity over substance are coming to an end.
By using the data that is available, an operator can make more considered decisions from the start of the project and minimise the needless expenditure that pure gut-based decision making could lead to. Currently data is only used to assess existing performance and to then make marketing/promotional decisions, but as the examples above show there are a number of areas in which data can be used from the outset.
Tomorrow’s brands will have to be flexible and consumer-focused. They need to be agile enough to adapt to the shifting sands of consumer demand through a combination of low sunken, fixed and operating costs as well a strong understanding of their customer.
And all of this is achievable through making data-thinking a central tenant.
January 14, 2019
January 9, 2019
November 16, 2018