Technology is changing the way the food and beverage (F&B) industry runs, but F&B operators are failing to use data and digital platforms to engage with consumers, losing out on revenue opportunities, a new study finds.
Data and social media can be a key way for the food and beverage industry to not only entice existing customers but find and engage new customers in a more personalized way, however only 30 per cent of F&B operators in Canada use technology, data and insights to identify customers through promo codes, card payments and loyalty programs, according to a report from software-as-a-service (SaaS) digital marketing provider Eagle Eye.
Eagle Eye argues that leveraging these technologies represents new revenue opportunities for Canadian businesses in 2019.
The F&B industry remains a strong part of the Canadian economy, representing four per cent of overall economic activity, generating $85 billion in sales annually, according to the report. And 71 per cent of Canadians have a meal outside of their home up to 10 times every month, which is higher than in 2017.
Third-party delivery services, like Uber Eats, and order subscription services, like GoodFood, represent new ways to interact with F&B brands, however fast-food/drive-thrus, visiting full-service restaurants, and getting takeout from a restaurant are still the top ways consumers ‘eat out’.
Yet, the majority of restaurants, bars, and taverns are not keeping up with the digital age that emphasizes personalization through data collection; something most consumers have come to expect.
F&B operators need to think like Amazon, the study states, arguing that keeping track of and reaching out to consumers using data can play a major role in turning one-time customers into loyal, repeat customers.
“If [F&Bs] don’t have the built-in advantages of e-commerce entities like Amazon, how can operators optimize their engagement strategies to create more opportunities for great customer experience,” states the report.
The answer is data
As is well known, companies like Amazon collect and track data customer data to create personalized promotional offers and an overall personalized experience for consumers. It’s something most of us have come to expect, or at least is pervasive enough across companies and industries that most people are comfortable with the idea.
F&Bs, however, have not yet caught on to this trend, states the report. With only 30 per cent taking advantage of technology and data it leaves much room for improvement.
And of those that do collect customer data, “there is still a large untapped opportunity to use that data more effectively,” states Eagle Eye. Only 41 percent of Canadian operators collecting data use it to encourage loyalty programs, which are proven to drive customer engagement, only 33 per cent use the data to identify new customers with similar profiles, and less than a third use data for on-premise personalization and customized offers.
“Compared to other consumer-oriented business sectors, food and beverage operators are less practised at leveraging customer data to create better experiences,” the report states.
It goes on to say that customer data is key to personalized engagement and will drive visit frequency. “Without the technologies and approaches that can collect and connect that data F&B operators will struggle to keep up with competitors that evolve their usage of data to support more seamless customer interactions.”
Loyalty programs are one way F&Bs can gather customer data. The study found that while consumers are willing to participate in these programs they expect more from their data in the form of personalized offers, rewards and better customer experience. And it’s no surprise that Millenials above all others desire an improved customer experience across all channels.
Others ways to collect and use data include point-of-sale (POS), third-party delivery apps, and social media channels. The report also suggest investing in customer relationship management (CRM) platforms that can analyze data and can provide insights.
Using data to engage
While restaurants, bars and fast-food chains engaging with customers is not new, the report argues that Canadian F&Bs “tend to take an old-school approach.” It states that “by embracing technology that facilitates personalized, real-time and geo-targeted offers and promotions, F&B operators can dramatically improve their effectiveness.”
Only 31 per cent of F&Bs told Eagle Eye that they created personalized offers based on collected data. However, when the report asked consumers what they would do if offered an offer or coupon for example 60 per cent said they would return to the location for a second visit.
While F&Bs still have a ways to go, many see technology as the way forward. Fifty-four per cent said that using mobile apps is of extreme importance for reaching customers, as well as social media and digital advertising, and plan to use them in future marketing strategies. Geo-targeting is also being used to push through promotional offers to consumers in certain locations.
The report claims, “social media, as well as the digital and mobile channels, are key for data collection and customer engagement. Canadian consumers are increasingly active on social media; engaging them effectively on these platforms, combined with technology such as geo-targeting, is a winning formula for differentiation.”
Eagle Eye’s predicts four trends for creating more loyalty in the food and beverage industry:
- More F&Bs adopting loyalty programs reaching more people
- More mobile apps delivery loyalty programs and promotions (32 per cent plan to launch a mobile app in the next year)
- Geo-targeting to capture customer interest
- A transition to emotional rewards “F&B operators will realize the long-term engagement benefits they get from emotional connections outweigh the short-term spikes they earn from transactional rewards.”
