Consumer behavior, much like society, has been in a constant state of flux these past two years. The food service industry has performed a balancing act as customers express desires for both physical and digital experiences. To measure the new habits, behaviors and sentiments across the U.S., U.K. and Germany since the start of the COVID-19 pandemic, a leader in product development, engineering and design released the second part (a quantitative survey) of its four-part “Consumers Unmasked” study. Primarily, the survey asked three main questions: Between physical and online, where have opinions shifted? Do people still prioritize price over brand ethics, sustainability and social responsibility? And, has the pandemic altered customer loyalty? For the food service industry, particularly sit-down restaurants, the findings of this 3,000-shopper survey illuminate the latest evolution of customers’ desires and where those feelings might be in the future.
The Previous Study Compared to The Most Recent
The qualitative study noted that consumers are eager to return physically to their favorite restaurants for professionally prepared food, ambiance and enjoyable experiences. Likewise, people showed support for companies that promoted sustainability and organic food. The main themes of the study were that fair pricing mattered most, finding great deals was equivalent to a badge of honor, businesses must deliver rewarding experiences, company ethics is a necessity, and finally, people were still concerned about COVID-19.
For the newly released quantitative study—and the themes it uncovered—they remained largely the same. Consumers still want value from their money; discounts are still highly treasured. Convenience remains king and is a major driver of retention and loyalty. Moreover, consumers desire brands that emphasize honesty, transparency, sustainability and social reasonability. And when it comes to hybrid dining experiences, omnichannel is a must—but, even so, people want the freedom to choose.
Evolving Spending Habits and Preferences
From a bird’s-eye view, the survey’s most significant findings included the explosion in the popularity of food apps amongst shoppers, which raises the challenges of maintaining good quality and fair price. Ordering food through delivery apps was the most preferred way to buy (36 percent) for surveyed respondents across all markets, genders and age groups. Ordering via a QR code in a restaurant was lower on the list, with only 15 percent of Americans indicating that it was their preferred method.
As for spending habits, the survey found that consumers now spend more on eating out and takeaway than they did last year. Specifically, four in ten people spend more than they did three months ago, and only one in five are spending less. Furthermore, four in ten participants specified that they would spend even more on eating out (42 percent) over the next 12 months. The decision to eat in or dine out is generally impulsive; 67 percent of respondents said they eat out at least once a month and 20 percent at least once a week.
When buying food, consumers ranked freshness as the number one factor of consideration, followed by speed of delivery and then discounts and deals. For retailers, the challenge is delivering fresh food at the price points customers expect, and one potential way of doing that is by collaborating in the use of “ghost kitchens” that power delivery but never actually serve a paying customer on site.
How the Three Markets Differed
In the U.S., almost half (46 percent) of consumers were spending more on eating out compared to three months ago. While consumers in the U.K. (41 percent) and Germany (42 percent) were spending more on takeaways compared to three months ago. British consumers also ordered takeaways with the greatest frequency, with 22 percent making use of takeaway services on a weekly basis and 73 percent on a monthly basis. Interestingly, Germans were the most likely to spend on takeaways spontaneously, with over a third (36 percent) of those surveyed describing their takeaway habits as spontaneous.
Same Food, New Mindset
The primary recurring theme of this quantitative survey was hybridity—the merging of online and physical consumer experiences. For the food industry, consumers’ shifting mindset presents a significant opportunity to more creatively and precisely serve customers at several different channel touchpoints. Breaking the model might be what is not only required to survive these trying times but to thrive. Brands can recreate and redesign consumer strategies with new technology and methods while preserving the same food their clients know and love.
Martin Ryan leads EPAM’s Retail industry client portfolio. He has over 30 years of experience at leading strategy consulting and digital transformation service providers. With a technical background, he delivers advisory services for retailers and brands on their technology strategies, software selection and operating model, covering all aspects of retail, food service, eCommerce and D2C business models and operations.
