It comes as no surprise that the restaurant industry is in a slump. TDn2K’s July Restaurant Industry Snapshot reported that same-store traffic for July 2018 fell by 1.8 percent from July 2017’s data. That’s in addition to the 4.8 percent decline that was reported in July 2017 from the previous year.
Declines in restaurant industry traffic are partially due to increasing competition among restaurant segments and brands, as well as competition outside the industry.
“According to the 2016 U.S. Bureau of Labor Statistics report, consumers are spending more on meals prepared outside of the home but there are many more options to choose from today,” says Jaime Friedman, PepsiCo insights director, foodservice. “New channels have emerged, such as meal kits and food trucks, and traditional channels are blurring, such as the ‘grocerant’ concept—restaurants in grocery stores.”
These shifts are further driven by changing demographics, such as an aging population and growth in single households and multicultural representation, as well as shifts in what diners want. The fast-casual segment, for example, is seeing growth driven by millennial consumers, while the full-service segment continues to face difficulties in generating traffic.
“Changing consumer preferences—such as trends towards health and wellness and ever-accelerating demand for convenience and speed—contribute to a climate of unprecedented disruption, challenging operators to refine or even rethink traditional approaches,” Friedman says.
With so many forces exerting pressure, there is no question that restaurants must adapt in order to generate more traffic and survive. This is why PepsiCo Foodservice conducted a large new study to gain insights into consumer decision making, particularly along the door to door journey as they decide where to eat out. By better understanding how consumers choose where to go, PepsiCo Foodservice can help partners to drive more targeted traffic to their doors.
“One of our key findings was that the consumer journey in navigating restaurants is driven by more than just food,” Friedman says. “Restaurants actually fulfill consumer needs and desires for structure in today’s complex world. Amid our always on lifestyles, they help carve out space for consumers to reclaim some time for themselves. We found that the type of ‘time mode’ is an important driver of the decision behind eating out and have quantitatively identified 12 different kinds of time modes that explain consumer decision making in the restaurant channel.”
For example, Friedman says consumers are on “responsible time” during the work week, when they are balancing obligations. During this period, people turn to restaurants to fulfill needs, such as feeding kids, or to take a quick break. Logistics becomes a key driver of where people decide to eat out in this time mode. During times when people are more focused on family and friends, or as PepsiCo Foodservice calls it, “care time,” they want to demonstrate care for themselves and others and are more motivated by the experience vs logistics of choosing a restaurant.
“PepsiCo Foodservice wanted to deepen its understanding of the consumer journey in restaurants, ultimately to inspire a new way of looking at the consumer journey and support our partners in finding new ideas to meet the needs of the various consumer ‘moments’ they are serving,” Friedman says.
By assessing what diners want out of a restaurant experience at the various times they visit, restaurants can better anticipate consumers’ needs. This helps ensure brands meet diners’ expectations and attract more visitors.
“For consumers who are in the ‘care time’ moment and wanting to enjoy quality time over a meal with family or friends, PepsiCo Foodservice offers an enhanced fountain experience with classic favorites like Pepsi-Cola and Mountain Dew, as well as enhanced experiences like adding flavor shots to a beverage, or trying our premium craft soda line, Stubborn,” Friedman says.
In another example, Friedman says guests who visit on a workday are looking for faster service when they choose a restaurant. Restaurants can appeal to these customers with curbside delivery and product packaging, such as bottled beverages, that offer convenience for time-strapped customers.
“By understanding the underlying context of the restaurant visit and the drivers of the various consumer ‘moments,’ we can work with our partners to better meet the needs of guests,” she says.