Restaurant prices are rising due to record-high inflation. As a result, consumers are visiting restaurants less frequently, ordering fewer items or looking for cheaper alternatives, like cooking at home.
It is a difficult time for the restaurant industry. Almost two years of changing restrictions and a labor shortage have rattled operators. Rampant inflation could continue to depress demand. It has never been more critical for restaurant marketers to get their strategy right.
Despite the ongoing challenges faced by restaurants, the good news is people have not lost their appetite for eating out. And there is one thing that could tip their decision in your favor: deals.
People want restaurant deals
Our latest Restaurant Report has revealed a critical insight: Deals are often the defining factor of whether people choose to eat out (and where) or prepare a meal at home.
Sixty-one percent of people agree that rising prices make restaurant dining too expensive. And the effects of inflation are felt across the board, whether in the grocery or at the gas pump, prompting consumers to save money and be more cost-conscious.
And yet, consumers, especially the younger generations, are optimistic and want to enjoy their lives. There is a constant tug between wanting to be practical and having a little fun.
When it comes to where and what to eat, more than a quarter of people want the least expensive meal options when planning for the week. A good deal can help them with their dining decisions. As our restaurant survey shows:
- 51% note that deals are essential to save money on restaurant visits
- 54% say that coupons and discounts encourage them to try a new restaurant
- 61% share that a coupon, discount, or promotion is influential in their decision about which restaurant to order from
- 54% will spend more at a restaurant when they have a coupon
- 45% feel more positively toward a restaurant that offers coupons and discounts
Deals influence their choice to eat or take out and decide which restaurant to order from, including trying out something new. Coupons and discounts can boost the frequency of visits and repeat visits. And they can also help increase the average order size, addressing the tendency of guests to order fewer items to offset higher prices.
People love to eat at restaurants
Restaurant dining is a discretionary expense for consumers, and it is one of the first things they will cut back on when they need to save money. However, our report uncovers two strategic insights that restaurant marketers should leverage:
Younger consumers prefer to eat out
Older generations like Gen X and baby boomers are more practical with their spending. Not so with millennials and Gen Z. They are more likely to look to restaurants for their dinner decisions. For instance, only a third of baby boomers eat at a restaurant in a week compared to 41% of millennial and millennial parents. And 11% of Gen Z do not even cook at home, a greater proportion than other generations.
While many will dine out or pick up takeout, 36% of millennial parents and 32% of Gen Z will not do so without a discount. Deals drive the decision to eat out and which restaurant to go to. More than other consumers, these younger generations are in the market for a dining discount. Seventy-two percent of millennial parents and 61% of Gen Z are influenced by a coupon, discount or promotion when choosing which restaurant to order from.
Eating out is often spur of the moment
People usually plan their meals for the week. However, eating or taking out is often unplanned. More than half agree that eating at a restaurant is typically a spontaneous decision.
They are busy, or perhaps just not in the mood to cook, and decide on the fly that they need a break from cooking at home. Our restaurant survey found 48% of consumers decide on the same day to eat out. Sixty-nine percent choose to order a pizza the day of, while 61% order takeout from restaurants other than pizza.
This also applies to the affluent — 76% percent of affluent consumers impulsively decide to order pizza. Fifty-one percent choose to go to a restaurant on any given day.
Stay on their mind
Providing coupons, discounts and promotions will not help your restaurant if customers do not know about them. You must meet your customers where they are. The best approach is to take an omnichannel strategy.
Promote your deals online
Diners are looking online and via mobile for deals and reward programs to help them make snap decisions when it comes to eating out. Consider the findings from our survey:
- 46% use the internet to search for restaurant coupons or discounts (56% of millennials, 58% of millennial parents and 51% of Gen Z)
- 49% use mobile to save on restaurant dining (68% for millennial parents versus only 33% of baby boomers)
- 26% of millennials and 28% of Gen Z are influenced by social media recommendations
Now is not the time to cut back on your marketing spend. Use your digital platforms, loyalty programs, and mobile ordering to get in front of your customers, keep them engaged and drive their dining decisions in your favor.
Include offline in your campaigns
With so many advertising messages vying for their attention online, you must include offline channels to stand out. It may seem old school but people, including younger generations, look to print ads for deals.
- 42% of consumers use print ads to help them plan restaurant visits
- 65% of millennial parents and 51% of Gen Z will look through print ads for restaurants
- 23% of Gen Z will go online after seeing a print ad to order at a restaurant (versus just 9% of baby boomers)
- 21% of consumers will go online for a coupon or discount after seeing a print ad
- 72% of Gen Z and 74% of millennials will, after seeing a print ad, go online to review a menu or download an app
Taking an omnichannel approach to promoting your deals requires making the offline-online experience consistent and seamless.
Meet customers where they are
Learn more about what restaurant customers want and how you can best meet their needs. Download our Restaurant Report.
Matthew Tilley is executive director of marketing for Vericast and leads content marketing for the company. He has more than 20 years of experience in digital advertising and consumer promotions to develop, communicate and distribute ideas to make modern marketers more effective.