jan-2010-amex-what is social media good for

7/31/2019 Jan-2010-AMEX-What is Social Media Good For

1/61 2010 American Express Marke

M Brief Juy 2010

InsIde MarketBrIef

Market BriefT r a c k i n g a n d i n t e r p r e t i n g r e s t a u r a n t t r e n d s

2010 American Express MarketB

MarketBriei puc by tchmic, Ic., h ig pvi cuig cum ch h u iuy.

t f u bu m amic ep vic hp yu gw yu bui, g www.micp.cm/u.

FSR Touchpoints. .............................

The Breakast Boost ....................

Juy 20

HeaVY restaUrant UsaGtrend BaroMeter

Editors note: Look or several up-tometrics that shed light on key industry trpresented in this space in each moMarketBrie. For comparison, you canpast Trend Barometer metrics onlin

1

www.technomic.com/amex

In the past year, the percentage

consumers who dine at limited-se

restaurants two times a week or mhas dropped by 11 percentage po

going rom 29% in November 200

18% in November 2009. For a while,

was considered the new low or L

(down rom highs in the 40-44% rang

summer 2007), but recent readings h

proven this theory wrong.

At ull-service restaurants, the dro

heavy usage has not been as deep

the past year, but the 8% reading is

lowest on record since tracking bega

May, 2007.

scil Mi: Wh I G f?

Social media, a term used to dene online platorms where users can exchange news, ideas, music, video,etc., is no longer a novel concept. Scores o web users go to Facebook, LinkedIn, YouTube, etc. each day,hour and sometimes minute to interact with riends, amily, colleagues, riends o riends, and more.

When it comes to restaurants, social media has been heralded as an inexpensive marketing tool especially

valuable to smaller companies that can reach massive audiences without incurring massive bills. Beyond

marketing, however, there are maniold ways in which online users can relate to the restaurant industry;

below, we examine a ew and nd out why they are popular.

olloWInG restaUrants Can lead to BeneIts

Approximately three-quarters (73%) o consumers indicate they used social media in the previous 30 days,

per a November 2009 online survey o 500 consumers. O those consumers who used it, 30% report that

they use social media websites to nd, riend or ollow restaurants.

Why do consumers ollow restaurants on social media sites? Primarily to nd out about promotional deals

(53%) and to get coupons (51%). More than a third o consumers indicate they ollow restaurants to nd out

about new menu items (36%), and another quarter do so to learn about new restaurant locations (24%).

onlIne reVIeWs are a PoPUlar tool

Overall, nearly two o ve consumers (39%) indicate they go online to get restaurant reviews. Per the

chart on the next page, the top websites they report visiting or such inormation include Google (30%),

Citysearch (9%), Bing (8%), Zagat (5%) and Yelp (4%). O the sites just mentioned, only Zagat requires a

paid subscription to read ull reviews. Also noteworthy is that neither Google nor Bing are sites dedicated

to either restaurants or reviews, yet they rank at the top o consumers consideration sets or accessing

restaurant reviews. This implies that most people are not yet amiliar enough with restaurant review sites

to go there directly.

29%

11%

29%

13%

22%

9%

18%

8%

Nov

08

Jan

09

Jun

09

Nov

09

Hvy ru UgTwo times a week or more

FSRsLSRs

No

70%

Yes

30%

d Yu ev U sci MiWbi i, i

w ru?

53%

51%

36%

24%

16%

To fnd out aboutpromotional deals

To get coupons

To fnd out aboutnew menu items

To learn about newrestaurant locations

To share their opinionabout restaurants

Why th Cumw ru

sci Mi si


2/6

M Brief Juy 2010

Consumers indicate that their main reason or reading online reviews is to learn about the restaurant in

general (77%). Approximately two o ve are making sure its worth the money to go to the restaurant (41%)

and learning what dishes are best to order (38%).

reserVInG onlIne Is stIll CatCHInG on

Relatively ew consumers (14%) indicate they have made restaurant reservations online. Still, as used on a

directional basis, the resulting data is insightul. O those who have booked online, hal (50%) report theyve

used OpenTable. About one-third o consumers (34%) indicate theyve used a restaurants own, proprietary

online reservation system, while one o ten (10%) has used DinnerBroker and even ewer (7%) the new Rez

service by Urbanspoon.

When asked about the primary advantage o using an online tool to make a restaurant reservation, 44% o

consumers report that they chiefy like the ability to make the reservation when it is most convenient or them

to do so (which is not always during business hours). Not having to speak with anybody (16%), never being

put on hold (12%), getting an instant conrmation (12%), having all o the data entered correctly or the

reservation (6%) and earning points toward uture dining (6%) are other reasons why consumers indicate they

like to make reservations online.

2 2010 American Express Market

77%

41%

38%

Learn about therestaurant in general

Make sure its worththe money to go there

Learn what dishes arebest to order

tp r Why Cum r oi ru rviw

30%

9%

8%

5%

4%

Google

CitySearch

Bing

Zagat

Yelp

tp Wbi U l Up ru rviw% of consumers who use each website

Base = Consumers who use online reviews

50%

34%

10%

7%

OpenTable

A restaurants ownonline system

Dinner Broker

Rez by Urbanspoon

tp ru rvi si% of consumers who have used

Base = Consumers who have made online reservations

Pciv avg Migrvi oi

Can makereservationwhenever

is mostconvenient to

do so, 44%

Other,4%

Earn points towarduture dining, 6%

Personal inormation alwaysentered correctly, 6%

Instantconfrmation, 12%

Never puton hold,

12%

Do not haveto speak withanybody, 16%

When asked about their dining

intentions or the week ahead, 36%

consumers indicated that they inten

to dine out at least two times at an L

and 22% o consumers indicated same regarding an FSR. While the

between FSR and LSR intentions

percentage points here) is similar to w

we see or reported usage (see the Tr

Barometer on page 1), the gap betw

consumer intentions or the week

come and reported behavior rom

week prior is quite large (36% vs. 1

or LSRs and 22% vs. 8% or FSRs).

As this trend barometer develops

time, it remains to be seen whe

intentions are always ar greater t

actual outcomes, or whether cur

economic conditions make this

wider than it otherwise might be.

I Hvyru Ug

Dining-out intention, for coming

week, two times a week or more

36%

22%

Nov 09

FSRsLSRs

Intended HeaVYrestaUrant UsaGetrend BaroMeter

NE



M Brief Juy 2010

3

Bottom Line: Those consumers who use social media to ollow restaurants primarily do so to learn about special deals. Asthis platorm gains prominence, however, it is expected to play an increasingly important role in other areas as well, such asrestaurant reviews and reservations. By all counts, it is time or operators who have not already done so to start embracing socialmedia and discovering how it can help to develop relationships and build business.

BUsIness-BUIldInG IMPlICatIons:

I you are unsure o how to use Facebook or Twitter as a marketing tool, consider riending independent restaurants or bakeries onFacebook, or ollowing the tweets o ches, ood vendors and restaurants. In this way youll get a sense o how they keep their audiences

hooked, and pick up examples you can use when you get your own social media eorts going.

Are you aware o whats being written about your establishment on restaurant review sites? I so, have you taken note o the comments and

made eorts to address negative eedback rom your customers? While not every issue raised is valid, i you note a trend in what youre

reading about your place, it may be a cue or you to make some changes and address customers concerns.

Online reservation systems are likely to grow in the near uture as they oer time-strapped users convenience. For a small ee, your

restaurant can join an online reservation system and garner additional exposure, thereby bringing in additional customers and revenue. I

youre not already oering online reservations, its an idea well worth looking into.

fsr tuchpi

The concept o value is never ar rom most consumers minds these days, especially when it comes to dining out. How value is dened variesrom person to person, but on todays dining scene, 85% o consumers agree that good service and a pleasant restaurant environment arepart o what value means to me, while only about hal that number (44%) agree that value means lots o ood or a low price. I service and

restaurant environment are so essential to consumers idea o value in the dining sphere, then it is worth exploring what particular aspects o

each resonate most strongly with them. Evaluating touchpoints, or key contact areas between the restaurant concept and the customer, is one

method by which to gather such inormation.

Pre-Meal reqUIsItes

At ull-service restaurants, where service is a major part o the dining

experience, there are many touchpoints hit upon even beore orders

are taken. O primary signicance to diners is seating, and how timely

it is; 93% o consumers indicate it is very important or important that

their reservation be honored on time or that wait times given by hosts/

hostesses be accurate. Nine o 10 diners also report that sta with good

product and concept knowledge, as well as servers that greet guests

promptly upon being seated, are vital (91% and 90%, respectively).

Other elements that actor strongly in the pre-meal equation include

a host/hostess who is warm and inviting (88%) and receiving a prompt

greeting upon arrival at the restaurant (84%).

dUrInG tHe dInInG HoUr

When it comes to the actual mealtime, good service really does set

the tone. Consumers overwhelmingly indicate that pleasant, riendlyservice is important to them (94%). Beyond that, consumers report that

timing should be correct between meal parts (87%), the server should be

respectul o conversations going on at the table and not interrupt them

(81%) and the server should stop by to veriy during each course that

diners are happy with their selections (80%).

Wh M M sr di: aiv oigTop two box responses = very important or important*

93%

91%

90%

88%

84%

Seating is timely

Sta has good product,

concept knowledge

Server is prompt togreet you once seated

Host/hostess iswarm and inviting

Receive a promptgreeting upon arrival

*Scale o 1-6 where 6 = very important

94%

87%

81%

80%

Service is pleasant,riendly

Timing is correctbetween meal parts

Server is respectul oconversations at table

Server verifes satisactionwith meal parts

Wh M M sr di: M svicTop two box responses = very important or important*



4/64 2010 American Express Market

M Brief Juy 2010

4

tHe oVerall exPerIenCe

O course, the dining experience consists o more than just the meal.

Ambiance is a large part o dining out as well, and encompasses

many dierent acets. To that point, more than nine o 10 consumers

(93%) indicate that eeling welcome and comortable in a restaurant is

important to them; part o that sentiment can be derived rom knowing

that problems, i they do arise, will be resolved quickly and quietly

(93%). Responsiveness to special requests, be they about the meal,seating arrangements or anything else, are deemed important by 91%

o consumers, and almost as many indicate the same when it comes to

handling check/payment matters in a timely manner (89%).

ConsUMers are Clear on WHat Matters Most

Based on the three previous charts, it may seem that virtually every aspect o service and ambiance is o high importance to diners. In many

ways, this is true. Nevertheless, there is a pecking order as to which things matter most. When asked what three actors would most likely

cause them to not return to a restaurant, consumers indicated that unriendly and unpleasant service (53%), not being made to eel welcome

and comortable (35%) and poorly handled problem resolution (28%) topped their lists. While avoiding those three pitalls doesnt or certain

imply that customers will return, running into just one or all o them does equate to a decent chance that they wont.

Bottom Line: Most diners at FSRs eel that value stems rom a combination o attentive service and good, plentiul ood. Itsimperative that restaurants shine on both ronts, because i the FOH (service, ambiance) portion is not smooth, customers wontreturn to experience how good the BOH (ood) part is.

BUsIness-BUIldInG IMPlICatIons: No matter how hard everybody tries, mistakes will undoubtedly happen. Empower your sta to make amends on behal o the restaurant

(e.g. a ree dessert i the wait is longer than promised or no charge or a side dish that arrived well ater the entrees) to engender a sense o

goodwill among your customers.

I your establishment handles a large volume o customers, consider investing in tableside credit card machines, which also accept PIN-

based debit cards. With this service, customers get more payment choices, higher security and aster checkout, and waitsta can serve more

people quickly, while making ewer trips to payment terminals.

Providing the right service and ambiance derives in large part rom having well-trained, knowledgeable employees. Show interest in your

sta and train them on everything rom service to technical aspects. The more you invest in them, the brighter they, and your operation,

will shine.

th B B

In the past ew years, breakast has become a hotbed o activity or restaurants, retailers and manuacturers striving to increase revenueand better establish themselves in the market. In todays increasingly competitive oodservice environment it is vital or operators andsuppliers to stay on top o drivers o change in the breakast segment, in order to more eectively identiy opportunities or growth in this

important daypart.

To assist oodservice executives in better understanding consumer preerences, needstates and attitudes associated with the morning

meal, Technomic commissioned an online survey o 1,500 consumers in September 2009 to gauge their breakast preerences, attitudes and

purchasing behavior.

93%

93%

91%

89%

Feel welcome and comortablein restaurant

Problems are resolvedquickly and quietly

Responsiveness tospecial requests

Check is received/paymenthandled in a timely manner

Wh M M sr di: ambic diTop two box responses = very important or important*


tp c h Wu Cu di n ru sr

53%

35%

28%

Service is not pleasant and riendly

Not made to eel welcome andcomortable at restaurant

Problem resolution not handled well



M Brief Juy 2010

5

ast serVICe & aMIlY Matter Most or Breakast loCatIons

Consumers indicate that during the week, they visit ast-ood restaurants more or breakast than they do any other type o restaurant. While a

third o consumers (33%) patronize these locations or weekday breakast, the act that nearly as many consumers (29%) visit these locations on

the weekend speaks to the importance consumers place on ast service and portability at breakast, regardless o the week part.

On the weekend, consumers preer amily-style restaurants above all other types o concepts; 35% o consumers report that they purchase

breakast at these locations. Family-style restaurants are also airly popular or breakast during the week, with almost a th o consumers (17%)

saying they patronize these locations at least occasionally.

Despite the wide range o breakast options available at ast-casual restaurants, just 9% o consumers indicate they visit these locations on an

occasional basis (weekday or weekend). This is probably related to the act that ast-casual concepts do not oer as many locations or may not

keep hours as early as other types o restaurants do. On the fip side, it suggests that the ast-casual subsegment has ample room or growth in

the breakast daypart.

Breakast BUsIness exPeCted to reMaIn steadY

When asked about their away-rom-home breakast purchasing behavior in the coming year, the majority o consumers indicate they dont expect

too many changes. Overall, more than three o ve consumers (63%) report that they expect to make the same amount o breakast purchases

rom restaurants and other oodservice locations in the coming year, while 29% indicate that they will purchase breakast away-rom-home less

oten and 10% more oten.

Although ew consumers say they intend to purchase breakast away rom home more requently in the coming year, such responses skew toward

younger consumers. Fourteen percent o those aged 1824 report that they will probably be sourcing breakast rom restaurants and other oodservice

locations more oten in the coming year, compared to just 4% o those over the age o 55. Consumers who indicate they will be purchasing breakast

away rom home less oten in the coming year are most plentiul in the 35-44 age range (31%) and least plentiul in the 25-35 age range (25%).

33%29%

35%17%

15%15%

12%7%

11%9%

9%9%

7%7%

5%4%

m Which h wig lci yu Puch B l occiy (vy90 y) duig h W (Myiy) h W (suy & suy)?

Fast-ood restaurant

Family-style restaurant

Donut shop

Gas station or convenience store

Coee shop

Fast-casual

Bagel shop

Juice bar/smoothie shop

WeekendWeekday

I h Cmig Y, d Yu thi Yu Wi b Puchig B m ru oh vic lci M o, l o, h sm amu Yu a nw?

By age

14%

29%

57%

10%

25%

65%

10%

31%

59%

7%

30%

63%

4%

29%

67%

Same amountMore oten Less oten

1824 2534 3544 4554 55+


6/66 2010 American Express Market

M Brief Juy 2010

Good taste Is ParaMoUnt In PUrCHase deCIsIon

Regardless o the day o the week, consumers say that an appealing favor is crucial to their decision o what to purchase or breakast. An

items taste was ar and away the most important ood attribute or consumers both during weekday (84%) and weekend (88%) occasions. That

said, consumers seem to expect a lot more than just good taste when dining away rom home or breakast. More than three o ve consumers

indicate that it is important or breakast items to be high in quality (64% weekday, 71% weekend) and lling (63% weekday, 69% weekend).

Consumers also place a high importance on customization during weekday (54%) and weekend (57%) occasions.

It is interesting to note that, with one slight exception (the item is healthy attribute), consumers consider most ood attributes at restaurants

and other oodservice locations more important or weekend breakast occasions than or those that take place during the week. These results

suggest that on weekdays, consumers may be willing to give up some level o quality, reshness or customization as long as the item still tastes

good. During the weekend, however, consumers may be willing to spend more money and thereore choose to visit ull-service restaurants or

higher-quality, made-to-order breakast items.

Bottom Line:Much o the restaurant breakast business hinges on small details, including when the purchase occasion occurs(weekday vs. weekend) and who is doing the purchasing (age group). The more that operators can understand about theircustomer base, the better they will be able to anticipate their needs and exceed their expectations.

BUsIness-BUIldInG IMPlICatIons:

I youre a ull-service, amily-style restaurant operator, consider building breakast trac during the week by taking cues rom the quick-

service segment: oer more options that are aordable, portable and served up ast. IHOP is doing this with its prototype Ca and Express

units, which are more like Starbucks than traditional IHOPs. Dont orget to leverage the FSR advantages o taste and quality, though, which

should be consistent even with a speedier service model.

Keep in mind that beyond maintaining your current customer base, you might also strategize about how to obtain new breakast business rom

consumers who are cutting back at particular types o restaurants. For example, many o the consumers who say they will visit ast-casual or

ull-service concepts less oten may be trading down to ast ood or retail products. I your operation can provide a service or product to meet the

needs o those who are trading down, such as premium coee without a premium price, you might be able to pick up a new customer base.

Both operators and manuacturers may want to develop products and marketing messages that resonate with young consumers, since this

demographic is most likely to increase its away-rom-home breakast purchase requency in the next year. Oering vegetarian, vegan or

locally sourced ood options are all good ways to attract that group. Operators can also think about making breakast options more availableto this young demographic by adding units on or near college campuses.

6

84%88%

64%71%

63%69%

54%57%

53%60%

48%47%

WeekendWeekday

Item tastes good

Item is high in quality

Item is flling

Item is made-to-order...I cancustomize it

Item is prepared resh (resh-bakedbread, resh-squeezed juice)

Item is healthy

Impc Picu aibu Wh Puchig B Im duig h W W

Top two box responses = important or extremely important

Editors note:Except where otherwise noted, source o data is a periodic overnight survey o 500 consumers representative o the U.S.population, conducted via the Internet by Technomic, Inc. in November 2009. Margin o error 3.4%. The Breakast Consumer TrendReport is based on an online survey o 1,500 consumers in the U.S. conducted in September 2009. Margin o error 2.5%.

About MarketBrief Through MarketBrie, American Express provides restaurants with research-based analysis o key industry developments. Data is collected and analyzed by TInc. To subscribe or fnd past issues o MarketBrie go to: www.technomic.com/marketbrie I you have questions, comments or topic suggestions, please contact Kimberly

Perman at [email protected] or directly at (312) 506-3831.

To fnd out about more American Express services to help you grow your business, go to www.americanexpress.com/restaurantresources.

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