The quick-service restaurant industry has changed significantly over the last few years. The way customers interact with restaurant brands has evolved to reflect increasingly busy lifestyles, a search for instant gratification and the wish to combine dining out with the comfort of home.
Many brands have had to rethink their customer experience to actively engage with diners online, while also attracting them to physical dining spots. From equipping physical restaurants with tech like tablets and touchscreens to turning to off-premises business with food delivery apps like Foodpanda or Grain, playing on all fronts is the new normal.
While it might not seem like the time to think about driving diners to restaurants due to the Covid-19 pandemic, this crisis will pass. And when restrictions are lifted, there will be steep competition from other restaurant brands urgently trying to drive customers back to their dining spots. To stand out, think beyond the here and now to prepare for business recovery.
Why should you focus on driving customers to your physical restaurants?
The quick-service restaurant industry has a lot of potential. In 2019 alone, the total sales value of food and beverage services in Singapore was estimated at a staggering SG$916 million. According to the IHS Markit study commissioned by S4M, restaurants will dedicate 64% of their ad spend to drive-to-store by 2023 to get diners through their doors. So, while tactics may evolve to fit consumers’ needs and align with technological advances, the number one objective for the industry remains unchanged – getting customers into physical dining spots.
Changing digital advertising tactics from a branding focus to a drive-to-store campaign is a sensible solution. Drive-to-store is any form of advertising with the direct intention of increasing foot traffic to physical store locations. Leveraging drive-to-store doesn’t mean forgetting about online delivery services – far from it. It simply means developing a marketing strategy that focuses on ad spent that drives visits to restaurant locations first and foremost.
Why is drive-to-store the way to go?
Singapore has a growing drive-to-store market – predicted to amount to 67% of all local retail advertising spend by 2023. What’s more, restaurants will overtake cosmetics and beauty as the leading drive-to-store retail industry with 27% of ad spend – nearly SG$130 million – by 2023 according to an IHS study. This is no small feat considering the size of the beauty industry in Asia.
Restaurants are turning to drive-to-store advertising because it enables them to measure the results of their campaigns on a more granular level than traditional advertising. Restaurant marketers state the total number of visits to their dining spots as the most important factor for investing. It’s closely followed by the number of incremental visits - i.e. visits directly generated by a campaign - and sales.
Knowing this exact number of incremental visits is a decisive argument in favour of drive-to-store for restaurant brands. It represents a direct return on their ad spend, and is an effective way for them to measure the success of their campaign.
How can restaurant brands drive visits efficiently?
Although Singapore is traditionally a strong TV ad market, retailers have expressed a preference towards digital media, which is set to outpace it to represent 58% of the drive-to-store market by 2023. This is because digital can measure both overall visits and incremental visits, giving brands a detailed view of the performance of their ad spend. Mobile will take the lead as the most effective drive-to-store channel to reach 14% by 2023. Combined, TV and Digital will take an 80% share of this market by 2023 according to IHS Markit.
By leveraging digital channels for drive-to-store, you’ll be able to effectively measure real, tangible business KPIs like total visits and incremental visits. The move away from vanity metrics like frequency, impressions or clicks to measurable KPIs will help marketers meet and exceed their business objectives like increased revenue and sales.
QSR brands' number one priority is to drive customers to their restaurants. The improved quality of customer data and insights provided by drive-to-store is a capital argument in its favour for brands looking to get ahead. Leveraging mobile has become a key strategy to engage with customers easily and drive incremental store visits all the while hitting measurable targets like increased visits and sales. While quick-service restaurants might be ramping up their digital branding and performance strategies, their priority remains driving customers to their restaurants.
James Rogers is managing director APAC at S4M.