It seems that mergers and acquisitions in the restaurant industry are happening at an unparalleled pace. Large groups are buying up smaller chains, and some small chains are even buying larger ones—all in an effort to stay competitive during this challenging time.
More worryingly, the number of Chapter 11 bankruptcies being filed seems to have increased as well.
But what can you do about it? How can you safeguard your business and keep it primed for future growth?
The first step is to understand the key factors that are driving these events. Of the seven factors we’ve identified, six are outside of your control, but don’t let this deter you. Knowing about and preparing for these influences can set you apart from the competition.
The last one is entirely in your control and may be the most crucial factor in determining a restaurant’s success. It’s also the one that restaurants are most likely to disregard.
We’ll start with those first six factors driving restaurant industry change:
Some might argue that employee turnover is within a restaurant’s control. And things like salaries, any benefits, and the general work environment can certainly have a major impact. But the restaurant industry tends to see a high percentage of employee turnover no matter what perks are offered, and constantly having to manage staffing comes with the territory.
In most cases, employees are deeply affected by any kind of change to a business. But they’re often management’s last thought when major changes like mergers, acquisitions, and bankruptcies happen.
Remember, during a significant event for a restaurant, the employees are experiencing uncertainty firsthand … and conveying it to the customers they interact with. Communicating better with employees not only helps them feel more secure, but also makes them less likely to jump ship for another opportunity. Additionally, they will be less inclined to express uncertainty or frustration to your customers.
While it isn’t something a restaurant can control, weather very much affects business. From hurricanes to wildfires to snowstorms, any number of significant weather-related issues can crop up, depending on your location.
These unfortunate circumstances can also present an opportunity for a restaurant to connect with the people and make itself a “safe haven” for the surrounding community. Although a restaurant can’t control the weather, it can absolutely control what is done in response.
Each new generation possesses unique attributes. Generation Z, for example, consists entirely of people who have never been without the Internet and cell phones.
These “digital natives” have a high expectation for convenience and attach a sense of urgency to all needs and desires. They want what they want, when and where they want it. If a restaurant can’t keep up with that, it’s in trouble.
They’re also going to seek information on the Internet. Knowing this, a restaurant’s website and overall digital presence, including online reviews, should fuel the desire to purchase.
Along with the generational factor comes the technological factor. Rapid change in technology makes for more opportunities, but it also adds more challenges.
A restaurant needs to keep informed about technological developments in the back of the house (e.g., classic POS and accounting), the front of the house (e.g., digital menu boards and ordering), and revenue-generating applications (e.g., loyalty programs and CRM). The data gathered from all three areas provides the basis for the restaurant’s data analytics.
It’s a lot to stay on top of for restaurant owners and executives. Fortunately, a company like Paytronix can help a restaurant meet the challenges and capitalize on the opportunities.
Customers have more options than ever for dining, takeout, and delivery—and they get constantly bombarded by advertisements and promotions for them.
It’s imperative to get customers to choose your restaurant over the competition. One of the key ways to do so is to take a great interaction in the restaurant and extend it out into the marketplace so that it stays with customers and drives them to visit the restaurant again. We’ll dive more deeply into this in the seventh factor.
As was discussed in considering the newer generations, people seek immediacy. Customers expect to be able to consume a restaurant’s food when and where they want it.
Easy delivery and pickup have become major drivers in the restaurant industry, and that’s true even in the fine-dining segment. Being able to give customers the same high-quality food that they would be served in the restaurant—whether via takeout or delivery—is essential for keeping up with expectations.
While the first six factors are generally out of a restaurant’s control, this last factor is entirely within it—and may be the single most important element in determining a restaurant’s success.
The emotional connection a customer makes with a restaurant can’t be underestimated. Through carefully orchestrating the entire customer experience, a restaurant can nurture an emotional connection that will compel guests to come back—and to tell their friends.
For a more in-depth look at how to create this crucial connection, we offer an on-demand webinar called “Emotional Connection: The Missing Trait in the Guest Journey.”
In this free webinar, we discuss how to create that connection and give you an exact framework for the customer experience, covering everything from the moment guests arrive to the moment they leave. This proprietary template helps you identify your key challenges and opportunities, and you will then be able to make major impacts on the customer experience.
To get access to this framework and learn how to beat the competition by developing a strong emotional connection with your customers, click here to watch our free webinar now.