NEW YORK, April 14, 2015 (GLOBE NEWSWIRE) -- Even as lower gasoline prices and a somewhat improving economy have helped shift the focus for restaurant chains toward a growth mindset, a whole set of new and continuing challenges faces the industry going forward, including the need to innovate faster and more efficiently, to truly understand and capitalize on the unique buying behavior of millennials, and to leverage today's remarkable digital technologies both to engage with consumers and to better run the business. That's according to a study with a survey of more than 1,000 consumers released today by AlixPartners, the global business-advisory firm.
On the innovation front, according to the survey only 12% of consumers say loyalty programs are very or extremely influential in their choice of a restaurant, suggesting that promotional spending might better be targeted elsewhere. At the same time, 25% in the survey say "healthy" menu options are very or extremely important in their choice of a restaurant, up from 20% in a similar AlixPartners' survey last year and suggesting that there's plenty of room for innovation in the nutrition and wellness space for restaurants. There also appears to be more room for innovation in the bar, with almost half of consumers in the survey (49%) saying a restaurant's alcoholic-drink selection is at least somewhat important in choosing where to dine out.
Said Eric Dzwonczyk, managing director at AlixPartners and co-head of the Restaurant & Foodservice Practice in the Americas: "Innovation in restaurants today means reengineering menus to better target today's new consumer segments, reengineering promotions and marketing to engage those consumers, and reengineering restaurant operations to further reduce complexity."
Meanwhile, according to the survey 31% of millennials say menu options that are healthful are very or extremely important to them, up from 25% in last year's survey. And—in what could be a warning beacon to the fast-food sector—when asked to select the most important changes in their overall diet they are making to make it more healthful, 34% of millennials in the survey say they're eating less fast food, while 30% of all respondents said the same thing.
Millennials are very price-conscious, says the survey—51% in the poll chose price as one of the top three factors (out of a list of 15) for selecting frequently-visited restaurants. However, an even higher percentage (58%) chose "food quality" as a top factor, while the survey also revealed that Millennials say they're willing to pay more than 9% more for locally-sourced food and beverages in restaurants and more than 10% more for gluten-free items. Millennials also are willing to pay, says the survey, about 12% more for items recommended, online or otherwise, by other diners.
Said Adam Werner, managing director at AlixPartners and co-head of the Restaurant & Foodservice Practice in the Americas: "Capturing 'Millennial Nation' is going to take a deep understanding of the fact that millennials want to eat healthy and cheap at the same time, though they don't mind splurging on certain items, including on alcoholic beverages. And they appear also to be greatly influenced by word-of-mouth recommendations, which of course in today's world also means 'word-of-Internet,' meaning restaurants also need to have their digital strategies in order."
Speaking of their digital strategies, the AlixPartners study predicts that digital technology will fundamentally change the restaurant industry—but exactly how and when that will happen is still very much up in the air. For instance, 80% of those surveyed say mobile payments have no influence on their dining decisions, while 96% say they haven't used the highly-publicized mobile-payment app Apple Pay at a restaurant.
Whether those numbers are simply due to the newness of the technology or whether they're a trend remains to be seen, says the study. On the other hand, among those surveyed who've eaten at restaurants that have tabletop technologies such as an electronic tablet, 56% say electronic payment is among the top three benefits (of 10 choices offered) of such technology—and 22% say they ordered a menu item they hadn't considered prior to seeing it via the technology, with desserts and appetizers topping that list by a wide margin.
One technological trend the industry should embrace more, says the study, is advanced business analytics. This is an area, says AlixPartners, where the restaurant and foodservice industry currently lags many if not most other industries. The study details how advanced data-modeling techniques can revolutionize how restaurant concepts do everything from plan menus to site-select new locations and to more accurately predict the company's bottom line.
"Restaurants are sitting on top of more data that they probably realize," said Dzwonczyk. "Unlocking the power of that data can allow them not only to predict, but to shape, their own futures.
"Technology in the restaurant industry will play a big growth role in today's better-but-still-not-great economy," he continued. "But understanding technology and putting the right technology to effective use to solve real business as well as consumer issues will be key to restaurants' success."
The AlixPartners study also explored profit-margin pressures in the industry, merger-and-acquisition activity, wage issues and investor activism, and the survey also detailed such areas as dining frequency and per-meal spending in the year ahead.
About the Study
The AlixPartners North America Restaurant and Foodservice Outlook included a consumer survey conducted in February 2015 comprising 1,007 adults in the United States, ages 18 or over. The survey focused on consumers' current and planned frequency of dining occasions across the restaurant, convenience-store and ready-to-eat categories; expected spending on meals outside the home; preferred types of restaurants; and key criteria for restaurant selection. It also asked participants for their opinions on selective topics including health and wellness, marketing tactics and innovation in restaurant and foodservice offerings.
About AlixPartners
AlixPartners is a leading global business-advisory firm of results-oriented professionals who specialize in creating value and restoring performance at every stage of the business life cycle. We thrive on our ability to make a difference in high-impact situations and to deliver sustainable, bottom-line results. The firm's expertise covers a wide range of businesses and industries whether they are healthy, challenged or distressed. Since 1981, we have taken a unique, small-team, action-oriented approach to helping corporate boards and management, law firms, investment banks and investors to respond to crucial business issues. For more information, visit www.alixpartners.com.