Restaurant Marketing Trends: US Foodservice Loyalty for 2022

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The Restaurant Industry in 2022: Challenges and Opportunities

To survive, it is non-negotiable for foodservice operators to focus on building and maintaining consumer loyalty. »

—Larry Meador

LAKE MARY, FLORIDA, USA, Aug. 2, 2022 / — After months of inconsistent and uncertain restaurant visits, the restaurant industry continues to grapple with labor crisis, chain issues of supply and the impact of inflation, all of which compromise the ability of restaurants to meet consumers’ increased needs for high-quality offerings and services at competitive prices. “To survive, it’s non-negotiable for foodservice operators to focus on building and maintaining consumer loyalty,” said Larry Meador, CEO and Founder of evok advertising. Most restaurants approach the effort by launching loyalty programs and rewarding their loyal customers in innovative ways.

Restaurant Loyalty Trends 2022
The restaurant industry continues to face labor challenges and supply chain issues that have worsened due to the conflict in Ukraine. Inflation, which has been high for decades, adds another significant hurdle to the industry’s recovery, negatively impacting both restaurant profit margins and consumer discretionary restaurant spending. From 2021 to 2022, the food-out-of-home CPI increased by more than 7% for the FSR and LSR segments, while food-in-home increased by 10%. This economic climate makes it difficult for smaller players in the industry to invest in restaurant technology and compete with the rest of the industry. Higher food costs at home and away will also discourage consumers from dining out often at a time when most restaurants need regular visits to stay in business. However, dining out may be a more affordable and convenient option for many consumers given the high cost of groceries.

Although consumers were excited to eat out more often in 2022, sharp increases in food prices both at home and away dissuaded them from doing so. Restaurants emerged as the main discretionary category in which consumers will cut spending given inflation. Consumers will opt for cheaper LSRs, limit dining out to fewer and more special occasions, or cook entirely at home. Restaurants already operating with low profit margins will not be able to offer many offers and discounts, further losing customers to more price-sensitive consumers.

From February 2021 to 22, employee quit levels in the accommodation and food service industry increased by more than 33% and continue to rise. While many foodservice operators have taken steps to attract talent at the end of 2021 by offering higher salaries, expanded benefits and more flexibility, their efforts are failing in the face of high inflation for decades. Higher costs have added another layer of uncertainty for operators who already face inconsistent tours, reducing opportunities for workers to tip and increasing the risk of dismissal. Other industries are also experiencing a labor crisis, so leisure and hospitality workers are finding more stable and better-paying opportunities elsewhere. On the consumer side, these issues compromise restaurants’ ability to deliver high-quality dining experiences that consumers are looking for after months of little access to dining opportunities.

In addition to offering consumers a way to save money while still dining out, loyalty and subscription programs offer foodservice operators a way to study buying and shopping habits. build personal connections with their customers that will go a long way in building consumer loyalty.

Most consumers find loyalty programs easy to use and expect to access them digitally through mobile apps and restaurant websites. However, at a time when consumers are already seeing necessary but rapid technological changes in the restaurant industry (e.g. food processors, digital kiosks, tablets), digital-only loyalty programs may heighten fears consumers regarding data privacy and further discourage tech-averse consumers. to participate in loyalty programs, regardless of the economic benefits they provide. About half of consumers consider ongoing discounts to be better than loyalty program rewards, suggesting that loyalty programs that require little or no effort from consumers and help them passively earn rewards or discounts will succeed. Operators will need to ensure that their loyalty and subscription programs are easy to access and use and that they can reward consumers who place orders in person or over the phone.

Loyalty programs are quickly becoming ubiquitous in the restaurant industry, especially in the LSR segment. In most cases, loyalty programs award consumers points per dollar spent that can be redeemed for discounts or other benefits on future orders. Most consumers find these monetary rewards to be the primary motivators for joining loyalty programs. However, restaurants can gain a competitive advantage by using loyalty apps and websites to deliver more personalized consumer experiences that: Build on their order history and habits Offer rewards tailored to their needs and give them flexibility and control in how they redeem their rewards.

Loyalty programs have the potential to provide restaurants with valuable consumer data and a set of frequent and loyal consumers. However, operators can also use loyalty programs to further strengthen their brands. Lateral expansion into new revenue streams by introducing apparel, accessories, housewares, and restaurant brand experiences can significantly increase brand awareness and help drive organic customer acquisition. Operators can also use social media platforms like Discord and Patreon to create online spaces where their most loyal customers can engage as a community. Not only do consumers expect most restaurants to have loyalty programs, they are open to rewards that go beyond discounts on future orders and are interested in merchandise rewards. Using loyalty and subscription programs to make a personal connection with loyal customers will go a long way in making customers feel special.

Restaurant Loyalty Trends 2022
High quality menu offerings are non-negotiable
There is no substitute for high-quality food and beverage offerings when it comes to building consumer loyalty. Convenient location, competitive pricing, and high-quality service are other retention factors where operators can differentiate themselves. Most consumers have easy access to a variety of loyalty programs; restaurants that cannot meet the aforementioned non-negotiable loyalty requirements will quickly lose customers to competition, especially given the similarity of loyalty program offerings in the restaurant market.

Consumers appreciate flexibility and control over how they are rewarded for their loyalty
While most consumers prefer monetary loyalty rewards (i.e. ongoing discounts or credits for future orders), there is also strong interest in programs that reward them with branded products from restaurant or donations to a cause. These benefits help foodservice brands build a personal connection with their loyal customer base, who, in turn, can act as brand advocates, increasing brand awareness and making it easier to acquire new customers.

Adapting to changing consumer needs is crucial for retention
Operators should use consumer data available to them through loyalty and subscription programs to deliver a highly personalized experience. In addition to studying the buying habits of a restaurant’s customers, operators can also take advantage of the overwhelming presence of Millennials and Gen Z on social media. Engaging in social listening will help brands stay ahead of emerging consumer tastes, preferences and responses to menu and operational changes in the restaurant industry.

Larry Meador
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