Big data and a 'better gut feeling'

Food-service businesses: looking to strengthen their grip on consumers

Restaurants, bars and catering venues that still rely on friendly service and high-quality food and drink alone are in for tough times: businesses that know their way around big data can attract much larger numbers of customers. Rabobank analyst Sebastiaan Schreijen: 'The power is shifting to people who probably can’t be trusted around a skillet, but who do know what it takes to get consumers moving.'

Dutch people spend around 35 billion euros in supermarkets and speciality shops each year on food and beverages for home consumption, plus another 18 to 20 billion euros on food and drink consumed away from home. This may include anything from a quick croissant at a railway station or a smoothie in a hospital canteen to lunch in their company cafeteria, a kebab and chips at the football stadium or a relaxing night out at a Mexican restaurant. The Dutch food-service industry is made up of some 50,000 companies and establishments involved in the preparation, serving and delivery of food, and many of them happen to be Rabobank customers.

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Tailoring activities to customer behaviour

If we are to believe Dutch Rabobank food analyst Sebastiaan Schreijen, it is big data, rather than the latest recipes, that will take the world of food-service by storm in the coming years. In early 2016 Rabobank discussed this trend with hundred food-service professionals during a meeting of the Foodservice Network Nederland (FSN). Schreijen and his colleagues Martijn Rol and Hans van Haaren used the input from this meeting to set out Rabobank’s ideas for using big data in food-service.

'Big data' in this context refers to the process of aggregating large amounts of data to learn more about their customers' behaviour. Companies can then use the information gleaned from this data to improve and personalise their products and services. Schreijen: 'The most successful bar and restaurant owners have a really good gut feeling for what their customers want, what the effect might be of certain weather conditions or events and how to work around those variables if necessary. Big data supports them by providing them with concrete information, based on which they can then make decisions on aspects such as menus, ingredients, prices and special offers. Fast-food restaurants in the United States, for example, have turned to big data analytics to optimise the drive-thru experience for their customers by anticipating their order based on the type of car they drive. They also use big data to find out the effect of the weather on their sales. Big data analytics technology is becoming less expensive, making it more accessible to a larger number of businesses.'

Food

Smartphone: a modern-day 'compass' for consumers

The greatest challenge for the food-service industry is using big data analytics to attract new customers. Whereas many consumers, when it came it came to dining out, used to play it by ear or rely on word-of-mouth advertising, today they are increasingly likely to be guided by their smartphone as a sort of modern-day 'compass'. As Schreijen puts it, based on conversations he has had with business owners: 'The number-one recipe for businesses to survive in this industry is still a strong and competitive format. Yet many food-service businesses feel they are losing their grip on consumers because of the growing use of digital devices. In fact, we are seeing new opportunities created by people who probably can't be trusted around a skillet, but who do know what it takes to get consumers moving':

  • Mobile websites that allow consumers to search for restaurants based on specific criteria, including what's on the menu and how previous guests have rated their dining experience. These websites charge hefty fees to restaurants in return for the exposure.
  • Other types of businesses, including supermarket chains, also partner with these sites so as to offer their customers special food deals, such as letting a second guest dine for half the price. These types of promotional campaigns help supermarkets attract more customers without needing to make any sort of investment: it is the participating restaurants, and not the retailers, that cover the guests' discounts.
  • Health insurers and gyms send customers to carefully selected restaurants where they can be served wholesome, nutritious food adapted to their dietary requirements.

Schreijen: 'Food-service establishments that would like to take advantage of these opportunities have to invest part of their profit in these services. If they choose not to, they're inevitably going to miss out in terms of volume and will eventually not be able to cover their overheads. They also wind up missing out on repeat business, which, of course, is another source of revenue.'

'The number-one recipe for businesses to survive in this industry is still a strong and competitive format. Yet many food-service businesses feel they are losing their grip on consumers because of the growing use of digital devices.'

Sebastiaan Schreijen, food analyst at Rabobank in the Netherlands

Special deals

But big data analytics can be valuable for bars and restaurants even when it comes to their regular, loyal customers. There are data and modern software applications available that help businesses identify their customers, for example, or which can recommend an item on the menu that hits the spot on a cold day, or to offer their regular customers special deals, like a discount on their favourite beverage or snack.

More efficient organisation

And the potential of big data extends even further: when it comes to restaurants, cafés and catering venues, the trick is to not let revenues from customers go to waste by using people and ingredients inefficiently. The key questions for businesses to ask: on which days of the week and at which times should more service staff be available, and when should you cut down on staff? On which days and under what weather conditions should which ingredients and dishes be available? Schreijen: 'Big data helps business owners to better know what to expect. This enables them to organise their businesses more efficiently, maintain their profits, and, which is also important, reduce food waste.'

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