The NPD Group Inc.
11/02/2021 | News release | Distributed by Public on 11/02/2021 08:39
How Loyalty has Changed Europe’s Foodservice Industry in the Pandemic
Jochen Pinsker
Senior Vice President, Industry Advisor, FoodserviceLoyalty has always been a key driver or success, but today it's more important than ever before. In fact, it's essential that restaurants keep an eye on loyalty. You want your customers to visit frequently and to become their primary choice in myriad situations.
In many industries, Pareto's rule applies (also known as the 80/20 rule): 20% of your customer base represent 80% of your business. In Europe's restaurant industry, the standard we see is closer to 70/30 rather than 80/20.
Regardless, it is essential that you treat your best customers well and manage to bring them back into your stores as frequently as possible.
We define loyal customers as those who choose your place or chain without any specific evaluation of location, price, or promotions. Our CREST data in Europe shows loyalty is the key reason consumers pick a place in three out of 10 visits in the industry across the "Big 6" European countries (France, Spain, Italy, Germany, UK, and Russia). This makes loyalty and store location the most important reasons for choosing a place overall.
But there are slight differences per country. For example, loyalty is more important in France (36%) and Spain (33%) compared to the UK (27%) and Russia (25%).
Of course, loyalty varies based on the market segment. Workplace cafeterias very much depend on their most loyal customers. Among the commercial restaurants, places such as coffee bars and bakeries - places consumers visit habitually for their lunch break or on their way to work - depend heavily on their customers coming back every day. For full-service restaurants, people want to try something new from time to time and may therefore not be as loyal to one specific place.
Trust: A Key Driver During the COVID-19 Period
The essential ingredient to building loyalty is trust; and trust has been top of mind with consumers when selecting a place to go during the pandemic. In our June 2021 COVID-19 Foodservice Sentiment Study, nearly three-quarters of all respondents across the Big 6 reported they only go to places they trust. Trust mostly dealt with the operator's safety measures and hygiene, though trust in the people they decided to go with played a role, too. Interestingly, people don't trust brands or chains as much as they trust people and independent restaurant owners.
The Road Ahead
While loyalty had become an increasingly important factor for consumers' choice in restaurants before the pandemic, the pandemic has elevated it even more. Because trust was so important, people stuck to places they liked and knew instead of trying something new.
Without question, the appeal of new dining experiences will return, but consumers' loyalty, built through trust, is expected to remain an important factor for people when choosing a restaurant.
Many operators (chains and independents) understand future success depends on their core client base returning regularly and frequently. That is why they are invested in loyalty-building efforts such as enhanced social media activities, designated loyalty programs, and adoption of apps for ordering.
Those that build effective loyalty programs during and after COVID-19 will have an excellent start to a brighter and more successful future.