Restaurant And Hospitality News – November 27, 2017

By Christine Kern, contributing writer

Report Underscores The Value of Gift Cards For Businesses To Drive Sales

Three-quarters of consumers overspend the amount on their gift card by an average of $38, according to the 2017 Prepaid Consumer Insights Study released b First Data. This is good news for businesses, who can leverage gift card sales to make more money.  The study also demonstrated that 44 percent of customers will visit a location they would not normally frequent because of a gift card, while 53 percent said they were more likely to visit more often because they have received a gift card.

“There is a tremendous opportunity for businesses to drive sales and build brand loyalty by implementing gift card strategies and solutions,” said Dom Morea, Senior Vice President, Head of Gift Solutions at First Data. “From employee rewards and customer service programs to social media promotions and marketing campaigns, gift cards are their own form of currency, offering convenient solutions for gift card purchasers and receivers alike.”

The study, based on the responses from more than 2,000 U.S. consumers, also found that consumers purchased 6.5 physical gift cards annually on average, up from 5.9 in 2016, and digital gift cards are also growing in popularity. Mobile gift card apps are also an emerging trend, with 52 percent of consumers who knew of mobile gift card apps saying they had used one, while millennials outpaced total respondents at 65 percent reporting having used an app to purchase a gift card.

First Data reports that most gift cards are still purchased for fast food chains, while vendors where consumers spend the most per gift card is for fine dining establishments. According to the survey, consumers bought an average of 4.4 gift cards to fast food locales, at an average total spend of $53, while fast casual restaurants see an average of 4.2 cards and $55 in average spend, and find dining saw 2.2 cards at an average spend of $146.

Among the study findings:

• 43 percent of consumers with a gift card to a coffee shop indicated they spent beyond the value of their gift cards, spending an average of $19 beyond the original value of their gift card.
• 66 percent of consumers with a gift card to a fast food restaurant indicated they spent beyond the value of their gift cards, spending an average of $19 beyond the original value of their gift card.
• 81 percent of consumers with a gift card to a fast casual restaurant indicated they spent beyond the value of their gift cards, spending an average of $20 beyond the original value of their gift card.
• 84 percent of consumers with a gift card to a fine dining restaurant indicated they spent beyond the value of their gift cards, spending an average of $35 beyond the original value of their gift card.

For additional information, visit the 2017 Prepaid Consumer Insights Study.

NRA Research Shows That Technology Isn’t Just for Millennials

New research from the National Restaurant Association (NRA) reveals that technology isn’t just the answer to attracting more millennials; in fact, a significant proportion of baby boomers are also migrating to computers and smartphones to interact with restaurants.

“It’s well known that younger consumers are more likely to accept and even request technology options being part of their dining experience, but we’re finding that older consumers are also willing to incorporate technology for a variety of restaurant-related activities,” explained Hudson Riehle, senior vice president of the NRA’s Research & Knowledge Group.

“While baby boomers are currently more likely to use a computer to place orders and view menus, they seem willing to transition to smartphones in the future. As more restaurants adopt these technology features, operators would be wise to not only focus marketing efforts on younger guests,” Riehle cautioned.

The research demonstrated that baby boomers would use tech options if they were available at their favorite restaurants, with 60 percent saying they would order online via computer or find directions to a restaurant on their smartphone, and 40 percent reporting they would place orders, use rewards, make reservations, or find nutritional information using a smartphone or tablet. And 40 percent said they would be willing to use touch-screen tech in-store to place orders.

The report had four important takeaways for restaurant operators:

• Integrate loyalty and rewards programs into apps and other tech options, since two-thirds of all consumers are more likely to patronize restaurants with loyalty programs.
• Consider font and button sizes on the screens of all kiosk or touch-screen ordering options, and ensure that they are easy to use and view. Highlighting healthful menu and customization options throughout the ordering process to attract baby boomers.
• Add information on parking options on your website and smartphone apps, including location and directions. Addressing parking concerns can help sway customers, since 80 percent say parking factors into their restaurant selection process.
• Add nutrition information for menu items to your smartphone apps and include it as a mobile-optimized page on your website, since 70 percent of consumers pay close attention to healthy options when dining out.