In a recent report – Cooking up extraordinary growth for restaurants during a downturn – McKinsey & Company discussed the challenging landscape facing the restaurant industry and opportunities that strategic and innovative companies can pursue to achieve sustainable growth and profitability.
The report offers a lot of great information including what McKinsey highlights as “eight ingredients” for growth.
• data-driven marketing
• revenue growth management
• store development, footprints, and formats
• new revenue streams
• restaurant operations
• enterprise organization and operating model
• technology and analytics
Planalytics has worked with many leading quick service restaurant (QSR) chains over the years, providing weather-driven demand (WDD) analytics that help companies address some of the key areas listed (bolded above). WDD analytics isolate and quantify the impact that changes in the weather have on consumer buying. These metrics can be calculated at the total transactions or traffic level (by channel – dine-in, drive-through, delivery, etc.) and for specific products (salads, cold beverages, etc.). Weather-driven demand analytics are available on a market-by-market basis on a daily or weekly basis.
Will unfavorable weather keep customers from visiting restaurants or ordering specific menu items? Will traffic shift to online orders and delivery? Is there an opportunity to capture more sales due to an upcoming change in the weather? Since the weather impacts customers, their activities, and their purchases each day, it is an important factor to monitor and act on. Below are examples of how businesses can leverage Planalytics weather impact analytics.
WDD for data-driven marketing: Improve ROAS (return on advertising spend) and other key performance metrics by optimizing when to spend in certain markets and what products/content to feature based on the weather. Can you save advertising budget (or shift to more favorable markets) when traffic and sales will be down due to poor weather?
WDD for restaurant operations: McKinsey’s report mentions opportunities for reducing food waste and optimizing staffing as two areas of opportunity. WDD analytics can help with both. Reducing perishable inventories in locations expected to have lower traffic and sales due to negative weather conditions is a great way to minimize waste and costs. For labor costs, hours can be trimmed when unfavorable weather slows sales, or staff can be added proactively ahead of expected high-demand periods to ensure high customer service levels are maintained.
WDD for technology and analytics: WDD analytics help businesses put a number on the most consistently impactful external driver of consumer purchasing. As businesses build out machine learning (ML) platforms, planning and forecasting technologies, and customer engagement solutions, integration-ready WDD analytics are an optimization layer that restaurants can rapidly systemize and scale for key business processes. From understanding sales performance or determining if a promotion was successful to looking ahead and identifying opportunities to drive and capture additional sales, weather-driven demand offers a valuable perspective for restaurants.