APT SVP Mark D’Agostino talks about how the APT Index can map retail and restaurant activity down to the micro-geography level.
Author Archives: CCorman
We’ve written in the past about the questionable economics of daily deals for restaurants. However, a recent article in QSR Magazine suggests that some operators are still using Groupon and other daily deal sites to encourage new business at some locations. For example, Smashburger recently launched a $6 for $12 deal, meaning that the Denver-based burger chain will receive $3 for the same food that would have normally garnered $12.
Two things about this promotion are worth noting:
- First, Smashburger is only running this promotion in areas where they have relatively low brand awareness, so it is likely that the chain is driving more incremental visits in those locations than they would have if they launched the promotion chain-wide.
- Second, Smashburger notes that customers redeeming the deal come in groups and thus have larger overall checks than those customers not redeeming the coupon. While this statistic is seemingly good news, it is difficult to know whether customers redeeming the deal would have had larger checks anyway.
For restaurants with low brand awareness, daily deals have a chance of being profitable by generating incremental trials that may lead to full-priced future visits. But restaurant chain operators need to test these promotions first to understand if redeemed deals are actually generating incremental trips and larger transactions, or if that behavior would have occurred anyway. Fortunately, Smashburger has an opportunity to do such causal analysis since they have only offered the Groupon in some locations.
APT client White Castle was recently featured in an Information Age article about using Test & Learn to inform business strategy. In the article, Kim Bartley, White Castle’s VP of Marketing, said that by using APT’s Test & Learn software, “[White Castle] can stop something that isn’t a good idea and prevent it from rolling out across the entire enterprise.” Additionally, Bartley added that “we are using APT in as many ways as we can. I think we’ve just tapped the surface.”
Click here to read the article.
Should banks invest in specialized staff? APT SVP Will Weidman discusses how banks can optimize their staffing models by leveraging Test & Learn for Employees.
APT SVP Will Weidman discusses how banks can use Test & Learn to improve customer segmentation and targeting.
A recent Nation’s Restaurant News article reports that many chains, including Dunkin’ Donuts and Domino’s, are shifting their local media spend to national buys. Compared to local media, national spend affords significant economies of scale and raises brand awareness in markets where a chain may expand. Though these advantages are not to be overlooked, cutting out local media completely bares substantial risk. (more…)
APT President Patrick O’Reilly talks about how restaurants are using Test & Learn and Menu Analyzer to understand the true incremental impact of menu changes on key performance metrics before taking an action across their entire network.
A recent report from the NPD Group suggests that restaurants are expected to lose market share over the next decade to retailers selling prepared foods, who are estimated to increase sales in this category by 10%. This growth is likely to have the greatest impact on QSRs and fast casual chains, who offer a similar combination of price and convenience. It will be interesting to see how this trend impacts pricing, marketing, and menu strategies over the coming years. Stay tuned…
APT is taking another step in its journey towards fulfilling its mission and achieving global leadership in Big Data and predictive analytics. Goldman Sachs has made a $100 million investment in APT. Goldman Sachs’ new investment and Accel-KKR’s continued support as our primary shareholder, are exciting endorsements of our business, our direction, our technology, and what we can accomplish going forward. Here is a link to a story that explains more: http://www.predictivetechnologies.com/newsroom/press-releases/2013/applied-predictive-technologies-receives-$100-million-investment-from-goldman-sachs.aspx
A recent WSJ article highlights the success of burger giant CKE, parent brand of Carl’s Jr. (on the West Coast) and Hardee’s (on the East Coast). The article raises a number of interesting questions about marketing, labor strategies, and technological investments:
- Much of CKE’s success has come from targeting a very specific demographic: young guys (think ads featuring Kate Upton). Is it more profitable to focus on a specific customer segment rather than casting a broad net and trying to capture everyone? (more…)