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The Price is Right: Evolving Variable Pricing Strategies for Restaurants

May 11th, 2017 | Posted by APT in Restaurants - (Comments Off on The Price is Right: Evolving Variable Pricing Strategies for Restaurants)

On “The Price is Right,” sometimes all it takes to win big is a little guesswork – but in business, developing a winning pricing strategy is quite complex. For years, organizations ranging from airlines to hotels and restaurants have leveraged variable pricing strategies, adjusting prices based on historic demand during the given day of the week or time of day. For restaurants in particular, this approach is key to effectively driving traffic during off-peak hours. Since an empty table is lost revenue, a menu item that sells for fifteen dollars on Friday evenings could be profitably sold for much less on Wednesdays, for example.

Traditionally, variable pricing strategies for restaurants have included initiatives like happy hours and “Kids Eat Free” programs on slower days of the week. However, as an increasing number of restaurant chains opt for digital menu boards or tablet-based menus, the variable pricing opportunity is evolving. Research from Applied Predictive Technologies’ 2017 State of Business Experimentation Report shows that 65 percent of restaurants surveyed experimented with pricing in the past year, and 10 percent of respondents tested variable pricing-specific strategies.

The increased popularity of digital restaurant technology is enabling more cost-efficient and easy-to-implement variable pricing, allowing restaurants to move beyond shifting price just by day and time to implement real-time pricing shifts based on other factors like weather. But how can restaurant decision-makers ensure that these variable pricing programs are profit-positive?

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HelloFresh, Goodbye Grocery and Restaurants?

April 11th, 2017 | Posted by APT in Restaurants | Retail - (Comments Off on HelloFresh, Goodbye Grocery and Restaurants?)

Since 2012, the meal kit industry has grown, with more than 150 companies competing for their share of the growing market. The rise of brands like HelloFresh, Blue Apron, and others is representative of shifting consumer preferences: Meal delivery kits address key demands for convenience and fresh, healthy options. For grocery and restaurant chains to avoid losing market share as this segment grows, they should respond to meal kit players by innovating, with particular emphasis on convenience.

While meal kit companies are disruptors, they have not completely encroached on grocery and restaurant territory – although they are popular among some consumers, they have yet to gain widespread popularity. They also do present some drawbacks for consumers, namely cost. Purchasing the ingredients for a home-cooked meal at a grocery store, or even eating out in some restaurants, is generally less expensive than many meal delivery kit subscription prices. For example, the average HelloFresh box with three meals for two people is $69, which comes out to $11.50 per person per meal – more than they may spend at many fast-casual restaurants, and more than they would spend on grocery store ingredients.

As meal delivery kits become increasingly popular, grocery stores and restaurants should experiment to prevent share erosion from convenience- and fresh-oriented consumers. This approach empowers grocery and restaurant chains to determine which innovations will drive maximum value in maintaining market share.

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Restaurants Score Points with Takeout and Delivery Options

February 10th, 2017 | Posted by APT in Restaurants - (Comments Off on Restaurants Score Points with Takeout and Delivery Options)

Super Bowl Sunday is a major occasion not just for the two teams going head-to-head, but also for restaurants, particularly on the takeout and delivery front. This year, about 48 million people were expected to place some type of food order, presenting an opportunity for restaurants to score a touchdown.

Domino’s says the Super Bowl is the company’s third-busiest delivery day of the year, second only to Halloween and New Year’s Eve. The chain sells more than 11 million slices on game day – which is a 350 percent increase from a typical Sunday. Pizza Hut announced plans to hire 11,000 new employees ahead of the game. Delivery drivers nationwide were projected to clock about four million miles delivering Super Bowl orders.

As pizza players pour resources into programs like Facebook Messenger ordering capabilities and advertising pushes on social media, delivery strategies are increasingly top of mind across the industry at large. While the Super Bowl festivities have died down, how can brands refine their delivery programs for everyday wins?

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New Year, New Technology: Beyond the Tech Hype

January 31st, 2017 | Posted by APT in Labor & Operations | Restaurants - (Comments Off on New Year, New Technology: Beyond the Tech Hype)

As restaurants continue investing in cutting-edge programs from mobile ordering to artificial intelligence in the form of chatbot ordering and more, and technologies like digital ordering kiosks and menu boards remain an enticing option, there are many potential technology investments to evaluate. But which technologies actually move the needle? As restaurants strive to bring new tools to the table, they must continually evaluate which technology investments will work for their concepts, and in which locations, to stay ahead of guest preferences.

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CSP: 5 Lessons Convenience Retailers Can Learn From Restaurants

August 16th, 2016 | Posted by Katheryn McKee in Labor & Operations | Pricing | Restaurants | Retail - (Comments Off on CSP: 5 Lessons Convenience Retailers Can Learn From Restaurants)

In a recent CSP article, APT SVP Marek Polonski outlines the following five lessons convenience retailers can learn from restaurants as they look to optimize their foodservice strategies:

  1. Run in-market tests to evaluate every new idea
  2. Rethink menus to keep up with new diner preferences
  3. Adjust staffing to optimize foodservice operations, while managing costs
  4. Craft pricing strategies to balance traffic and transaction size
  5. Introduce in-store technologies to create a more personalized experience

Polonski writes, “Winning in foodservice means thinking like the experts. Consider these lessons from restaurants, who have been in the business for years, and you may find the right balance.”

Learn more about how leading restaurants are using in-market experiments to fuel innovation across their business.

APT’s Strategic Insights Tools Licensed by McDonald’s

March 22nd, 2016 | Posted by retailblogadmin in Restaurants - (Comments Off on APT’s Strategic Insights Tools Licensed by McDonald’s)

APT recently announced that McDonald’s USA, LLC has chosen to license APT’s Test & Learn ® and Menu Analyzer software solutions to analyze strategic initiatives, including new food introductions and menu optimization. In the press release, Kristy Cunningham, McDonald’s Senior Vice President of Strategy and Insights, commented, “APT’s software has given us a platform to measure the cause-and-effect impact of our initiatives more rapidly, accurately and efficiently…APT’s software helped us understand that ‘All Day Breakfast’ generated incremental business by attracting new customers and leading to larger check sizes for existing customers. This initiative was a primary driver of growth in our most recent quarter.”

APT’s Software to be Licensed by Bob Evans

January 26th, 2016 | Posted by retailblogadmin in Restaurants - (Comments Off on APT’s Software to be Licensed by Bob Evans)

APT recently announced the news that Bob Evans has chosen to license APT’s Test & Learn ® and Menu Analyzer software solutions to analyze initiatives across pricing, promotions, products, and marketing, among other areas. In the press release, John Fisher, Bob Evan’s Chief Concept Officer and Executive Vice President, commented, “After analyzing a few key initiatives with APT, we’re transitioning to using the software more broadly and institutionalizing the Test & Learn ® process across our organization. We want to make sure we’re leveraging the software wherever possible to accurately measure the cause-and-effect impact of initiatives and make more profitable decisions.”

Restaurant Of The Future: The Top Restaurant Trends For 2016

December 18th, 2015 | Posted by retailblogadmin in Restaurants - (Comments Off on Restaurant Of The Future: The Top Restaurant Trends For 2016)

In a byline for Restaurant Report, APT SVP Jonathan Marek provides insights on the top 5 trends for the restaurant industry in 2016. He writes, “Many restaurants have already started adopting new technologies, including mobile apps, tabletop tablets, and drive-thru screens. In 2016, we expect to see adoption increase and restaurants to use technologies in new, dynamic ways.”

 

How big data is changing retail and restaurant businesses

October 28th, 2015 | Posted by MHarper in Restaurants - (Comments Off on How big data is changing retail and restaurant businesses)

APT is featured in an Information Age article on how retailers and restaurants can use big data to gain an accurate view of performance and try new ideas to improve profitability. Click here to read the full article, which includes insights from the APT Index.

KFC UK Licenses APT’s Test & Learn Software

September 8th, 2015 | Posted by retailblogadmin in Restaurants - (Comments Off on KFC UK Licenses APT’s Test & Learn Software)

APT recently announced that KFC UK and Ireland has signed an agreement to license APT’s Test & Learn ® for Sites software to test business initiatives across its restaurants. KFC UKI also uses APT’s Test & Learn ® for Customers software to optimize their customer-targeted initiatives. In the press release, Paula MacKenzie, Chief Finance and Development Officer at KFC, remarked, “APT helped us take our culture of innovating through conducting ‘business experiments’ to the next level, making it more accurate, efficient and process-driven. We are already in the process of designing new tests using APT’s software and are looking forward to analyzing many other high-value initiatives.”