Actionable Insights From APT's Retail Practice

Have It Your Way

May 7th, 2010 | Posted by JMarek in Restaurants - (Comments Off on Have It Your Way)

The San Francisco Chronicle has an interesting story here about diners who are increasingly picky about avoiding certain classes of food (dairy, gluten, salt, fat, nuts, etc.).  In time, this trend seems likely to work its way from the coasts to the heartland, and from extreme demands on high-end restaurants to constant demands on casual dining and even quick-service restaurants.

I love Chef Charlie Hallowell’s quote in the piece.  Charlie runs the outstanding high-end Pizzaiolo restaurant in Oakland, CA (if you get a chance, go there!).  He talks about diners who come into his pizza place and say they don’t eat gluten and cheese: (more…)

How Big is Mickey D’s?

May 4th, 2010 | Posted by JMarek in Restaurants - (1 Comments)

Here’s an amazing statistic (and a fantastic accomplishment), courtesy of QSR Magazine:

McDonald’s U.S. sales topped $30 billion last year, outstripping the next-closest competitor, Subway, by $20 billion. If Subway were suddenly to merge with Burger King and Starbucks, McDonald’s would still rank No. 1 on QSR’s annual QSR 50 rankings, by a margin nearly equaling the systemwide sales of Dairy Queen.

McDonald’s execution of their “Plan to Win” has been phenomenal.

Dave & Buster’s

May 3rd, 2010 | Posted by JMarek in Uncategorized - (Comments Off on Dave & Buster’s)

Another PE deal today. See Part I of our thoughts on Private Equity buying restaurants below.

Social Media Measurement: Deja Vu All Over Again?

May 3rd, 2010 | Posted by JMarek in Restaurants - (Comments Off on Social Media Measurement: Deja Vu All Over Again?)

Oracle makes an interesting attempt at setting social media targets here.  To quote:

Typical [goals] might be to acquire customers, engage them, then convert them. So that translates to:

  1. Increase Facebook fans and Twitter followers
  2. Increase comments/posting and retweets
  3. Increase redemption of offers via Facebook and Twitter

While not unreasonable, we call these “second derivative metrics” here at APT (except redemption… we’ll get to that).  That is, by driving one of these metrics, perhaps that will then drive consideration, which then may drive an incremental visit/purchase.  The funny thing is that this really mimics the broadcast media world, where ad agency measures of “awareness” and “consideration” are de rigueur.

We think you can do better. (more…)

Too Little, Too Late: Missing the Boat on Overdraft Regulation

April 29th, 2010 | Posted by Jatin Atre in Financial Services | Uncategorized - (Comments Off on Too Little, Too Late: Missing the Boat on Overdraft Regulation)

Overdraft regulation is a sweeping change that puts a significant part of revenue at risk.  It is therefore shocking that a Moebs survey cited in American Banker found that only 1 in 9 of banks have started preparing for this change.

The majority of banks will find themselves unprepared when regulation changes take effect on July 1st.  Banks need to act immediately to determine how they will respond to this regulation. (more…)

What Happens When You Take a Child’s Toy Away?

April 28th, 2010 | Posted by JMarek in Restaurants - (Comments Off on What Happens When You Take a Child’s Toy Away?)

In the eternal quest to ban absolutely everything, supervisors in unincorporated Santa Clara County (California, of course!) have banned toys in QSR Kids’ Meals.  While this is believed to be the first such law in the country, it surely won’t be the last.

Which makes us wonder about the consequences, other than upsetting my children (whose grandma lives in unincorporated Santa Clara County).

This is a “natural experiment”:  how do transaction counts and item mix change when toys are removed?  Like calorie count posting and trans-fat bans, impacted QSRs ought to understand this now, so they can apply the learnings as more restaurants become impacted down the line.

“Trouble” with TV Ads

April 27th, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on “Trouble” with TV Ads)
Still From "Trouble" Ad

Still From “Trouble” Ad

On the radio on my way into work this morning, they were playing the song “Trouble” by Ray LaMontagne.  Ray is coming to town, and the station was giving away tickets to the first caller who could identify which company has a current TV ad featuring this song.

The amazing part is that 5 callers dialed in who has clearly seen the ad.  Some described the cute dog.  They loved the ad, which has even gone viral online.  The radio station’s demos are perfect for the company’s concept.  But the first 4 callers guessed the wrong company.  3 of the 4 weren’t even in the right industry.

We do a lot of media effectiveness analysis at APT.  Sometimes we see strong lift and high ROI.  Many times we don’t.  When we don’t, we often get pushback from the client that boils down to:  “people loved the ad, so it must have worked”.  Here’s a good object lesson to the contrary.

(BTW, you can find the TV ad here on YouTube.)

SNL: The Girl Scout Cookie Business Model

April 27th, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on SNL: The Girl Scout Cookie Business Model)

Slightly geeky humor about food economics…  we like that.  This did get me thinking – are Girl Scout Cookies the ultimate LTO?

The Battle with Online Banks Heats Up

April 26th, 2010 | Posted by retailblogadmin in Financial Services | Uncategorized - (Comments Off on The Battle with Online Banks Heats Up)

Consumers are primarily looking for three things in their bank – convenience, competitive rates, and low fees.  As discussed in a recent Wall Street Journal article, online banks are winning customers over with their low fees and are making strides in becoming more convenient and offering attractive interest rates.  Traditional banks should be worried.

 The main appeal of online banks has historically been their customer-friendly fee structure.  Most have no monthly fees, pay ATM fees for customers, and have low or no overdraft fees.  As a result, many were enticed to switch to online banks and “could trim hundreds of dollars a year in fees.” (more…)

… are “mixing” and “redemption”.  Well, at least from the standpoint of someone focused on increasing profits.  Let’s take them one at a time:

Mixing, as in “our new item is so great it was mixing 5% within two weeks!”  Umm, great, you are selling a lot.  What happened to profits?  To margin rates?  Did you get incremental guests?  What halo did you see in rest of check?  What got cannibalized?  I’m thinking of developing a 10 cent double cheeseburger — boy, that’ll mix well!

Redemption, as in “we got 30% redemption on our Facebook coupon!”  It was distressing to hear folks from major social media platforms brag that “redemption rates on social media are orders of magnitude better than print couponing — 30% instead of 1%”.  Redemption ≠ incremental sales.  McDonald’s could hand a coupon for Free Fries to each customer walking in to the store at lunch.  Redemption would be through the roof, but was it really incremental?

Deep understanding of incrementality is difficult in the restaurant business.  Even consultants, agencies, vendors, and restaurant companies that purport to “prove” incrementality seldom get the analysis right.  So I can understand why marketers turn back to these scary words… but that doesn’t mean mixing and redemption lead to actual profit.