While the lockdowns might be a thing of the past, the pandemic’s medium-term financial impacts, from interest rate hikes to rising inflation, are putting pressure on household spending. Driven by these cost-of-living pressures, Aussies are planning to significantly reduce their visit frequency and spend at restaurants, bars and cafes over the coming months.
According to the research from SevenRooms, a guest experience and retention platform for the hospitality sector, Aussies are planning to cut back their spending on dining and drinking out by almost one third (29%) and say that restaurants, bars and cafes will be their biggest financial cut-back over the coming months. For a hospitality sector that has felt the impact of the pandemic harder than most, today’s economic headwinds appear daunting.
How can businesses build a stronger customer base?
However, through data, automation and a focus on their customers, there are ways businesses can encourage patronage and alleviate economic pressures. But how are consumers spending today? How can venues incentivise loyalty? And what role does data, technology and automation play in driving cost savings and operational efficiencies?
Diner spending and sentiment
According to the research, four in five (82%) Australians feel that the current cost-of-living crisis has impacted their spending habits already, while a further 12% believe they will be impacted soon. The hospitality sector, in particular, will be a focus for their cut-backs.
Three-quarters (78%) of Australians will visit restaurants, cafes and bars less – and 79% said they’ll spend less when they do visit – as a result of recent cost-of-living pressures.
Before the cost-of-living squeeze, the average Australian said they spent $129 dollars per month visiting or ordering take away from restaurants, bars and cafes. Today, however, they’re spending just $91 – a drop of $38, or almost one-third of their previous spend.
That’s a significant decrease in potential revenue for hospitality venues that have felt the full brunt of the pandemic over the last two-and-a-half years. However, through technology and a focus on loyalty, businesses can mitigate the impacts of economic pressures.
With consumers spending less, it’s easy for business owners to think that acquiring as many customers as possible is the most strategic approach. While acquisition is important, retaining an existing customer can be more profitable, and as much as seven times cheaper.
The best way to incentivise loyalty is by providing the meaningful experiences that consumers remember and recommend. Central to this is personalisation. Today, consumers want businesses who recognise their unique habits and preferences, catering their offers, communications and experiences accordingly. For example, a one-size-fits-all promotion on oysters is going to fall short for those who have a shellfish allergy, or don’t like oysters.
Instead, customers want offers based on their preferences and habits. Just as Spotify and Amazon provide tailored playlists and shopping lists to drive loyalty, venues can do the same.
To deliver the personalised experiences to consumers that drive loyalty, meaningful relationships and increased revenue, hospitality businesses must unlock approved guest data.
Collecting data through QR codes, reservations or direct online orders allows venues to paint a 360-degree picture of each guest, whether they dine in or order online. Data is what provides businesses with the insights to understand what a customer’s go-to dish is, whether they regularly order online, how frequently they visit the restaurant, or when their birthday is.
Having this valuable data on clients isn’t just a nice-to-have — it’s vital to a restaurant’s success in 2022. According to the research, Aussies say their loyalty to — and expenditure at hospitality venues — would increase if they received personalised offers based on a previous visit such as a discount or complimentary dish or cocktail. Others said receiving dining credits for hitting a new loyalty tier would encourage them to spend more and visit more regularly.
Customer acquisition will always be important for growing businesses, but when times are challenging, securing the loyalty of your existing customers can be worth its weight in gold.
The data that drives this loyalty can be turned into automated marketing. Automation drives operational efficiency, boosts productivity and allows you to maximise your staff’s time on meaningful, revenue-generating tasks, rather than time-consuming and mundane activities.
When tech allows your business to do more with less, whilst providing the customer experiences that incentivise loyalty, it gives you stronger, more strategic foundations. Hospitality is one of Australia’s most vital industries, both socially and economically, and those that leverage tech and data will be better placed to overcome economic headwinds.