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Social Media and Technology Trends and the U.S. Foodservice Industry

The convergence of social media, mobile devices and consumer lifestyles is ushering in a new era of restaurant-consumer interaction, opening new doors for restaurant operators to build customer relationships and sales opportunities, according to Packaged Facts’ Social Media and Technology in the U.S. Foodservice Industry: Trends and Opportunities for an Emerging Market.

Tethered by the Internet, restaurant operators are increasingly interacting with restaurant consumers in real-time—at work, at home or in mid stride. This provides significant opportunity to shape consumer food choices not only as they are being made, but also in proximity to a restaurant seeking that consumer’s business.

This Packaged Facts report provides the insight and analysis foodservice market participants need to understand and leverage social media and technology platforms to enhance their bottom lines. The analysis includes the following:

  • Social Networking Platforms
  • Consumer Review Platforms
  • Food Blogs And Food Photography
  • Technologic Dining In Action
  • Smartphones And Applications
  • Online Ordering Platforms
  • Anatomy Of The Mobile Restaurant Ordering User
  • Anatomy Of The Urban Diner
  • Using Social Media To Effect: Restaurant Case Studies


Market Insights: A Selection From The Report


Anatomy of the Mobile Restaurant User

In this section, Packaged Facts analyzes results from its October 2010 proprietary consumer survey. As part of the survey, respondents were asked whether they agreed with the following
statements:

  • “I use my cell phone or other portable device to place restaurant orders.”
  • “I use my home computer to place restaurant orders.”
  • “Going out to restaurants is a part of my lifestyle.”
  • “I use the internet to do a lot of research on food and health.”

Analysis of positive responses to these questions frames this section’s content.

A youth driven phenomenon

According to Packaged Facts’ October 2010 proprietary consumer survey, home computer- and mobile-based restaurant ordering is more likely among younger adults, with 18-24s 81% more
likely than average to engage in mobile ordering and 60% more likely than average to order from their home computer. Internet-based ordering is only slightly less pronounced among 25-34s.
Internet-based food and health research is also youth-driven.

This can be explained by younger consumers’ higher broadband and cell phone adaption rates, as well as their generally higher restaurant engagement.

  • For reference, according to a May 2010 survey conducted by the Pew Research Center's Internet & American Life Project, broadband penetration among 18-29s was 80%, versus 75% among 30-49s, 63% among 50-64s and 31% among +65s.

Mobile payments
Why it matters: A new era of speed and convenience

According to Chase Card Services, use of RF-enabled cards reduces consumers’ average transaction time by between 10% and 40%, depending on whether purchases are made in stores
or at drive-throughs, and increases the average sale for some merchants by 40% more than cash purchases and by 35% over regular credit cards with magnetic stripes ((Consumer Payment
Trends in the U.S., Packaged Facts, April 2010).

While many already have contactless card capabilities, we believe phone-based mobile transactions hold significant promise. As smartphones take on more and more responsibilities, and as consumers become more comfortable with the technology, the extension to “virtual wallet” appears natural and logical.

In the News

Facebook, Twitter, and Smartphones Lead Social Media-Fueled Innovation within U.S. Foodservice

New York, February 8, 2011 — Social networking sites and smartphone apps are changing the ways consumers interact with restaurants and with their fellow restaurant goers, creating exciting opportunities for foodservice operators and marketers, according to Social Media and Technology in the U.S. Foodservice Industry: Trends and Opportunities for an Emerging Market by Packaged Facts. Restaurants that create a presence on social media can generate brand awareness, promote upcoming events and limited time offers, engage with the customer base, recruit employees, and build brand-loyalty.

“We believe the restaurant industry is in the midst of being shaped by the convergence of the mobile, yet always connected, consumer; location-based and context-aware technological innovation, and mobile payments, which already demonstrate the potential to redefine how to cultivate restaurant guest loyalty, incentivize dining occasions, and better tailor marketing messages,” says Don Montuori, publisher of Packaged Facts.

Restaurant lifestyle engagement informs technology use, according to the report. For example, according to Packaged Facts’ proprietary survey, 31% of adults who consider going out to restaurants as “part of their lifestyle” use their computer to place orders, while 21% use their cell phone or other portable device to do so.

Social media outlets Facebook and Twitter in particular are providing fertile opportunities for innovation. As Starbucks and Chipotle Mexican Grill have discovered, Facebook interaction offers tremendous potential for restaurant brands seeking consumer mind share; through well-timed and tailored online incentives, the brand can weave its way into consumers’ lives, according to the report. And because Facebook users are also frequently on the go, the foodservice industry can use the site to ramp up location-based marketing. Packaged Facts expects such efforts to explode in 2011, as the industry increasingly uses social media to guide patrons to a particular restaurant while they are mobile and deciding where to eat.

Twitter offers restaurants a significant opportunity to reach a younger, more urban, multi-cultural audience, because Twitter usage is particularly popular within the Hispanic, African American, and Asian populations. And, according to the report, Twitter has proven itself to be critical in attracting followers - and patrons - to food trucks, an urban-based and exploding segment of the foodservice industry. Meanwhile, handheld devices and technology are allowing point of sale and in-restaurant tools to evolve and expand. Some of these devices streamline a customer’s visit and maximize efficiency for the restaurant. Introducing such technologies may also reduce the instance of human error in order taking and bill calculations. Mobile phones are already ubiquitous, and Packaged Facts recommends that restaurants stay abreast of quickly emerging ways to tap into the restaurant guest early in the decision making process.

Social Media and Technology in the U.S. Foodservice Industry: Trends and Opportunities for an Emerging Market focuses on the quickly evolving social media and technology trends currently shaping the future of the restaurant industry. The report specifically assesses the impact of social networking sites such as Facebook and Twitter, as it relates to consumer-to-consumer interaction, consumer-to-business interaction, and the ramifications and opportunities for the restaurant industry. It also identifies and assesses emerging technologies and smartphone applications that Packaged Facts believes will help reshape the industry within just a few years. Emerging multi-concept ordering platforms, popular online consumer review platforms, and innovative food blogging & photography sites are also identified and assessed.

About Packaged Facts—Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products. Packaged Facts also offers a full range of custom research services.

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Additional Materials


Foodservice Market Insights

The insights you need, all in one collective series from Packaged Facts.

cover

Additional Materials


Chapter 1: Executive Summary
Scope and Methodology
Scope
Methodology
Consumer survey methodology
Definitions
Restaurant Segmentation Overview
Foundation & Growth Factors
Insight capsule
Fast facts
Social Networking Services & Foodservice
Insight capsule
Fast facts
Technological Dining & Location-Based Media
Insight capsule
Online Ordering & Review Platforms and Food Blogs & Photography
Content synopsis
Anatomy of the Mobile Restaurant User & the Urban Diner
Key findings
Using Social Media to Effect: Case Studies
Chipotle Mexican Grill Insight Capsule
Starbucks Insight Capsule

Chapter 2: Foundation & Growth Factors
Introduction
Restaurant landscape to shift quickly
Drivers of change
Broadband adoption and use
Why it matters
Penetration trend tapers
Quick adoption
Adoption slows
Racial/ethnic gap closing
Income and education divide haves from have-nots
Graph 2-1: Broadband and Dial-up Adoption, 2000-2010
A multi-access online world
Mobile consumers; mobile technology
Why it matters
A plethora of consumer-facing potential
Jumping the racial/ethnic divide
Cell phone/smart phone penetration
Cell phone services
Smart phone share
Notable demographics
Race/ethnicity differences
Social Media
Why it matters
Apps galore
Why it matters
Apple leads the way
Graph 2-2: Apps per Mobile Device, 2010
Social networking and dining apps among most popular
Location-based services gaining a foothold
Why it matters
Nascent usage
Traction among men, Hispanics, and Gen Y
Table 2-1: Location-Based Services: Demographic Analysis
Social networking connection
Leading to swift evolution in context-aware advertising
Why it matters
Benefit: local, highly targeted, highly relevant traffic incentive
Drawbacks
Mobile payments
Why it matters
A new era of speed and convenience
Usage is nascent, but consumer interest is there
NFC payments set for launch and quick uptake
Apple and Google in the wings
Starbucks takes the barcode route
Benefits
Stored value card foundation
TabbedOut is the wave of the future
Bottom line

Chapter 3: Social Networking Services & Foodservice
Overview
Social Media: Enormous reach and usage
Time tells the story
Social Networking Services
Overview
Business use of social networking services
A plethora of platforms; a range of brand extensions
Benefits to engaging social media users
Challenges
Consumer engagement
Social media quickly passes majority status
Interacting with companies common
Using social media to learn about restaurants on the rise
Facebook
Overview
Table 3-1: Facebook, Selected Metrics
Navigating friendship and exposure
Foodservice on Facebook, from McDonalds to Charlie Trotter’s
McDonald’s
Olive Garden
Charlie Trotter’s
Bottom line
Facebook Places& Facebook Deals
Incentives to leverage restaurant brand usage
Finding the deal: how it works
I told two friends, and they told two friends, and so on, and so on, and so on
Learning opportunity
Counterweight: privacy issues
A usage deterrent
Facebook degree of engagement, by demographic
For many, part of a lifestyle or routine
Pavlov’s dog incarnate
The bottom line: connection first, leverage second
Key demographics
Bottom line for restaurants
Table 3-2: Engaged & Hyper-Engaged Facebook Users, Selected Demographics
Facebook mobility
Opportunity knocks
Table 3-3: Engaged & Hyper-Engaged Facebook Users, Mobile Lifestyle Segmentation
Connecting to the opportunity
Table 3-4: Engaged &Hyper-Engaged Facebook Users, Family Restaurant & Steakhouse Chains
Facebook likes Starbucks
Table 3-5: Engaged &Hyper-Engaged Facebook Users, Fast Food & Drive-Ins
Correlation or cause?
Table 3-6: Selected Restaurant Chains: Facebook Friends Per Restaurant Foodservice Sales and Units
Twitter
Overview
Table 3-7: Twitter, Selected Metrics
Who do you want to follow?
Promoting businesses
Starbucks leads restaurant chains into Twitter territory
Minimal advertising space crimps its potential
Photo and video enhancements may provide counterweight
Foodservice on Twitter
Short content bursts
The Counter hamburger chain: prove you follow us!
The Mermaid Inn goes viral
Tweeting vacancies
What’s the password?
Tumblr and Flickr promote visual, sensory appeal
Food Trucks on Twitter
Food trucks and Twitter work hand-in-hand
Application: Meatyballs Mobile
Twitter degree of engagement, by demographic
Short, more intermittent bursts
Key demographics
Bottom line for restaurants: a multi-cultural, urban touchpoint
Table 3-8: Engaged & Hyper-Engaged Twitter Users, Selected Demographics
Twitter mobility
Significant location-based marketing opportunity
Table 3-9: Engaged & Hyper-Engaged Twitter Users, Mobile Lifestyle Segmentation
Connecting to the opportunity
Table 3-10: Engaged &Hyper-Engaged Twitter Users, Fast Food & Drive-Ins
Twitter likes Starbucks, too!
Table 3-11: Selected Restaurant Chains: Twitter Followers Per Restaurant Sales and Units
Calculating ROI
Firehouse Subs
Tweet, tweet
Facebook for feedback and spreading the message
Einstein Bros. Bagels
Instant print couponing

Chapter 4: Technological Dining & Location-Based Media
Technologic Dining
Handheld devices
Chili’s Pay-at-the-Table
Why not a touch screen table?
Google reaches into location-based bag
Table 4-1: Google, Selected Metrics
Google Maps
Google Places
Technology in University Dining
CalDining and Ohio University on Twitter
Duke Merchants on Points Delivery
Next Chicago and prepayment
The iPad
Table 4-2: iPad, Selected Metrics
Restaurant applications
Smartphones, Applications, and Location-Based Services
Foursquare
Business opportunity
Challenges: cheating
Bravo Network partnership links television shows to real locations
Pepsi experiments with repeat customers
Zagat badge
Tasti D-Lite links Foursquare to loyalty program
Table 4-3: Foursquare, Selected Metrics
Layar
TabbedOut
Benefits to consumers
Benefits to restaurants
Drawbacks
Aloqa
Gowalla
Table 4-4: Gowalla, Selected Metrics
GyPSii
Tagwhat
Urbanspoon

Chapter 5: Online Ordering & Review Platforms and Food Blogs & Photography
Overview
Online ordering shifting quickly to multi-concept platforms
Delivery and takeout future appears rosy
Online Ordering Platforms
DiningIn
Grub Hub
Foodler
OpenTable, DinnerBroker and Restaurant.com
Restaurant.com
Dinner Broker
Groupon
Table 5-1: Groupon, Selected Metrics
GoMobo
Five Guys
Papa John’s goes mobile
NetWaiter pairs with Facebook
Online Consumer Review Platforms
Yelp
Table 5-2: Yelp, Selected Metrics
How it works
Benefits
Mobile application
The Ethics and Effects of Yelp
Steakgate
Lawsuit pending
Business response ammunition
Authenticity factor
Citysearch
Zagat
Going mobile
Facebook Places partnership
Bottom line
Menupages
Food Blogs and Food Photography
Serious Eats
The Restaurant Project by Stephen Hamilton
TasteSpotting

Chapter 6: Anatomy of the Mobile Restaurant User & the Urban Diner
Anatomy of the Mobile Restaurant User
Note on reading charts
Restaurant lifestyle engagement informs technology use
Table 6-1: Mobility & Technology Attitudes & Behaviors
Table 6-2: Mobility & Technology Attitudes & Behaviors, Restaurant Lifestyle Group
Higher-frequency restaurant users' technology connection
Table 6-3: Mobility & Technology Attitudes & Behaviors, High-Frequency Restaurant Segment Users, Selected Restaurant Segments
A youth driven phenomenon
Graph 6-1: Mobility & Technology Index, by Age, 2010
Usage marked by racial/ethnic diversity
Graph 6-2: Mobility & Technology Index, by Race/Ethnicity, 2010
Income and technology correlation
Graph 6-3: Mobility & Technology Index, by HH Income, 2010
More of an urban phenomenon
Graph 6-4: Mobility & Technology Index, by Location, 2010
Significant technology cross-usage
Table 6-4: Mobile and Computer Restaurant Ordering, Cross-Usage, 2010
Mobility/technology analysis, by restaurant segment use
Fine Dining
Snack & Beverage, Fast Casual, Family, and Casual versus Fast Food
Graph 6-5: Mobile and Computer Restaurant Ordering Index, Restaurant Segment Usage, 2010
Mobility/technology analysis, by restaurant segment mean monthly use
Graph 6-6: Mobile and Computer Restaurant Ordering Index,
Restaurant Segment Mean Usage, 2010
Anatomy of the Urban Diner
Note on trending feature
The urban dweller: in brief
Table 6-5: Key Demographics, by DMA Size
Internet access location: DMA analysis
Table 6-6: Internet Usage Location, Use Most and Use Also, 2010
Internet access method: DMA analysis
Table 6-7: Internet Home Usage, Access Method & Device, by DMA Size
Cell phone service trends: DMA analysis
Table 6-8: Cell Phone Services Used in Past 30 Days, by DMA Size
Restaurant usage trends: DMA analysis
Table 6-9: Fast Food and Drive-In Restaurants, Top 25 DMA Concentration, 10 Highest

Chapter 7: Using Social Media to Effect: Chipotle Mexican Grill Case Study
Chipotle Mexican Grill, Inc.
Competitive positioning: Customization; Food with Integrity
Marketing that backs Food with Integrity
Framing the message: demographic analysis
A quickly growing consumer universe
Strong income and gender skew
Table 7-1: Chipotle Mexican Grill Users: Selected Demographics
Chipotle Mexican Grill users: gourmets, meet practicality
Table 7-2: Chipotle Mexican Grill Users: Food, Health and Diet Attitudes
Chipotle Mexican Grill: connecting to the social media opportunity
Table 7-3: Chipotle Mexican Grill, Social Media Engagement Analysis
Chipotle Mexican Grill: quantifying social media
Table 7-4: Chipotle Mexican Grill
Facebook & Twitter Restaurant Sales and Unit Analysis
Facebook use correlates with Chipotle use
Table 7-5: Chipotle Mexican Grill, Facebook and Restaurant Visit Frequency Analysis
Chipotle Mexican Grill & Social Connectors
Find me on my cell phone, then reap the rewards
Table 7-6: Social Connectors Lifestyle Group,
Chipotle Mexican Grill Visit Frequency Analysis
Chipotle Mexican Grill website traffic analysis
Chipotle Mexican Grill: Social Media and Technology Innovations
Loyalty program to target “evangelical, super-passionate regular customers”
Facebook as marketing platform
Facebook Deals promotional incentive
Chipotle Mexican Grill by the numbers
Table 7-7: Chipotle Mexican Grill, Selected Metrics, 2007-10
2010 sales trends
Table 7-8: Chipotle Mexican Grill, Quarterly Sales Metrics, 2009-10
2011 guidance

Chapter 8: Using Social Media to Effect: Starbucks Case Study
Starbucks Corporation
Revenue mix shows food trending upward
Table 8-1: Starbucks, Revenue Mix by Product Type, 2009
Recession response
Menu pricing strategies and customer incentives
Starbucks users, Starbucks snackers?
Table 8-2: Starbucks Users: Restaurant Usage by Daypart and Restaurant Type
Starbucks core users
Table 8-3: Starbucks Users: Selected Demographics
Starbucks guests: food adventurousness and fast food practicality
Table 8-4: Starbucks Users: Food, Health and Diet Attitudes
Starbucks: connecting to the social media opportunity
Table 8-5: Starbucks, Social Media Engagement Analysis
Starbucks: quantifying Facebook and Twitter audience
Table 8-6: Starbucks Facebook & Twitter Restaurant Sales and Unit Analysis
Facebook use correlates with Starbucks use
Table 8-7: Starbucks, Facebook and Restaurant Visit Frequency Analysis
Table 8-8: Starbucks, Twitter and Restaurant Visit Frequency Analysis
Starbucks & Social Connectors
Connecting to Social Connectors
Table 8-9: Social Connectors Lifestyle Group,
Starbucks Visit Frequency Analysis
Starbucks website analysis
Table 8-10: Starbucks, Downstream Site Visits
Starbucks: Social Media and Technology Innovations
A holistic approach firing on all cylinders
Driving toward a strong, unified emotional connection
Food and drink customization online
Brand managers mingling with the people: what a concept!
Leveraging loyalty: My Starbucks Rewards continues to gain traction
Connecting with Wi-Fi
iPhone apps
e-gifting & the Starbucks Card Facebook App
Mobile payments: Starbucks takes the barcode route
Stored value card foundation
Promoted tweets
A same-store sales turnaround worthy of celebration
Table 8-11: Starbucks, Selected Metrics, 2007-09
2010 brings good news
Table 8-12: Starbucks, Selected Quarterly Metrics, 2009 and 2010

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