Tough times test the mettle of true leaders, as this week proved for the restaurant industry. Several of the business’ most formidable and respected players, from Shake Shack to Starbucks and McDonald’s, revealed head-turning new booster strategies.
Here’s a review.
1. McDonald’s new ad model
Never mind the split with Leo Burnett, the ad partner for 35 years of the industry’s most aggressive marketer. Some might argue that the collaboration taught the industry how to advertise.
McDonald’s is leaving Burnett with just a few international assignments to try a completely new sort of arrangement in the United States. Agency giant Omnicom Group will create a new shop within its extensive portfolio exclusively for McDonald’s, drawing on the brainpower and resources of the whole Omnicom network. The unnamed operation will even be based in downtown Chicago to work side-by-side with McDonald’s, which is moving into the city from the suburbs.
But that’s not even the revolutionary part. The parties have indicated the startup agency will be compensated on a pay-for-performance basis. They’ve been mum about the particulars, but McDonald’s told Ad Age that the triggers for payment could include such metrics as sales and customer counts.
The advertising magazine pegged McDonald’s U.S. ad budget for 2015 at $1.43 billion.
2. Starbucks’ success-by-association plan
One of the industry’s most successful limited-time offers, hands down, is Starbucks’ Pumpkin Spice Latte, a drink it showcases every fall. It’s the McRib of the beverage market.
So it was surprising to see that PSL’s ta-da moment this year was shared with what amounts to an LTO understudy. The drink’s re-introduction announcement gave ample play to a new option, Chile Mocha.
It was the restaurant equivalent of “Cheers” setting up “Frasier” as a spin-off. The unstated message seems to be, “If you like the main attraction, wait until you give this one a try.” And that puts another arrow in Starbucks’ promotional quiver.
“When we think about fall, often people think about warmth and spice, like cinnamon and apple pie,” explained Michelle Sundquist, Starbucks’ senior product developer. “We decided to take that idea in a new direction with chocolate and a bit of heat.”
3. A twist on airport cafes
That’s not the only tweak in Starbucks’ success formula. The chain’s airport cafes have become an oasis for travelers craving a jolt of caffeine before they board a morning flight. Now one of the brand’s few franchisees, HMS Host, is hoping to re-position the outlets as relaxation spots for road warriors traveling at night.
The concessionaire is slowly adopting Starbucks’ Evenings program, where the cafes morph into bars as the sun sinks. Four in-airport Starbucks are already inviting travelers to bend an elbow at a gate-side outlet, and a fifth is set to open at the airport serving Louisville, Ky.
4. Ikea’s DIY restaurant
Shoppers readily undertake the assembly of furniture they buy at Ikea, the Swedish big-box home furnishings store. So why wouldn’t they do the same with a restaurant meal?
The retailer will test the theory when it pairs a pop-up restaurant with a London store later this month. The Dining Club will invite consumers and up to 19 of their friends to put together a meal for the group, following the instructions of a chef on the premises. The idea is to provide a different sort of social event. “When we cook together, we make more than just food,” explains Ikea’s website.
The 38 meal sessions are already selling out. Patrons can participate in the prep of a brunch, lunch or dinner.
5. Shake Shack’s twist on delivery
Ever the quirky concept, Shake Shack is branching into hotel room service, albeit it at a lone site. The chain’s restaurant in the Chicago Athletic Association boutique hotel is offering its full menu for in-room service, but only after the lunch rush ends (the service starts at 3 p.m. and runs through 10:30). Hotel guests will have to find another option for breakfast in bed.
Among the restaurant’s novelties is a nod to local hot dog preferences, the Shack-ago Dog.