Restaurant technology is about to get a lot more personal.
That was my biggest takeaway from three days spent listening to and chatting with folks at the Restaurant Leadership Conference this week.
In my notes, talk of personalization appears eight times, from six different people. For comparison’s sake, the word does not appear at all in my RLC notes from 2021 or 2023, and showed up just once last year. (My notes from 2022 have apparently been lost to time.)
My hastily typed notes are just one perspective, obviously, but the message this year was clear: Restaurants are keen on making their digital interactions with customers feel more tailormade. Or, as Meenakashi Nagarajan, chief digital officer for Panera, put it: “Knowing you and using it in a way that’s helpful and thoughtful."
That might include targeted promotions, relevant product recommendations or celebrations of certain milestones or achievements. Anything that elevates an online interaction beyond a one-size-fits-all experience, or hits the right person at the right time.
In pretty much all of the discussions at RLC, it was taken for granted that customers want that sort of relationship with restaurants. But there is some research to suggest that they do.
According to a 2021 McKinsey study, consumers now view personalization as “the default standard for engagement.” More than 7 in 10 consumers expect it, and 75% get frustrated when it doesn’t happen. Even more importantly, 76% said they were more likely to purchase from brands that engage with them in a personalized way, and 78% were more likely to repeat their purchase.
Given those numbers, it’s easy to see why restaurants are so interested in this.
Many chains are going at personalization through loyalty programs, which allow them to collect data on their customers and then reward them with offers that match their tastes and habits.
Dutch Bros’ loyalty program, launched in 2021, has given it a new way to talk to its customers via personalized rewards, said CEO Christine Barone. Members now account for 71% of the coffee chain’s transactions.
And Portillo’s new rewards program lives in customers’ smartphone wallets and allows the chain to send them text messages. “It lets me get into 1-to-1 customer relationship management,” said CEO Michael Osanloo.
Personalization was also cited as a way for brands to differentiate themselves from third-party aggregators. Leaders from Papa Johns said they want to reinvent the chain’s first-party delivery experience to make it more personalized and elevated.
“If you want a Papa Johns delivery experience, it should be different than a third-party experience,” said Kevin Vasconi, the chain's chief digital and technology officer. With data and marketing, it will be, he said—not today, but eventually.
Personalization will certainly require data, and good, clean data at that. It will also require technology to analyze that data and then generate personalized outreach.
A lot of restaurants are still working on the first part. But the fact that so many are suddenly talking about it is a sign that progress could be imminent.
At the same time, for all of the buzz about personalization, I did not hear or see any proof that personalization works. Maybe it's just too early to say. But the question remains, how much will personalization actually move the needle, relative to the cost? Especially when everyone seems to be planning on doing it?
I suspect it will come down to just how relevant those communications are and how truly personal they feel. Many of those decisions will likely be made by artificial intelligence, which is, of course, not a person.
“People can tell when ChatGPT has written things, and they don’t respond very well to it,” economist and futurist Jason Schenker warned of the use of AI in marketing.
There was at least one other skeptic of this whole strategy at RLC this week. Jim Bitticks, the president and COO of Dave’s Hot Chicken, isn’t convinced that using customer data to send emails with personalized offers is worth the investment. “Data shmata,” he said during a panel I was moderating.
Dave’s has had plenty of success using a blanket approach to marketing. A lot of its growth has been driven by TikTok, where it has more than 3 million followers.
Dave’s sales increased 57% last year. Given those results, Bitticks figures, why make it personal?