In this #snack, we will look at why restaurant data is so important, the problem with collecting accurate data and the actions you can take with the correct data insights
An EY survey found that 81% of business operators believe data should drive every decision made in the business.
Despite this, only 31% have created a company-wide, data-driven strategy.
This is pretty shocking in today’s world.
Recently, there’s been a huge increase in the amount of data flowing between businesses and the consumer.
In the restaurant industry, it’s no different.
The problem is that not enough of us are taking action on this data.
And the reasons are very simple.
Let’s dive in.
Why restaurant data is so important
Data gives you crystal clear insights into who your customer is and how every aspect of your business is running.
Both of which are crucial to success.
There are three main reasons why data is so important for a fast-casual restaurant:
- Competitors and third-party apps like UberEats and DoorDash are now investing heavily in data and analytics to help improve their performance – so you need to compete.
- Data will give you insights into the actions you can take to increase profits and decrease wastage – potentially pushing up those thin margins.
- Improve both staff and customer experience with data insights that increase retention on both fronts.
Coming out of the pandemic, data will play an important role in your decision making.
To do this you need access to all restaurant data in one place, giving you a complete oversight of the business.
Unfortunately, that’s not the case for most restaurants – let’s take a look at why.
The problem restaurants are having with data
Do you know what really determines success?
Do you what will really push your profit margins beyond the industry average of 3-9%?
It’s all down to the business data available to you and the ability of people to take action on this information.
Running a restaurant means there are a lot of moving parts.
Customers come in and out, transactions go through, food is prepared and served, waste is thrown out and staff clock in and out every couple of hours.
All these moving parts, all these moments, all these actions, all these decisions should bob and weave through various channels into one source of truth.
Except it doesn’t.
Typically all this information is disjointed and stored in different areas. This can make it impossible to make accurate decisions – which means you’re losing out.
For many fast-casual restaurants, they have one software for their inventory, one for managing labour and one for performance forecasting.
It’s a nightmare making all of these separate software platforms connect and talk to each other.
What you need is an all in one system that sits as the brain of the business, allowing you to make those important decisions at the right time.
Crucially, in an industry where staff turnover stands at nearly 100%, it’s vital to have one system new staff can pick up easily, without much disruption.
A system like this will impact hugely across so many different areas of the business.
Let’s take a look a five of the most important areas now.
5 areas where restaurant data can make a difference
Most of the important data you collect will be across customer experience, performance, workforce management and inventory management.
Here are five areas where taking action on data will make a difference
Customer retention
Customer data such as names, email addresses and preferred menu items can help you craft a better experience for your customers.
During lockdown it’s likely you ran a reservation system to control numbers in the restaurant. So this information will be in your system.
You can use this data to do things like:
- Greeting them personally when they arrive.
- Making recommendations on menu items based on what they’ve ordered before.
- Emailing them offers and loyalty and discounts, especially around events like Valentine’s Day and Christmas.
These small gestures can make a big difference in retaining customers.
Menu optimisation
As we’ve talked about in our article on The Gross Profit Cheat Sheet(check it out), one surefire way of success is building a menu for scale and consistency.
A tight, lean menu will:
- Show you’ve got confidence in your product.
- Allow you to negotiate better with suppliers if you’re buying the same ingredients in bulk consistently.
- Streamline the cooking process for your kitchen team, especially in really busy periods.
To ensure you’ve got the best menu possible, data is going to play a huge role. From your POS system, you can see what’s selling well and not selling well, allowing you to change things up quickly.
This way, you’re not wasting ingredients on products that just aren’t selling well anymore.
Sales forecasting
The time machine hasn’t been invented to travel into the future…..yet.
But as much as we’d love to hop into DeLorean to see exactly how each week will go, it’s just not a reality.
However, the next best thing is sales forecasting.
Data can be used to predict the busiest times of the year.
You then will have at least some insight ahead of time about what potentially might happen. This type of data allows you to plan in detail based on what you’re going to sell in the coming weeks.
Based on this you can take action on how many staff needs to be on, what you need to order from suppliers and how many tables you can potentially turn over in a given day.
This type of planning can help maximise the revenue you make on those days and bump up your profit margins in the process.
Inventory management
According to this study, the US restaurant industry is shedding almost $162 billion dollars annually in food waste costs.
In the same study, it was found that 72% of customers care about how a restaurant handles its food waste.
Food wastage and its environmental impact are hot button topics in the industry at the moment. It pays to be on top if it – not only for your bottom line but for society as a whole.
Gathering data on what you actually use in your kitchen impacts your business hugely.
These are the type of actions you need to take on this data:
- Make accurate prep lists for your kitchen staff.
- Order exactly what you need when you need it.
- Streamline your menu.
- Log waste and crucially discover unaccounted waste – a silent killer to your profit margins.
Staff performance and retention
As we’ve talked about previously in our articles on The Great Resignation and hiring and engaging Generation Z, hiring and retaining superstar staff is a big issue in the industry at the moment.
Data is really important in this area.
Insights into how your staff is performing will help you progress team members up through the business and help them build a career with you – which hopefully will retain them for longer.
Crucially it will give you insights into poorly performing staff, which gives you a chance to intervene early and help solve any issues they may have.
Wrapping up
As far back as 2015, QSR magazine talked about the importance of owning your own data, highlighting things like menu analytics, customer segmentation and performance prediction.
Post pandemic, data is now essential in the running of a restaurant.
More and more POS systems and management platforms are available on the market right now.
However, it’s pointless having different systems for different areas of the business – it will just make your life so much harder.
An all-in-one platform is a non-negotiable for the modern fast-casual restaurant.
But as we’ve said, there’s no point just collecting this data. You need to analyse it and gather insights to make key strategic decisions at the right time.
