Are you going out to eat tonight? Or possibly this weekend? Chances are there’s a restaurant dining chair with your name on it. For the first time ever, people in the U.S. spend more money dining out at restaurants and bars than buying groceries, since the Commerce Department started collecting data in 1992, reports Bloomberg.
Restaurants have recognized the change in dining habits over the years and jumped to capitalize on this trend. With the millennial generation adding more emphasis on “experiences” and becoming a huge part of the buying public, competition amongst restaurants looking for new ways for people to spend their dining dollars has heated up.
Millennials – the first truly digital generation – aren’t kids anymore. Ranging from ages 18 to 34, many of the generation that has officially taken over the baby boomers in size (75.4 million) have settled down with careers, homes and kids of their own. Along with these changes comes greater spending power. Accenture estimates millennials spend $600 billion a year.
One way for restaurants to grab that spending power is to undergo and reveal a makeover, with new store concepts that help consumers enjoy the overall experience by making the environment beautiful, modern and more comfortable. Many legacy restaurants like Arbys, KFC and Taco Bell have spent millions to update and remodel their stores. In Adweek Magazine, Greg Vojnovic, Chief Development Officer at Arby’s said, “Our food and crew are great; fixing the restaurants is the easiest thing to fix.”
It’s All About the Food
Makeovers are a huge undertaking. Are they worth it?
Let’s back up a bit. Here at Santy, we talk a lot about food. Where should we go for lunch? Where did you go this weekend? What’s the hot new place? Many of our clients are connected to the industry. Whether they are a family entertainment concept (Peter Piper Pizza), a consumer packaged good (Harvest Snaps, Pocky and China Mist), or a casual dining restaurant (Chevy’s, El Torito and Acapulco), we are always talking about how their products fit into the millennial mindset.
In an informal survey here at the agency, one day over lunch, many of my millennial colleagues claimed, “it’s all about the food.” A rigorous debate ensued. They could not care less about the decor or how it makes them feel. They could see themselves eating at a dive just as much as eating at a fresh new restaurant concept if the food met their standards.
I call bullsh**t! And I have the numbers to back it up. Getting a makeover is powerful. KFC started redesigning their stores back in 2014 and have seen a 3% store sales growth. Arby’s, which remodeled 179 of its U.S. restaurants in 2015, has seen a 15% sales increase from its redesign. Diana Kelter, food-service analyst at Mintel said, “Concepts that were once associated with unhealthy food are all getting a makeover. We’re seeing food courts and airport food get elevated, and we’re going to continue to see this level of innovation in the fast-food space.” She continued, “76% of consumers say that fast food has gotten better over the years, and you don’t want to serve innovative food in an establishment that looks the same as the place where people had their birthday parties at five years old. If they’re innovating their menu, they want the overall experience to reflect that.”
The Power of Visuals
Adam Pierno, Santy’s Director of Brand Strategy & Planning, said, “In all of our research, we’ve seen a confirmation of the expression ‘you eat first with your eyes,’ and that translates to the environment. People want to know that the food they’re about to eat is part of something modern and cool. And that’s not just millennials.”
My background is that of an Art Director, so it’s my job to help brands look visually appealing. Not just on paper, but help give consumers a pleasant all around 360-degree experience. It’s a presentation. I do believe in the power of word-of-mouth, but just like many chefs already know, it is about presenting the food the best way possible. That starts long before the customer walks through the doors.
One of our clients, Peter Piper Pizza, has recently started to expand into new markets with freshly designed stores that speak to their audience, parents. What prompted this? They recognized the need to differentiate and be competitive in these new markets as well as be up on trends such as being “fresh food focused” and having a streamlined dining experience. This evolved brand effort was titled “3.0” and consisted of updating the messaging and visual design of both online and offline communications.
I know that in my own life, if I am driving down the street and I see a newly remodeled store, I make a mental note to try and make it back. For instance, Shake Shack, which had just recently opened in our area, had been added to my radar when I walked by their store in our local mall. On my return visit, some of the first things I noticed before a bite of food, was the clean menu board design, the interior, which had a modern natural wood feel, and garage type doors opening to the outside, that gave the place a very non-fast food type of vibe. Even though they really are just a burger and fry place.
In the end, brands that are updating their overall experience are staying competitive. It’s a huge undertaking and people are noticing the way restaurateurs want them to, by opening their wallets.
Photo via Kpporasite