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The Spoon

Daily news and analysis about the food tech revolution

restaurant data

BentoBox Survey: Restaurants & Their Customers Embrace Direct Online Ordering

It’s clear that the COVID-19 pandemic changed the way restaurants do business. As a purveyor of online marketing and commerce solutions for the hospitality industry, New York-based company BentoBox recently decided to quantify some of those changes.

BentoBox saw a jump in business during the pandemic, with more restaurants seeking the online tools that the company offers. The team used data from that growing customer base to understand how the pandemic has reshaped the food industry since March 2020—and what might be next for restaurants.

“We mined all our data to see what it says about what’s going on in the market,” BentoBox’s Chief Marketing Officer Darcy Kurtz told The Spoon in a recent Zoom interview. “That’s been especially important these last couple of years, because things are shifting so quickly, and so dramatically.”

One of the biggest themes in the data was a rise in costs for restaurants, reflected in price increases on restaurants’ online menus. “The food itself is costing more, labor is costing significantly more when you can even get it, and real estate costs are significantly higher,” Kurtz said. And for restaurants, which operated on thin margins even before the pandemic, those price increases can sting.

One way to combat rising costs is by switching to the ghost kitchen model–and BentoBox saw a 100% increase in the number of ghost kitchens using its software platform this year, according to the company’s recently published report. The ghost kitchen model also has a relatively low cost of entry, allowing new restaurants to launch more easily without the need for heavy investment.

BentoBox’s pool of restaurant customers has grown by almost 60% since March 2020. Kurtz attributed that boom in business to a new emphasis on the importance of restaurants’ virtual experiences. “Today, your digital presence is really your front door,” Kurtz said. That’s especially true for ghost kitchens, which rely completely on their online presences to get discovered.

The majority of the company’s growth was driven by increased sales of online ordering tools. Before the pandemic, many restaurants didn’t have direct online ordering functions on their own websites, instead relying on third-party platforms like GrubHub and Uber Eats.

“But when COVID hit and there was only one way of getting revenue, restaurants added their own online ordering paths in droves,” Kurtz said. And diners have responded: According to the report, BentoBox found a 54% year-over-year increase in direct online order volume. The company also noted a 200% increase in restaurants’ monthly revenue through digital loyalty programs.

Kurtz said that loyalty to local restaurants drove these trends: “People have learned that third party ordering apps take a lot of money from their favorite restaurants. So once their favorite restaurants got online ordering, customers said ‘oh, I’ll just go direct because I know that’s best for my local restaurants.’”

With the Omicron variant rearing its head, there’s no way to be certain of how in-person restaurant business will recover in the near future. But BentoBox’s data is clear on one thing: Online ordering is here to stay.

“What we’re finding is that people are just eating out more. They’re still doing online ordering—and they’re doing it all week, not just on the weekends,” Kurtz said. “They found out how convenient it is, and they found out that delivery food can still taste great. So I think for restaurants, the great news is that there are new revenue streams and the total available market of diners has grown.”

But Kurtz predicted that restaurants may struggle to support that expanded business model in an ecosystem where labor is scarcer and inputs cost more.

Because the pandemic has shifted the rhythm of delivery demand, restaurants will also have to adapt to a new schedule. “The fact that Fridays haven’t rebounded is a signal that the hybrid work model is going to have an effect on the operational cadence of these restaurants,” Kurtz said. “Especially with restaurants that are in business districts, they’re really going to have to figure out how to shift their operations, because it’s not going to be a steady five-day-a-week sort of operation.”

With restaurants’ online presence growing in importance, we’re likely to see more growth for commerce and marketing solutions companies like BentoBox. And in turn, that growth should provide more consolidated data on the new shape that the industry is taking.

Brightloom’s Adam Brotman Wants to Better Educate Restaurants on How to Use Their Data

One thing the restaurant industry has in abundance right now is data, and as more of the front and back of house get digitized, the amount of data will only grow. But unless you happen to be Starbucks, with deep pockets and lots of resources, making sense of all that data is, in Brightloom CEO Adam Brotman’s words, “a herculean feat” that most restaurants simply can’t afford right now.

Brightloom’s data-science-as-a-service platform aims to help restaurants including small- to medium-sized ones, make more sense of their data and get better insights from it via the company’s customer growth platform. With it, restaurants can organize their data to answer questions about who their customers are, how many customers they even have, what they’re buying, and how frequently they’re doing it, among others.

Brotman will be talking more about the importance of restaurant data at The Spoon’s upcoming Restaurant Tech Summit on August 17. As a teaser, we recently got some high-level thoughts from him around why data is important to the future of the restaurant and how businesses can better leverage it. Full Q&A is below. And if you haven’t already, grab a ticket to the virtual show here.

This Q&A has been lightly edited for clarity.

The Spoon: What problem does Brightloom solve for restaurants/the restaurant industry?

Adam Brotman: Brightloom provides restaurants of all sizes with the ability to develop an effective growth marketing strategy using the customer data they already have. At its essence, it is an intelligent marketing platform built around customer transaction data and powered by measurement and predictive modeling.

The Brightloom Customer Growth Platform (CGP) makes the secret sauce previously available only to giants like Amazon and Starbucks — data science and continuous optimization — available as a simple and affordable service to the huge segment of the market for whom the “build-your-own” option just isn’t a reality, especially now. With the CGP, restaurants can deliver personalized, relevant, and rewarding experiences to their customers that drive higher customer engagement and measurable business results.

We start with a brand’s existing data, we run it through our proprietary ML models and then the CGP provides insights and analytics around the brand’s digital customer base and digital business. Next, the CGP delivers smart segmentation that allows a brand to easily run a series of personalized marketing campaigns on their own channels.

What is the biggest change in terms of the restaurant industry’s approach towards technology as a result of the pandemic?

Last year, COVID-19 forced retailers and restaurants to digitize their operations seemingly overnight, and in turn, brands digitized a majority of their customer relationships. In fact, The Boston Consulting Group found that one-third of restaurants’ digital customers ordered online for the first time during the pandemic. With vaccine distribution well underway, signs of economic relief, and regional restrictions loosening, it’s paramount for restaurants to leverage technology in order to maintain these new digital relationships and drive sustainable revenue.

In the years leading up to the pandemic, brands have competed on customer experience. Now, the battlefront is moving squarely towards digital and omnichannel experiences. Restaurants have an opportunity to convert their new digital customer relationships into a highly effective customer growth strategy. 

What will happen to restaurants that don’t use this time to learn how to better leverage their data?

In short, they are going to be left behind. Restaurants are still reeling from last year’s disruptions, and we saw the pandemic force 100,000 restaurant closures in six months. The good news is there’s tremendous upside and potential for those who are able to adapt and take advantage of newly digitized customer relationships. The QSR, fast-casual, and casual restaurant segments have seen an uptick in purchase frequency for digital customers compared to non-digital customers. Relatedly, recent research found that more than 90% of customers who are fully vaccinated plan to continue to order online at least as often as they do now. Restaurants are sitting on a gold mine of first-party, transactional customer data. The key now is for them to harness it in a way that drives customer retention and sustainable revenue. 

What is the biggest challenge for restaurants right now when it comes to digitization? 

One of the largest challenges we see restaurants struggle with is how to best collate customer data and in turn take action on it. The reason it’s so difficult is because it requires brands to perform a couple of herculean tasks in sequence.

First, they must access and organize their customer data to create customer segments. That alone isn’t difficult, but when you look at it from another dimension — e.g., what product offer should I send this customer — it becomes exponentially more complicated. Virtually no business could afford the human-hours required to do it manually. Instead, brands must use an algorithm and predictive modeling to understand product offers by customer segments instantly across multiple dimensions. Building this algorithm takes data engineers, data scientists, and digital product experts, and most brands don’t have the teams or resources to build it in-house. 

What are you most excited about when it comes to the impact of restaurant technology?

For too long digital leaders have been misled with the notion of a golden customer record. The attitude that more data is better is false. Marketers spend more time collecting and cleaning data than acting on it.

We’ve now reached a pivotal tipping point that will redefine the future of digital experiences and how brands engage with their customers. The digitization of restaurants and the explosion of data and analytics around what customers want has opened seemingly endless possible avenues for digital marketers to explore, ideate, and create. From intuitive payment to streamlined ordering to tailored loyalty programs, I’m excited to see how restaurants will continue to elevate the dining experience for their customers.

What do you think the restaurant industry will look like in five years?

I predict we’ll see a couple of notable shifts. 

First, digital is here to stay and will only increase. Customers crave frictionless experiences. The accelerated shift to digital menus and mobile ordering and payment during the pandemic illuminated a new standard of customer convenience. If I can order ahead and arrange for curbside delivery with a few clicks on my phone, why would I ever return to waiting in line to order and pick up my food?

Second, we’ll see a rebalanced focus on customer retention relative to customer acquisition. It’s commonplace that loyal customers are almost always more profitable. Instead of over indexing on customer acquisition, restaurants will recalibrate their focus on driving sustainable revenue with existing customers based on historical transaction data.

Brightloom’s Adam Brotman on the Vital Role of Data in Today’s Restaurant Industry

“Ordering was becoming something of a commodity,” Adam Brotman, CEO of Brightloom, told me over a recent video chat. Data, he said, is “a bigger, more interesting opportunity than just ordering, so we decided to focus on just the opportunity to design an easy to use affordable data science as a service.”

But information about customers is only one type of data restaurants need to be concerned with nowadays. In this video Brotman also talks about the overall role data will play in advancing the restaurant industry and how smaller businesses can better harness it.

You watch our full conversation below and read along via the transcript. Note that the transcript has been very lightly edited for clarity. 

The following interview is available for Spoon Plus subscribers. You can learn more about Spoon Plus here. 

Black Box Intelligence: December 2020 Restaurant Sales Were the Lowest Since July

The fourth quarter of 2020 was bad for restaurant sales, with December being “the worst month” since July, according to the latest data from Black Box Intelligence, which shared the information in its monthly Nation’s Restaurant News update.

By December, same-store sales growth fell to -13.3 percent year over year, while same-store traffic growth clocked in at -18.6 percent. In comparison, same-store sales in November were at -10.3 percent and same-store traffic growth at -16.3 percent.

Black Box noted that multiple factors contributed to poor sales numbers for restaurants in November and December. Those included a hike in COVID-19 cases and new dining room restrictions as a result of those rising case numbers. It being wintertime, colder weather limited or eradicated outdoor dining options in many parts of the country, further contributing to lagging sales numbers.

Despite the poor sales numbers, Black Box suggests that restaurants “were successful” in raising guest sentiment for their brands in December. 

Ambience, which in this case relates a lot to cleanliness and transparency around safety procedures, saw the largest improvement in terms of guest sentiment: “Meeting or exceeding [guests] expectations for safety is rewarded with positive feedback online.” 

Somewhat tricker is sentiment around the actual food. Food sentiment “dropped considerably” from November to December. This occurred simultaneously alongside a rise in off-premises orders and a slowdown in dining room sales due to the aforementioned restrictions. As Black Box states in this latest report, sentiment around food has “always been significantly lower” than food in the dining room. 

Restaurants have grappled with the challenge of maintaining quality food in a takeout environment since the pandemic first shut down dining rooms nearly a year ago. Tactics for better to-go food include things like paring down menus to the basics and completely redesigning menus to feature delivery-friendly fare.

Off-premises orders are now the major money-maker in the restaurant biz, and will likely continue to be for some time. The simultaneous rise of ghost kitchens only adds to this focus on delivery and takeout formats. All of which is to say that restaurants must continue to improve their to-go food, regardless of what happens to same-store sales over the next few months.