Will mobile capabilities be the turnaround for Darden restaurants?
With the CEO and chairman of Darden Restaurants stepping down following the financial spiral of Olive Garden and the company’s contested sale of Red Lobster, mobile is one strategy a successor should look to in driving a turnaround for the business.
While many quick-service and casual dining chains have embraced mobile in a big way, Darden Restaurants has been slower to jump in. Communicating information via mobile is becoming important not only as a channel for continued engagement, but for Darden as an opportunity to connect with millennials, who have grown up with these brands and need a new marketing mix to remain faithful.
“Before the new CEO is mobile savvy they need to be tech savvy – this is a foundational issue,” said Jose Tamez, managing general partner at Mobile Search Partners.
“You can be enamored with the new channel or platform of mobile but until you understand how technology can leverage your strengths, counter your weaknesses or help you maintain relevance, you could misalign your efforts, lose valuable time and end up with a big spend.”
“Related, from what I hear of food retail execs, quick service concepts are at the heart of trouble for the casual dining segment. The product is quick, good, cheap and the experience is satisfactory. To me, this is a case of what Geoffrey Moore refers to in the IT world as ‘escape velocity,’” he said.
As an increasing number of consumers are adopting smartphones, a new business opportunity has opened up for those in the market who are prepared to offer their services to customers equipped with mobile devices. And while Darden brands do have mobile optimized Web sites, it does not have mobile applications, which can play a large part in maintaining customer loyalty and winning customers.
A responsive design site can take less time to develop than a native mobile app since there is no app store approval or extensive guidelines to follow. However, unless the goal is to simply be universally accessible from any device, responsive design is not the cure-all solution.
A mobile app is designed for a unique experience; exclusive to the operating system it lives on, which means it is not a one-size-fits-all fix and is more expensive to develop. Although a responsive Web site optimizes a brand’s experience, it does not incorporate all the smartphone features such as the camera or GPS that a mobile app can.
A mobile app will provide users with unique functionality and speed that cannot be achieved with a responsive Web site.
Moreover, Darden has already seen this lapse earlier in the month when it announced a new mobile-ordering To Go experience for Olive Garden as part of its ongoing brand renaissance. But the browser-based platform is not comparable with the competition, which has embraced more consumer-friendly applications for the most part.
Importance of UX
Poor usability and hard-to-find information are usually the big problems — specifically, either the lack of a current menu or a menu that is only available in PDF form. That is a real problem because, according to a recent study, 80 percent of consumers want to see a menu before they eat at a restaurant, and 70 percent want to be able to read the menu on a mobile device according to data from a Constant Contact/Single Platform survey in January 2013.
Menus are the number one thing that consumers want to find when they search for restaurants online, and Darden has done that well to an extent.
Eighty-one percent of consumers surveyed have searched for a restaurant on a mobile app in the last 6 months, and 92 percent of those surveyed have searched for a restaurant on the Web in the last six months. Seventy-five percent often choose a restaurant to dine at based on search results, with 84 percent looking at more than one restaurant before choosing where to dine, more than any other industry, including entertainment, retail outlets, hotels, and personal services.
While Darden brands are providing the information diners crave, they are not maintaining that relationship intimately on mobile, which is a mistake especially when it comes to loyalty offerings, as consumers want to feel valued.
Mobile loyalty success models
TGI Fridays is among the merchants using a new mobile loyalty platform leveraging beacon technology to deliver notifications about special offers and rewards when a customer enters a store.
Merchants with beacons in-store can recognize customers on their phone as soon as they enter and deliver an offer, rewards or other message. As long as a customer has Bluetooth turned on and has download the retailer’s app created, no additional sign-ins or swipes are necessary.
Customers show their membership card on their phone at check-out to redeem offers and earn rewards. Users can select for themselves how and when they get messages. In a recent interview with Mobile Commerce Daily, TGI Fridays’ Joe De Nardo said since implementing a loyalty program the chain has noticed an increase in repeat customer visits and brand engagement.
And national steakhouse chain Texas Roadhouse, comparable to Darden’s Long Horn Steakhouse, has acquired 60,000 subscribers to its mobile database in one year via a variety of loyalty call-to-actions.
As consumers cite restaurant and food research as one of their top activities on mobile, there is no avoiding the effect device usage and trends have on the industry. Greater mobile connectivity opens access to new consumer targets, keeps brands relevant in today’s retail environment and gives them access to new tools they can use to add convenience.
Alongside app offerings is mobile marketing, which is delivering a significant boost for some brands.
“Bear in mind, companies tied to legacy systems, processes, assets, or operating models will have a hard time pivoting. Newer companies in quick service that are leaner, more nimble, more tied to Gen Xers and Yers will probably lead the mobile charge in dining, with the traditional chains following along in the race to maintain relevancy,” Mr. Tamez said.
“However, B2C companies have the most to gain, without question.”
Michelle is editorial assistant on Mobile Commerce Daily, New York