There has been a noticeable rise in consumer preference towards independent restaurants and cafes over the last half-decade. Consumer attitudes have changed. They value what an independent offers above a chain. In fact, research carried out by Pentallect found consumers scored independents higher in 12 out of 15 attributes compared to chains.
As a result, independents are expected to see 5% by 2020, compared to a 2% forecast growth for chains and see market share increase accordingly.
In America, ‘micro-chains’ have far outperformed chain rivals, seeing 5% unit growth compared to large national US brands which are looking to scale back operations following flat growth last year and rising costs.
And some cities even have policies in place to limit the reach of chains within cultural neighbourhoods which are themselves a destination. Most famous is probably San Francisco which introduced a ‘foruma retail’ policy to reduce ‘sameism’ on their neighbourhood high streets and give a leg-up to local retailers.
Closer to home, Labour’s attempts to strip-back a Thatcherite era of megastores by limiting square footage allowance for national chains have enjoyed mixed results. The result was retailers adapting, most notably with the emergence of an over-abundance of Tesco Metros.
In fact, smaller retailers came off worse as potential units were aggressively snapped up by these new chain-owned mini-outlets.
As Annie Roberts of NPD noted: “Micro-chains are bringing to the restaurant scene a new attitude and perspective. Many are successful because they have their finger on the pulse of today’s restaurant consumer. They are often locally-based and offer their customers a creative concept, great food, and an enjoyable experience.
“What’s not to like.”
Spending habits among critical consumer groups are also heavily influencing the market, as well as social media as a whole.
For example, 16-24-year-old’s spend more money on food each week than any other age group, £63.65 compared to £57.30 according to a BBC poll. £28.26 of that spend accounts for cafe and restaurant trips, 64% more than adults splash on eating out.
And it’s not just independent coffee shops and pizza halls which are attracting the attention of inner-city eaters, in particular, it’s also the rising interest in street food with their farm-to-stall mentality and narrowed-down specialist offering.
And one of the decision-makers for this younger age group is the ‘Instagramability’ of their chosen destination. In fact, research by restaurant chain Zizzi found that 18-35 year-olds spent a whole five days a year browsing food images on Instagram.
Young diners want to share their experiences, impress their following and discover new places.
If we strip this back to a really simple level, particularly younger consumers are more likely to visit and share an experience at a quirky ‘discovered’ location as opposed to an ‘always been there’ restaurant or coffee shop chain.
Sure, some brands have transcended this trend. Greggs, Starbucks and Nandos are (ironically on occasion) always social-share-acceptable, despite being as chainy as a chain can be.
And how much of an impact have recent tax scandals also played? Some big chains hit the news for paying a pittance of their profits in taxes. Consumers are more socially aware. They want to spend their money with ethical, or at least fair, businesses.
The ease and accessibility of honest reviews have also played a big part in boosting independent chains. Consumers can easily ascertain the quality of a location by what diners before have experienced. As a result, fast-casual chains have seen an average decrease in rating by about 7%.
The prominent note from this particular study, carried out by Yelp, was that consumers ‘find smaller, independent restaurants more authentic, offer better and more unique menu items, align more closely to consumer needs and provide better value than their chain counterparts’.
So with rising costs, flailing review scores and a growing trend towards independent offerings, in particular with the younger inner-city populus, what can restaurant chains do to reverse the tide and tap into what the consumer really wants and is looking for?
How to win around local diners
Think local, market local
Independents really understand the culture of their environment and can act fast if they spot and marketing opportunity. Chains, typically, are lousy at this. The management chain is too long for any decision to be made fast enough to be executed in time and local ideas getting lost.
But chain restaurants really do need to think local to market local. National awareness campaigns are great, but on the ground, each restaurant will likely have different best sellers, different localised dietary requirements and different competitions too. Local consumer trends will also vary massively. A university city will have different peak trading times to a commuter town, for example.
Trust branch and regional managers to create campaign ideas and their own marketing strategies, or at the very least, listen to their ideas.
Show the personality of your brand, and let your staff shine
One of the primary reasons people love shopping local is they know who they’re buying from. They know their usual waiter, restaurant owner, shop manager and so on. We go to the same barbers because we work up a rapport, and that’s the same for eating and shopping independent.
Restaurant chains could do a lot more to promote their own staff to local customers. They’re the in-store face of the brand. Sure, employee churn is high in this market, but lead bar staff and middle-management are more likely to stick around for long. Include them in social and print ads. Put a local face to a brand name.
Do something for the local community
It can be difficult for chains to enact a corporate social responsibility strategy at a granular level which is an area where local outlets thrive. One Manchester restaurant gained national press coverage for giving food to the homeless. The fast-food restaurant, called Bosu Body Bar, left bags of food outside its door with written messages saying to share, eat and enjoy.
‘Where is the sense of throwing away food when a few feet away a person is starving?’
Staff and management at chain outlets will understand the pressing issues in the branch’s town or city, it’s up to management to reach out and listen to what could be done at a local level. It won’t always be handing out food. It could be sponsoring the redevelopment of a small plot of wasteland into public breakout space, or as Domino’s cleverly did, fixed local potholes.
Localise your social promotions
Social media for restaurants can be relatively easy. Lots of amazing food pictures to share and lots of physical locations to raise awareness. But effective social media marketing for a chain restaurant is surprisingly tricky.
You’ll likely have problems with complaints management, or implementing a streamlined system whereby branch managers are informed of and can respond to social complaints. And you might be undecided about whether to go for a single-focus social strategy or roll-out an array of locational pages for each of your branches. The former helps with quality control and avoiding scandal, the latter makes more sense if you’re struggling to connect with the locals.
Here are two ways to get around both these issues:
Central-brand social strategy:
Use postcode or city targeting ads to directly advertise a specific store to those who are likely to eat there. Use website links that take the potential customer directly to that restaurant’s specific website landing/booking page.
Introduce cross-posting functionality so a primary social manager can manage all page content for brand broadcasts. To control quality, either hire regional social media executives or introduce content approval software which is green-ticked by head-office.
Conversely, put your trust in your teams and hope a Twitter storm doesn’t follow.
Make your restaurants unique to each location
As noted above, there’s a real issue with formula retail for some, the idea that everything is the same, from chow mein to chairs.
To ‘fit out’ of a location, restaurants need to have unique features. Not every restaurant front needs to look exactly the same. Brand logos and colour palettes can still adorn the shop front, but that doesn’t mean every other aspect needs to be identical across the country.
This is an area which Turtle Bay demonstrated well in Manchester, with an impressive site on busy Oxford Road and a more run-down vibe to its bohemian and fiercely independent Northern Quarter location.
Localise PR efforts
Engage the local community right from the start. Launch parties are a fantastic way to invite local print media, digital press, social influencers and bloggers to your new restaurant and gain immediate exposure.
But don’t forget the most important people – those who are going to be stopping by your restaurant in the future.
Make a target list of nearby residential streets, apartment blocks and offices and get out there inviting everyone at those locations with a leaflet and launch party ticket. These are the people who are also most likely going to appreciate being invited to such an event too; not because they have a few thousand Instagram followers but because this is a chain restaurant that clearly cares about the people living and working around it.
That one invitation could mean a lifetime of brand loyalty, so long as your offering is as tasty as you say it’s going to be.
And if an existing branch is struggling at a certain location, then find a reason to host another party or mini relaunch. This could be a new menu, a new diet-aware sub-menu, new cocktails or a fresh fit-out you want to show off.
Whatever it is, make sure your local customers are some of the first on the invite list.
Go-local with suppliers
This may not be possible for all chain restaurants, not across the produce supply chain anyway, but some elements of the ingredients required for cooking could well be sourced locally.
Sure, KFC isn’t going to pop to the local butchers for some fresh chicken every morning. However, beers on tap could be local, and fruit and veg could be purchased from local suppliers or farms too.
Small efforts help restaurant chains appear to be making a large effort to support the local economy.
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