How Big Data Can Help Your Restaurant

Big data has been a catchphrase for a number of years. Many of us have heard of it, but how does it affect your restaurant business? Big data is, unsurprisingly, nothing more than information. Also unsurprisingly, big data is information on a massive scale. The amount of information floating around in the digital sphere is available at almost incomprehensible levels. By 2020, analysts estimate that each person will have approximately 5,200 gigabytes of data for each person alive at the time. These unprecedented levels of data have begun to have incredible impacts on how restaurants are able to optimize their business operations and better reach their customers.

Big data has given restaurants another weapon in helping to combat intense competition. Big data now allows owners to do more than just guess when making business decisions. Some of the issues big data has proven to be effective in solving include the below:

  • Analyzing and improving menus
  • Optimizing labor costs
  • Improved employee productivity
  • Catering to customers wants and needs through customer profiles
  • Improved predictive capabilities

Big data has proven to be a major part of ensuring the success of a multitude of restaurants. The impact that big data can have on improving restaurant processes and customer experience is incredible. The ability to now have current and accurate data on almost every aspect of your business can be the difference between prosperity and falling to the wayside like so many others. Big data in the restaurant industry is here to stay and it will only keep getting bigger and more important to a successful business.

Where exactly does big data come from in relation to the restaurant industry? Usable and actionable data in this form comes from a variety of different avenues. The most common place for restaurants to receive data on every sale would be from the point-of-sale (POS) machines that employees use to input orders for customers. This information can take the form of structured data such as what’s selling, where it is selling, and at what time of the day a particular item is selling. Although the POS is the most common form of information gathering at restaurants, it is definitely not alone as a source of information. Other methods of gathering information include social media, loyalty programs, and restaurant suppliers. Additionally, less structured information is available that can assist restaurants in making the best business decisions. This includes data such as weather and traffic patterns or how a specific time of day affects population variations. Each data point can be instrumental in determining the best way to approach a particular day or sales cycle.

The massive amount of information that can be gathered may lead some to wonder how to use all of it to better run their business. Since the rise of big data, analytics tools have also risen to prominence to help with analyzing all of this data. A business owner can now utilize a number of different technologies to determine if a marketing campaign is generating buzz. This can be accomplished by monitoring various data sources such as the number of responses and/or likes on social media platforms. Another example of utilizing big data would be the restaurant owner who implements a loyalty program to have more targeted information about what their customers like in efforts to better drive repeat customers. Even better, restaurant owners can combine the results of a variety of data sources to determine exactly what the best time of day or week is to offer a special. For example, by analyzing data from these sources, a restaurant owner may find that nearby establishments pay their employees on a certain day and traffic patterns suggest employees wait out traffic by visiting nearby restaurants. Looks like a perfect opportunity to earn repeat business! Obviously, data analytics have had a tremendous impact on how business owners can better market to their customers for optimal return on investment (ROI) by using customer targeting techniques.

Not so long ago, adjusting a menu based on trends was largely guesswork. Now, restaurant managers have access to historical sales data with the ability to generate customized reports which allow them to find what is selling and when it is selling. No longer are owners required to guess that because it’s the day of the big game, more customers will be ordering take out. They now have the data to prove that, historically, there is an uptick in pizza sales on that day. Data such as this allows restaurants to customize their menus seasonally or even based around known events or days of the week. Combined with proven marketing techniques, this type of knowledge and flexibility is invaluable.

Optimizing labor costs and improving employee productivity have long been staples of operating a successful business. The presence of big data has made this task much easier. Managers have access to current information regarding labor cost comparisons, overtime, departmental cost, and relative profit or loss. Through the use of customized reports, graphs, and charts, managers can easily deduce where pain points are and find solutions in solving those problems. Moreover, restaurants can gather information based on employee production. For example, servers may have numerous performance factors monitored and analyzed such as tip amounts, sales amounts, or the time required to fully serve a guest. This can help to learn where additional training should be provided or where certain servers excel. Effectively using big data to optimize labor costs and improve employee productivity are sure-fire ways to streamline and more efficiently use resources.

Another extremely effective method of using big data in improving sales is to increase customer retention via customer profiling. When customer data is gathered, the restaurant is provided with a wealth of information including every sale that customer has been a part of, their average ticket cost, when they come to visit, how often they come to visit, and so on and so on. This can allow the restaurant to tailor communications to the customer or better learn what the customer likes and how to help them have the best experience possible. Relating to the customers and giving them a feeling of inclusion is a quick way to boost sales and promote repeat customers. A happy side effect of this is the improved marketing through word of mouth that is associated with repeat customers.

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