Three Steps for an Applebee’s Turnaround

Applebee’s recorded a 7.2% drop in Same-Store Sales (Fortune) in the 4th quarter of 2016. With the end of Q1 of 2017 looming, my assumption is that it’ll be their 7th consecutive sales decline. With the recent resignation of DineEquity’s CEO and the hiring of iconic ad agency Grey, Applebee’s is no doubt gearing up for its attempt at a turnaround. Yet without three essential steps, Applebee’s will continue their downward trajectory.

Develop a tighter, more defined brand.

I’m not talking about a tagline like Neighborhood Grill and Bar. I mean actually define why you exist and your largest point of difference from your competition. When thinking about some of the brands in the casual dining category some have done a fairly decent job at differentiating to the consumer. Think Buffalo Wild Wings, Red Robin, Outback Steakhouse. Each brand has a theme.

What does Applebee’s specialize in? It’s not clear.

I’m not here to say that these brands are thriving and setting the pace for the restaurant industry, but remember that casual dining as a whole has had a rough two to three years and you have to give me a better reason than value alone for me to choose to dine at your restaurant. The brands above do that. This leads me to my next point.

Focus on your differentiator.

The brands mentioned above will always be on my shortlist if I’m thinking about or craving wings, burgers, or steaks. They deliver on what I’m craving and are established as specialized and innovators in what they specialize in. I can’t think of one thing Applebee’s specializes in. Nothing stands out for me. Even competitor TGI Friday’s while not specializing in a specific dish, is differentiating with its endless apps, which the company announced will be a permanent part of the menu.

Applebee’s is “famously” known as a grill and bar. So I was surprised when looking at their menu and there were stir-frys, pasta, tacos, and something called a fajita rollup. Hey, at least there wasn’t any Kale on the menu!. The menu read more like a Cheesecake Factory menu than Applebee’s. You’re a bar and grill. Give me fun, straight forward bar food. In today’s restaurant landscape, this would differentiate. I don’t want a caprese mozzarella burger from you, ever. Or a burger with an egg on it for that matter. Master the basic things that people love about bar food. You don’t even have onion rings as an appetizer!

Put the website to work.

Applebee’s website looks like it’s from 2006. There’s very little food imagery so there’s no craveability being created. The homepage isn’t responsive so it’s difficult to navigate to other pages on the website and the menu is filled with images of dishes shot at a distance, so it’s hard to see what a dish actually looks like. A website isn’t the most important channel for a restaurant brand but they need to improve the basics to get on the same level as their competition.

If Applebee’s takes these simple steps and give their audience a reason to come back and try them again, they have a chance to turn their slump around. It’s time for their people to listen to customers and vendors.

 

 

Understanding the Millennials Grocery Trip

grocery, list, cart, shopping, cpg, millennials
When millennial grocery shoppers make a list – they stick to it.

Recently, Food & Restaurant Marketing conducted a research study on the Millennial grocery shopper in which we look at the entire grocery shopping experience. We surveyed a national cross-section of Millennials and uncovered several key insights on how they plan their grocery trip. This post will focus on just one phase of Millennial grocery shopping… how they plan.

In our previous research “Competing With the Refrigerator,” we discovered the decision on where to dine takes place in an extremely short window. Millennials will sometimes start driving without even knowing where they are headed before they start. Also, every millennial has a “shortlist” of restaurants they are willing to visit. In that study, Millennial consumers told us that they choose their own refrigerator over dining out.

In our grocery study, we sought to find similarities and differences in Millennials decision making and consideration set assembly.

Similar to the dining decision time period, the time Millennials think about what groceries to buy is extremely short.

The Millennial grocery shopping trip contains three key elements:
1. Creating their list
2. Finding the right time to shop
3. Choosing the best grocery format

We know that Millennials take a last minute approach to dining as the decision on where to dine takes place in six hours or less. We had a similar discovery in our grocery study. Almost all Millennials make a grocery list either always or some of the time. But nearly 40% of Millennials will make their grocery list on the day they plan to go shopping. Over half of those who make their list the day of, only do so an hour before they actually go to the store. Similar to the dining decision time period, the time Millennials think about what groceries to buy is extremely short.

Knowing when Millennials plan their trip is a good insight but when it’s paired with understanding when they actually go grocery shopping, it becomes an even bigger opportunity for marketers. Our assumption going into the study was that a large majority of grocery shopping was done over weekend. We discovered that the majority of Millennials do in fact shop on Saturdays and Sundays (48%) but over a third of the study said they grocery shop Monday through Wednesday (34%).

This uncovers an opportunity to rise above the weekend noise and allow your brand to stand alone at the beginning of the week.

Finally, we looked at where Millennials grocery shop. While almost all Millennials shop at grocery store chains (92%), most supplement their grocery trips with visits to stores of other formats. A large majority will also shop at superstores such as Target or Costco. This was surprising given all the focus you hear about Millennials affinity towards locally sourced foods. Even more surprisingly, we found a significant number of Millennials who say they grocery shop at Convenience Stores. Those that find themselves shopping at c-stores shop at the same store 64% of the time. This is likely due to a c-store location being on the way to and from work and the nature of those shopping trips.

Our study has shed light on the process Millennials take to plan their grocery shopping trip: How Millennials plan, what the shopping trip looks like to Millennials and finally how this reality affects CPG brands today.

You can view the presentation of our findings here.

Why Dairy Brands Need to Re-Think Packaging

dairy, cpg, grocery, milk, yogurt, butter, cows, farm
Just because all cows look similar to most people doesn’t mean dairy products should.

Starting at the top, I spend more time than is normal in grocery stores. I walk down the middle aisles of the store, stopping at random spots to just stare at different types of canned tuna. I was recently shopping for some sweetener, stevia to be exact, and I was looking at all my options. Liquid Stevia, Stevia in the Raw, Organic Stevia and then there was Truvia. I picked up the Truvia, and the packaging was a bit different. It was more of a rectangular shape than the other “square-like” package stevias. The design was simple, different shades of green on the top and a strawberry on a white background. Even though it was more expensive than the surrounding products, I bought it. The lesson: PACKAGE DESIGN IS EVERYTHING.

Product design can create breakthroughs in any category, take soap for example. Method was (and continues to be) a company going up against giants like Procter and Gamble, SC Johnson and Dial that was able to breakthrough with its unique design, making the bottle a statement piece at everyone’s sink with a focus on responsible ingredients. While the packaging was what got the product to stand out on the shelves, the environmental responsibility the soap represents is what really makes the point of differentiation. Since Method’s emergence, we have seen the larger players in this category create products to compete with Method.

Opportunities like this are still out there in grocery stores, I look specifically to the dairy section for the next breakthrough. (Now, I realize I’m about to sound like Andy Rooney, so please excuse me, but) why does every bottle of milk or container of sour cream need to have a cow and a grassy field on it? You know what message this sends to the consumer? That all milk is the same!

When it comes to dairy, all brands are treated equally.

Sometimes the cow looks like a cartoon, sometimes it’ll look like a half cow – half human. Sometimes the grassy field is a rolling one, sometimes it’s flat with a tree in the distance. Regardless of the type of cow or field on the bottle, the real question is why? Even a brand like Horizon, which owns 4.2% of the total organic product market still falls prey to this trap.

Think about the audience. For the most part, the consumers are mothers with children under the age of 18 buying the product. Is it really necessary to put a cartoon cow on your milk? Can’t we re-think what the gallon of milk looks like today?

We discovered from our own research study conducted in Q2 of 2015, 68% of Millennials purchase store brand dairy items (click here to download our study on millennial grocery shopping habits). Knowing that other generations tend to mirror the behavior of the Millennial, I’m going to make the assumption that this 68% doesn’t fluctuate much when you look at mothers older than 34.

So what does this mean? Well, when it comes to dairy, all brands are treated equally. Obviously, you’ll have your mothers that will always choose to buy organic dairy but regardless of that fact, if you are a dairy brand, why are you not doing everything you can (which right now wouldn’t take much effort) to stand out in the dairy aisle?

Another Missed Opportunity – Shamrock Farms

Take Shamrock Farms, one of the largest family-owned dairy processors in the country. They provide dairy products to most of the western United States.

A few points of differentiation Shamrock Farms have over their competitors is that they don’t use the growth hormone rBST and don’t use High Fructose Corn Syrup in their milk. But the brand really doesn’t take advantage of that. They do give small real estate on their packaging to the fact that they are rBST free but don’t take advantage of branding themselves as being “better dairy.” How do they choose to show off their unique product? They put a damn cartoon cow on the carton, just like everyone else.

Product Packaging Done Right

One brand that I think is doing it right is Noosa Yoghurt. Their packaging is very simple with black lettering and the product description is in the color associated with the specific ingredient. The container is different than most other yogurts (theirs is flatter) and it’s a clear container so you can actually see the product. This may not seem like anything groundbreaking but just do a quick Google image search for yogurt brands and you’ll see why Noosa stands out.

It’s only a matter of time before a company comes along and totally changes the way we look at dairy. If it can happen to the soap industry, it can happen to any industry.