The paradox of choice and missed opportunity

Watch new guests walk into your restaurant and stare at the menu. Do they scan quickly and nod or do they drift across the options, mouth dropping open?

In 2004, Barry Schwartz wrote Paradox of Choice, in which he proves that more options can actually reduce the quality of the customer experience (which was not yet a buzzword). This theory explains the growth of fast casual restaurants. The concepts are simple to understand, the menu is void of the clutter that QSR and casual dining brands have added over the years to keep up.

While choices are necessary to fight the veto, too much choice confuses guests and weakens their understanding of the concept. As Zac Painter, VP of Marketing at Fatz Cafe told F&RM, during the great recession the brand had added a Chinese chicken salad to its menu of home cooked southern classics. The item has since been removed from the menu.

Options like these create confusion for the guest. It’s why Chick Fil A and In-N-Out Burger continue to succeed. Customers know what they come in for, and the brand doesn’t make them search to hard for it.

choice, veto, menu
Four food items, three of which are hamburgers. How’s that for choice?

That’s not to say that every brand should restrict choice to less than ten items. But a key point here is that brands like these offer streamlined menus, and execute on every item. Can you even imagine the wait at In-N-Out if they added more items?

Look at the top growth brands and you’ll see that they all have simple menus in common. Chicken brands like Zaxby’s and Raising Cane’s keep the menu options tight and reap the benefit. Guests crave chicken, they go to a place that executes what they have on their mind.

When guests order from a busy menu they aren’t thinking very logically about making the optimal selection. That’s just not how we’re wired. Instead, in an environment scattered with choice, they simply try to meet the requirement of the task – choose something.

Being overwhelmed by choice can leave people feeling lonely and even depressed, according to Barry Schwartz. Not exactly the aim of hospitality. People are looking to choose but don’t know how to make the choice.

But this harried execution of selection leads to a state that Schwartz calls ‘missed opportunity.’ This happens when they realize they chose something they didn’t really want, or later find a selection they believe would have been more satisfying. This also creates a bad brand experience because they feel that they ‘ordered the wrong thing.’

Of course brands like The Cheesecake Factory deliver on a menu as thick as a phone book every day. There will always be exceptions to any rule. For whatever reason, that brand has driven loyalty by offering tons of choice – even on the dessert menu. This is because, like Chick Fil A and Raising Cane’s, they execute every time.

It is hard to make the wrong choice. But most restaurants are not The Cheesecake Factory. To simplify on execution, simplify the menu. As a brand, there shouldn’t be a wrong thing to be ordered. There shouldn’t be that Chinese chicken salad.

What do we make of these new brands in Fast Casual?

Sit down at Holler and Dash in Tuscaloosa, Alabama and take in the scenery around you; you’ll notice the smell of fresh baked biscuits, mason jars full of cold brewed coffee and an interior boasting bare brick walls and concrete floors. What you’re experiencing has been carefully concocted to attract a specific crowd – a millennial-centric crowd.

You might think that this is a hot new restaurant concept from an up and coming southern chef – you’d be wrong. Holler and Dash is the creation of well loved family brand Cracker Barrel. That’s right – the one and only. An invention out of necessity, Holler and Dash comes after Cracker Barrel exec’s discovered that the beloved Cracker Barrel brand was missing the mark with younger generations. Holler and Dash still features those homemade classics but with updates like a Red Eye Aioli and Tomato Jam topping their signature biscuits. You can tell that they’re catering to a different crowd! New brands like these aim for a crowd more focused on modern design and hip ingredients.

Cracker Barrel is not alone in this endeavor. Many aging restaurant concepts are developing new brands to capture an audience that their core offering is missing. Tony Roma’s opened TR’s Fire Grill to booming success in late 2015 and has been serving up locally sourced smoked meat, craft cocktails and an ambiance that attracts the ideal crowd. Don’t remember Tony Roma’s? (Hint: It’s the place for ribs.) You aren’t alone – not many people recall this once well loved establishment that started in the 70’s and that’s okay with them. “Most people don’t know,” says Tony Roma’s CMO Jim Rogers. And while Rogers is adamant that “We are comfortable with it being known that this is a concept developed by Tony Roma’s,” he stresses that “it’s a completely different concept,” and “we want it to live on its own.”

Why are so many aging brands opening new millennial-centric concepts? With the initial rise in Fast Casual, aging legacy brands like Cracker Barrel, Tony Roma’s, Texas Roadhouse and even Denny’s are looking for a way to redefine their portfolio and keep up with the shift in trends. In addition, the creation of new Fast Casual dining concepts with updated menu’s and modern executions allow legacy brands to try something new without having to interfere with their core business offerings.

Is this the fix for all legacy brands? No way. We have known for years that new offerings drive traffic. What we can understand from this kind of step into the creation of new restaurants by legacy brands is that the restaurant industry is always changing and that we will continue to see brands trying to find ways to stay relevant or expand their offerings. New brands can create buzz if executed correctly. If a restaurant concept like Texas Roadhouse can replicate their hospitality in a fast casual environment slinging burgers instead of steaks like they have with their concept called Jaggers, why wouldn’t they take the leap?

As a millennial who dines at legacy brand restaurants, these new offerings from restaurant chains I already know and love are not only exciting to me from a foodie perspective, but also give me a glimpse into what the future of restaurants could look like and how brands will stay relevant to their guests. I think the outlook is pretty great!

Here more about this approach on the F&RM Podcast.

Can a Business Be Built on a Single Craving?

The shine is coming off the star that is Fast Casual. With several exceptions, the category has had a rough year plus. This past quarter continued declining category sales overall. After several years of craving creating brands, headlines and growth the narrative has been changing.

Analysts are now looking back to QSR as the best bet for growth. Experts are calling for brands like Jack in the Box to spin off their Fast Casual sub-brands (in this case, Qdoba) because they are creating drag for the higher growth QSR.

Fast Casual brands have been praised for a simplified, focused menu. Under-complicated. Built around a single craving. Think Habit Burger (one of the Fast Casual brands bucking the growth trend). That is a fantastic attribute until it isn’t. One clear difference between FC and QSR brands is veto power. FC brands have menus based on one craving. A great burger. Custom pizza.

Across QSR, brands have built our a strong menu that attracts a core while adding a moat. That moat is the extra items that match the brand expectations but meet a different craving. This stops the veto, which is difficult for a brand like Qdoba with a very simple menu to do. Want a burrito, or something like it? Great, Qdoba works. But if not, the search for the next option begins. The single craving is a double edged sword.

Every new FC brand had a simple description: Chipotle for “insert cuisine here.” There was a novelty for most cuisines, as people flocked to see how pho or Uraguayan food could be presented to guests in an assembly line. But time passed and the unknown became the known. There was nothing new to try and back to Jack in the Box we go. Burgers, chicken, tacos, breakfast. Plenty of options for all.

People are not getting richer so price will matter going into the next 18 months.

Doing the mental math here? The next move for Fast Casuals would naturally be to combat the QSR menu moat by adding items. Not so simple. The expanded menu is just one moat. The second was built-in by Fast Casuals but has been enhanced. Pricing.

Fast Casuals took price as part of a premium positioning to differentiate against the perceived quality gap of QSR from the outset. In many cases, the claim that a tighter focus on a single craving made the price make sense. As in: we use the best ingredients to make the best burritos, sorry it costs a bit more. Now it’s a little hard to go head to head with QSRs and expand the menu to match. Sure, they may offer a more premium product but going head to head gives people a chance to compare price.

People are not getting richer so price will matter going into the next 18 months. Fast Casuals like Blaze can’t expand their menu. They’ll be unable to compete on price against QSRs and against Casual Dining if they try to add premium entrees. The question becomes what can they do to make people crave their food more? If they really wish to expand that craving, they’ll need to bring in new, unique flavors and innovation into their core. Fast Casuals have to go all in on ingredients in both variety and quality. Enhance that single craving and make people see the difference between their offering and QSRs.