Earning traffic during the retail decline

Retail business is being crushed – no surprise to anyone studying their local markets, watching the news or even driving in their neighborhood. Stores are closing and brands are going bankrupt. Strong brands like Macy’s, Lululemon and Ralph Lauren are suffering. Weaker brands like Sports Authority and Payless are suffering even worse.

There are some theories about why. Amazon. Experiences. Did we mention Amazon? But the fact is that people are spending less time going to stores. The build out of restaurants across the US was aligned with the buildout of retail. Creating destinations that would attract people (shoppers) called for restaurants that allowed them to refuel and extend their shopping trip. Now, traditional anchor tenants are shutting down making malls empty husks. Developers are scrambling to rethink the space they’ve got so much invested in.

What will be the memorable touch that your staff provides that will earn five stars on Yelp and a repeat visit?

Multi-unit restaurant brands have lost the natural traffic from their retail neighbors. Considering the extreme die-off in retail, restaurant sales are remaining fairly strong.

Experiences built for sharing.

One theory for the drop in retail is that people are spending more on experiences. Specifically the kind of experiences that make them look good on social media. Experience has become a buzzword, generating cottage industries of specialists and consultants. It doesn’t have to be that complicated. What in your restaurant is worth posting to Instagram? What’s on the menu that will break through the Facebook feed and go viral. What will be the memorable touch that your staff provides that will earn five stars on Yelp and a repeat visit?

We are seeing strong, established retail players really ask themselves if they are offering something worth visiting. Is the experience worth the trip? Would you invite someone to come along? Would you share it to social media in a non-snarky way? Brands need to look in the mirror and accept what they provide and its value. The brands that do will have a chance to create experiences that people will travel for.

Delivery as an extension not a replacement.

If people won’t be coming to you, you can go to them. But one flaw with the current trend of delivery services is the lifeless exchange with the brand itself. Hospitality provided by the restaurant is gone. The experience is provided by a proxy. Staff and servers are critical to earning repeat customers, so what happens when they’re eliminated from the transaction? And a transaction is all it becomes.

Another reason that retail has fallen off is that online retailers have found ways to mimic the service and personal touch of live staff. They’ve eliminated barriers. Restaurant brands must find ways to extend the experience in a delivery environment. What touches can be added to make delivery from your brand memorable and differentiated? While people are keen to share images of their meal at the table in your restaurant, they’re very rarely interested in sharing an image of food that’s been delivered, unless something’s gone terribly wrong. Give them a reason to get excited about the brand from their own home.

One interesting thing about people is that we always think we’re watching the third act. What is happening to malls today isn’t necessarily the final state of American retail. Building malls as a center for commerce was one phase. The web was a second. Mobile is still impacting things today. Technology like self-driving vehicles will change shopping in ways we haven’t yet considered.

The brands that are positioned for growth aren’t the ones going all in on what we know today. They are the ones who are creating plans that will be adaptable going forward.

Can the Shark Tank effect drive traffic for an LTO?

Shark Tank, the ABC show in which entrepreneurs pitch their products to investors, has become a hitmaker. The show, based on the international program Dragon’s Den has been airing in the US since 2009. When brands appear on the show, things happen in the marketplace.

For the successful guests, fortunes change visibly. They not only receive investment funding from a famed Shark, but they also earn mentorship and network power – tying into the Shark’s other businesses and processes. These brands tend to blow up in retail. You have no doubt seen clusters of products from the show or even clusters from individual Sharks in retailers like Bed Bath & Beyond, Walgreens and Home Depot.

Even for entrepreneurs who fail to earn a deal, the show has the power to drive interest and sales of the product. Garrett Gee walked away without a deal to fund his app Scan in 2013 but the app became the number one app in the iPhone and Windows app stores due to exposure from the show.

There have been a few dining success stories. Cousins Maine Lobster food trucks earned a deal that has driven their expansion across the country. Grilled Cheese concept Tom & Chee is now in 14 states after earning investment on the show and being featured in updates.

Now, CKE’s Carl’s Jr. and Hardee’s are attempting to earn some capital of their own by partnering with the show. In an episode from 2013, Shark Daymond John invested in a patented boneless pork rib product – Bubba’s Boneless Ribs. The product had been featured in several follow up episodes but success was not immediately clear. In a recent episode, the founder and John appeared in a visit to Carl’s Jr./Hardee’s headquarters to finalize a deal to provide the product for the new Baby Back Rib Burger.

The brands have made overt efforts to turn their image away from the sexy girls eating messy burgers. The appearance on Shark Tank is not exactly aligned with the more dramatic efforts the brands have made, but certainly a departure from the bikini era.

The show claims 8-10 million regular viewers, no mean feat in today’s fragmented media environment. CKE reached a group of consumers with information about a product they had been learning about for 4 years to announce their new sandwich. Where the brands may have missed on reaching a mass audience with their recent activation on Twitch, they have capitalized on this loyal audience with a strong product introduction.

There are two related questions. First, who exactly did they reach? Assuming the brands are driving in include a slightly more balanced gender in their new media strategy; they have achieved that. But from an age standpoint, they probably missed their largely young male audience getting a large portion of Gen X and Boomers (gasp) in this Shark Tank play.

Second, will viewers turn out for a sandwich like they have for products like the Scrub Daddy? The top performing products have tended to be no-brainers, like a better sponge or a simpler way to exercise. This burger is far from a no-brainer for average consumers. It will appeal much more to males, and hungry males at that. What is not known is the cost CKE paid for the appearance, if any. Without that data, it is impossible to judge the move.

Time will tell whether the Shark Tank effect can carry an LTO.

Keep guests in your vision statement

Read the vision statement of some of the top dining brands and you’ll notice something quite odd. It’s focused solely on the success of the brand, and not at all on the people the brand exists to serve.

For example, Chili’s vision statement is “Chili’s love by 2020.” What on earth does that mean? To guests, absolutely nothing. Applebee’s is a list of corporate values. More of an appeal for shareholders than guests. Chipotle? “Change the way people think about and eat fast food.” It involves guests, but isn’t clearly about improving things for them. Panera Bread says “A loaf of bread under every arm.” Technically guests have arms, so we’re getting warmer.

The ideal vision statement is about the company and the specific thing it will do for customers to reach its big goal. Or at least a reference to what customers get from the brand that will help the brand get there. When the vision statement is solely inwardly focused, it’s telling. The Chili’s vision reads like the experience many guests have when they go to Chili’s; more about the brand moving customers than the guest’s visit. How do they hope to achieve Chili’s Love? Also, what?

If you are in the restaurant business, you exist to serve people.

McDonald’s vision is a very long and winding paragraph that includes references to the experience, their number one product and their guests. It feels very much like what you might believe McDonald’s is striving to achieve. Starbucks leaves out guests but puts a heavy focus on top-tier quality, integrity and corporate growth.

If you are in the restaurant business, you exist to serve people. If taking care of people or trying to give people a good time is not of interest to you, do something else. This is why it’s critical that any vision be centered around the guest. What will you provide your guest to grow your brand? That may sound difficult to define, but that’s the key. It’s the difference between independent restaurants and chains.

The sole proprietor or chef-led restaurant is still focused on guests. On delighting them. On pleasing them. On earning their next visit. Chains tend to lose this focus as they grow and expand into new markets. Corporations add words like integrity and supply chain to their visions to appeal to shareholders. Independent restaurants work for every visit and successful locations never lose site of the guests. To be fair, independent restaurants do not have a vision statement.

That’s part of the problem for large or growing brands. The vision statement is meant to direct the entire company towards a goal. A big goal. It’s interesting that many (most?) audacious futures don’t have customers. Chili’s Love by 2020. The vision statement should definitely include customers if only to identify the party that will fund this future state. But that’s a copout. A focus on the ‘love’ of the brand is not a destination that can ever be reached. It’s incredibly heady and vague. NPS and sentiment data are valuable tools, but neither is an effective way to measure the vision of the brand.

This post was inspired by and borrows from this fun and inappropriate episode of The Brand Hole podcast.