Relevance and sinking restaurant brands

Nation’s Restaurant News published this article about 5 brands facing trouble in 2017. It is a list of brands you could probably name if you’re familiar with the industry. In the article, Jonathan Maze cites traffic and cashflow as common problems among the group.

There is another common element among the brands listed and others that could have just have easily been added. Relevance. The way the brand fits into consumer’s lives. How they see the brand. The ways the use the brand. And it manifests in several ways.

Specific uses

Buffalo Wild Wings has done a fantastic job educating consumers that the brand is used for sports. Wings. Beer. Sports. Come here, watch sports. In effect, they spent millions to own a broad occasion. Much more common than a birthday, but still specific. Their ads and in store materials tell consumers ‘If it’s sports, be here.’

True, sports have become ubiquitous. But big sporting events are limited. But as ratings for the NFL have dipped, so have sales numbers at BDubs. And aligning wings with the event has also trained consumers that they only go there when they want wings, and that wings are all they are good for.

The brand has created a relevance problem by being so specific. They are relevant to a simple item, and an occasion the brand doesn’t own or control.

Brand fit

Ruby Tuesday has a wholly different challenge. It’s a brand that stands for nothing, despite many fits and starts over the past few years. RT latched onto updated Americana at a time when Americans lost site of Americana is. Though a national footprint, the brand never reached the national status of Casual Dining contemporaries TGIFridays or Applebee’s.

When grasping at nostalgia, which is becoming more and more common, there has to be a memory to draw from. Chili’s is attempting to create a historic sense in its latest campaign featuring visuals and music from the 70’s, the time of its launch.

Part of Ruby Tuesday’s challenge is bigger than its brand. People don’t know how they feel about casual dining. The entire category is at risk in 2017. Fast Casual has capture many occasions with their combination of similar quality, more novel flavors, faster experience and lower cost. If there is a sit down meal to be had, suddenly Casual Dining brands like Ruby Tuesday are competing with local brands or independents with higher quality product and often competitive costs.

The brand has to tell consumers how it fits into their lives. Buffalo Wild Wings, despite its current challenge, has done a great job of being clear about the intended time for a visit. When is the best time to visit a Ruby Tuesday? That’s not quite as clear.

Don’t muddy the experience

Applebee’s also made the list after a huge disappointment. Facing the threat to Casual Dining, the brand correctly concluded that change was needed. They opted to combat Fast Casual by upgrading their food with hand cut steaks and installing grills. They were able to convince franchisees and stakeholders to make this leap.

It sounds like the beginning of a successful case study. But as you know, it’s not. Relevance is the reason why. Applebee’s, despite challenges in sales and traffic was still more often used than most of it’s Casual Dining contemporaries. People know how to use the brand, and they offered several successful day parts.

This is why steaks and gas failed to draw consumers. That’s not the experience they know the brand for. That’s not why they go there. Applebee’s is not a steak destination. Steak brands are known for steak first. Outback, Lone Star, Long Horn, Morton’s. A commitment to moving the perception of the brand to a legitimate place for steak is much more than installing grills.

Steak brands feature steak. Applebee’s introduced it more like an LTO. Most consumers are
drawn to an LTO at a price they’re willing to risk. The perceived cost of a steak probably scared off those that were interested.

Comparison shopping. Brands are tested against a wide array of experiences.

If you kept a dining journal you might be surprised at the varied names that appeared. People don’t have a loyalty to most restaurant brands. Never mind a single dining format. Know anyone that goes exclusively to fast casuals and never sits down at a casual dining establishment? Know anyone that truly avoids every type of QSR?
People have a wide array of options and a larger pool of comparison.

No, if you looked back at the location data stored in your phone, you would find something surprising. People choose restaurants of all shapes and sizes depending on a variety of factors. F & RM has examined this in our study. Beyond restaurants, people eat or purchase meals at convenience stores, gas stations, food courts, kiosks, family entertainment centers and theaters. How does your brand stand up to the comparison?

If you launch a restaurant brand today and hope to identify a tight group of competitors, think again. A concept like Studio Movie Grill is offering something no other casual dining place can; first run films. C-stores have upgraded their food offering. It’s on par with many QSRs and some even survive comparison to Fast Casual. Brands like Pizza Hut have softened the entry point on the pizza category through their entry in to QSR and drive-thru formats. Brands like Hunt Brothers and Quick Trip have a solid quick serve pizza offering. The middle ground is shrinking.

Each restaurant brand is used for a different range of purpose. It solves a different problem for the customer. We add more potential solutions for each situation or day part. The comparison between the solutions for each day part is natural. How does my quick morning pick up will go? Starbucks, Quick Trip, Dunkin’ Donuts, Panera Bread, the local deli. Which best meets the need?

But it doesn’t stop there. Food is sensory. Service is emotional. Both of these elements create lasting memories for customers. Those memories aren’t constrained by rationality. People do compare the pizza they got from a drive-thru to the great pizza they got at a family restaurant. They absolutely do. How do you suppose that comparison ends for Pizza Hut?

How about customers of places like Jimmy John’s or Capriotti’s? They like the brand, they understand the experience. They know how the prices of each align and how long each takes. Then they go to a convenience store and pick up a surprisingly good ready-to-eat sub on a road trip. That experience is marked in their mind the next time they go into one of those sub shops. The value and food quality are now subject to a new comparison. Is it better than the c-store sub? Is it two dollars better?

In this context, think about casual dining customers. Even a loyalist of Applebee’s will run a similar comparison to food quality when they have a good prepared meal from their grocery store. Again, they do the math on the cost and ask, “Is the service and a soda worth that?”

When we price in service on top of COGS we price against similar concepts. We look at the other brands that look just like us. So often, brands limit their competitive set to only ‘like’ concepts. It’s time to expand on that. Because that’s what customers are doing.