Thursday, June 20, 2013 | Edited by Daniel Moores
||Menu Innovation, Value Drive Limited-Service Traffic
New menu items and value are driving consumer traffic at quick-service and fast-casual chains, according to a recent study from market research firm Placed Insights.
The "Dining Out in America: The Impact of New Menu Items, Value and Nutrition" study compiled data from more than 13,000 consumers polled in April about the restaurants they visited in the prior 30 days and the factors that drove them there. Seattle-based Placed Insights surveys more than 70,000 consumers who opt to share their locations, covering more than 70 million locations of hundreds of businesses.
Quiznos, KFC, Taco Bell and Little Caesars all performed well when it came to driving traffic with menu developments. And burger giants McDonald's and Burger King continued to reign with value-conscious consumers.
Placed Insights surveyed consumers about which characteristics of a restaurant were important to them, including taste, price, nutrition, convenience and menu variety. The firm identified which brands performed best by checking those key factors against those consumers' restaurant usage. Consumers indicated which characteristics were most important.
Several chains ranked in the top five brands per characteristic on two different factors, including Zaxby's, Chick-fil-A, Five Guys Burgers and Fries, Sonic Drive-in, Jack in the Box and Hardee's. Guests who identified taste as important were more likely to visit Zaxby's, Chick-fil-A and Five Guys. Burger chains such as Sonic and In-N-Out attracted price-conscious consumers. Health-conscious diners favored Jamba Juice and Chipotle.
The power of new menu items
Placed Insights sought to quantify the effectiveness of new product introductions and limited-time offers in driving restaurant traffic by asking survey respondents, "After seeing or hearing an advertisement for a new fast-food item, did you purchase that item in the next 30 days?"
According to the report, 36.5 percent of respondents said they had tried a new item they had seen advertised, making them "early menu adopters," compared with 42.6 percent of respondents who had not visited a restaurant quickly to purchase the new item.
Placed Insights studied restaurant usage patterns of self-identified early menu adopters and indexed which brands they were likely to visit more often than regular consumers. Quiznos performed the best with those consumers. Its index score of 119 meant that early menu adopters were 19 percent more likely than regular consumers to visit a Quiznos restaurant. The chain currently offers a limited-time Southern or Spicy BBQ Pulled Pork Sandwich.
Yum! Brands Inc.'s KFC and Taco Bell concepts followed, with index scores of 115 and 114, respectively. Both chains have put big marketing campaigns behind new products this year, including KFC's Original Recipe Boneless chicken and Taco Bell's Cool Ranch Doritos Locos Tacos.
Earlier this year, Little Caesars rolled out a major advertising campaign for its new Deep! Deep! Dish Pizza, an $8 offering that the chain called its largest product launch in years. The brand garnered an index score of 114 with early menu adopters.
Chipotle indexed 111 with early menu adopters, despite no TV advertising and few, if any, limited-time offerings. The heaviest advertisers were also accounted for on the list for those consumers, with Burger King's 112 score leading McDonald's, Wendy's and Subway, which scored 106, 105 and 103, respectively.
Dunkin' Donuts indexed slightly below average with the early menu adopter group, at 99.
McDonald's rules the value space
Consumers who had recently visited McDonald's, Burger King or Wendy's were also surveyed about their habits regarding those chains' value menus.
McDonald's Dollar Menu proved to be the most popular, with 77.3 percent of visitors ordering from the Dollar Menu in the past month. Wendy's menu finished second, with 59.5 percent of its customers using Right Price Right Size. Burger King was just behind, with 58 percent of its customers ordering from the BK Value Menu.
Consumers with children had a higher propensity for using value menus than people without children. Burger King indexed highest with this group at 110, compared with 104 for Wendy's and 103 for McDonald's, the report found.
Burger King showed no gender bias in those who ordered from its value menu, while both McDonald's and Wendy's skewed female, with index scores among women of 106 and 104, respectively.
McDonald's Dollar Menu indexed highest with consumers in the 18-to-24 age group, at 115, while Burger King skewed oldest, garnering an index score of 117 with the 35-to-44 demographic. All three chains' value menus indexed above average with consumers making $25,000 per year or less, with no significant differences in income distribution, Placed Insights found.
(Source: Nation's Restaurant News, 06/14/13)
To download a complete copy of the report, please
visit the website for Placed Insights.
||The Leisure Pack is Back
It was after midnight, and Leilanie Ramos just wanted clean clothes.
An event planner for a satellite communications company, Ms. Ramos was halfway through a stretch of back-to-back trade shows that kept her on the road for nearly two weeks. She checked into her hotel in Tampa, Fla., after a late-night arrival from Istanbul with plans to do her laundry at the hotel's facility, figuring she would have the machines to herself at that hour.
"There were two other people doing laundry at almost 1 o'clock in the morning," she said. Since there were only two washing machines, Ms. Ramos had to wait, finally getting to bed around 3 a.m., she said.
"There's a lot more people where you don't expect them to be," she said.
For a few years, business travelers had lobbies and lounges (not to mention laundry rooms) to themselves. It was a silver lining of sorts, even if the economic outlook was grim, consumer confidence was shaken and personal finance experts promoted the benefits of the "staycation."
This summer, that trend is over. The U.S. Travel Association says leisure travel will hit a record high this year, while belt-tightening in the hotel and airline industries means packed houses all around. "Now, it's a free-for-all," said Jeff Butler, an engineer for a company that makes broadband equipment whose work takes him on the road three to four days a week.
"Leisure travel is back, and it's back stronger," said Alex Tonarelli, general manager at the Loews Miami Beach Hotel.
Scott Berman, principal at PricewaterhouseCoopers Hospitality and Leisure, said that from a hotel industry perspective, that's good news. "People are feeling better about themselves," he said, making them more likely to indulge in a vacation this summer.
PricewaterhouseCoopers predicts that the average hotel occupancy in the United States this year will reach 62.2 percent, the most crowded that hotels have been since 2007. Planes are also "chockablock full," said the airline industry analyst Robert W. Mann Jr., who predicted domestic flights would be 84 percent full this year. "It means everyone is sharing an armrest," he said.
Business travelers wistfully remember when they had elbow room -- or even an entire row to themselves -- on flights that left at inconvenient times. "The early morning flights that used to be just business travelers are now filled with people on a discount fare," Mr. Butler said.
What's more, he said, the Transportation Safety Administration lines aren't as fully staffed at odd hours, making the wait to be screened even longer. "It never used to be that bad," he said.
Ms. Ramos said she remembered when "you'd have empty seats next to you for those red-eyes and long international flights; you could easily stretch out." But on her international trips so far this year, she said, "All of the seats were taken."
Barry Richards, a vice president for production at a company that creates media for hospital marketing, said he was seeing a lot of completely full flights.
"The thing I always watch out for is families and school groups and anybody who doesn't look like they have much experience traveling," he said. "I don't want to be behind somebody that requires a lot of re-scanning."
Business travelers say they find themselves stuck in long lines more often at hotels, too. On a recent trip to Las Vegas, Mr. Butler said his hotel's front desk was overwhelmed, even with five people working behind it. Most of his fellow travelers didn't appear to be visiting the city on business, he said, adding, "They were folks that were there to have fun in Vegas."
"It was crazy getting through," he said. "I probably waited close to an hour at check-in."
In some cases, business travelers can't even get a room. "We seem to encounter more and more sold-out hotels," Mr. Richards said. "In the past, we haven't run into that a whole lot." He said in his 15 years of business travel, the competition for rooms was never this fierce.
The shortage of hotel rooms is a combination of two factors, Mr. Berman said. Demand is booming, but few hotels are opening because the credit crisis left developers unable to get financing to build them.
To avoid the noise that is an inevitable part of more crowded hotels, business travelers say they request rooms in less-trafficked parts of hotels: upper floors and corner rooms far from elevators, ice and vending machines.
Sometimes, though, business travelers find it's impossible to escape. At a recent stay in New York City, Mandy Arnold, an advertising company president, said she had been looking forward to unwinding in the evenings on the hotel's roof deck but was thwarted by a noisy, boisterous group of about a dozen people "taking over the area as if it was their living room," she said. "They were out there every night. It was a bit of a letdown."
The revelers had gone so far as to bring a cooler and set up a portable grill in the ostensibly shared space. "As a business traveler, you get annoyed when you can't relax," she said. "It's that additional noise in the background."
Hotel managers have to walk a tightrope to keep freewheeling vacationers and stressed-out business travelers happy.
At the Loews Miami Beach, Mr. Tonarelli said the hotel restaurant had some quieter sections away from the banquettes where families are seated.
"If we've got a busy family weekend but we have a convention in-house and we see two or three businesspeople that come down with their iPads and their suits, we identify that and we'll do everything possible to seat them in those areas," he said.
Knowing his hotel's typical traffic pattern helps his staff anticipate waves of business or leisure travelers, said Mark Pardue, general manager at the Grand Hyatt New York.
"There are instances where, on the weekends we'd use an empty meeting space for kids' movies and games." Doing this, he said, "keeps our hallways free and clear and the tranquillity of our hotel intact."
(Source: The New York Times, 06/18/13)
||Gatsby-Style U.S. Weddings Show Confidence to Spend Big
Lauren O'Shaughnessy has boosted prices for her wedding-planning services by about 25 percent since 2009 as the economic expansion puts Americans in the mood for bigger parties and fancier locations.
Spending on the average wedding in the U.S. climbed 5.2 percent to $28,427 in 2012 from a year earlier, according to XO Group Inc., a New York-based company whose websites include theknot.com and WeddingChannel.com.
"People do feel more comfortable spending their money than they used to," said O’Shaughnessy, a 29-year-old partner at Bellafare LLC, an event and wedding-planning company in New York. "We're busier, the stuff we're getting is much more grand, and we've had to hire more people to help us out with everything."
Further strides in employment, record household wealth from rising home and stock prices, and consumer confidence at a five-year high will help sustain such discretionary spending gains. More lavish special events, from weddings to bar mitzvahs, have sparked stepped-up hiring in the leisure and hospitality industry and kept the bubbly flowing for companies such as Martha Stewart Living Omnimedia Inc. and Signet Jewelers Ltd.
"There are those who, as the economy returns and improves, are ready and willing and anxious and excited to spend more and to maximize the celebration of the biggest day of their life," said Brian Beitler, executive vice president of Conshohocken, Pennsylvania-based David's Bridal Inc., the U.S. largest wedding-gown retailer.
Rising property and stock values are boosting consumer finances, helping Americans cope with higher payroll taxes. Household wealth jumped to an all-time high in the first quarter, exceeding its pre-recession peak for the first time, the Federal Reserve said on June 6. Net worth for households and non-profit groups increased by $3 trillion, or 4.5 percent from the previous three months, to $70.3 trillion, the Fed said.
Demand for new homes helped propel confidence among U.S. homebuilders to the highest level in seven years in June, according to the National Association of Home Builders/Wells Fargo index of builder sentiment released on Monday.
A report last week showed sales at retailers rose more than forecast in May, indicating consumers will help propel the world's largest economy past a second-quarter slowdown. Purchases increased 0.6 percent, the most in three months, the Commerce Department said.
"There are some indicators that consumers are finding their stride," said Josh Holland, a spokesman for Blue Nile Inc., an online retailer of diamonds and fine jewelry. The Seattle, Washington-based company, founded in 1999, estimates it sells half of all U.S. engagement rings purchased over the Internet. "More people bought a Blue Nile diamond engagement ring in the first quarter of 2013 than in any other first quarter in our history."
Signet Jewelers, which sells engagement and wedding rings under Kay and Jared brands, reported an 8.1 percent increase in same-store sales in the U.S. for the 13 weeks ended May 4. Last year, the company recorded a 1.2 percent increase in the comparable period.
New York-based Martha Stewart Living said advertising revenue from its Weddings magazine rose 6 percent in the first quarter, and it's "encouraged" by the levels seen in April, according to comments by Chief Financial Officer Kenneth P. West during an April 30 conference call with analysts.
Stronger demand is allowing companies to raise prices. The average cost of a wedding dress climbed to $1,211 last year from $1,121 in 2011 and $1,099 in 2010, according to XO Group.
Hollywood is playing a role, too. Some couples are inspired by the Roaring Twenties style of opulent parties, rich diets, slinky knee-length dresses, champagne and diamonds, as pictured in "The Great Gatsby," a 3-D movie released earlier this year that stars Leonardo DiCaprio.
"We also see, with pop culture, the release of 'The Great Gatsby,' a revival of looking to things that are nostalgic," Beitler said in a phone interview. "There's been a focus on vintage-style dresses. Lace has been a very large and growing trend."
The increase in wedding budgets marks a turnaround from the recession, when the number of people getting married dropped to 6.8 per 1,000 population in 2009 from 7.3 two years earlier, and the rate of household formation declined.
While the marriage rate remained at 6.8 in 2011, the latest figures available, more recent data suggests more young people are making up households.
Among adults 34 or younger, 37 out of 100 were heading a household last year, up from 36.7 in 2011 and the first increase since 2005, according to Pew Research Center analysis of data from the U.S. Census Bureau and the Labor Department. "Economists are interested in household formation as well as marriage trends, for what it means for home-buying, and all these expenditures that come with home-buying," said Richard Fry, a senior economist with the Pew Research Center's Social & Demographic Trends project in Washington. "When you buy a home, it's not just a home, there is a whole bunch of consumer durables that are associated with it. You've got to equip the home."
The increase in event spending goes beyond weddings, to other family celebrations, such as bar mitzvahs and bat mitzvahs, according to Cigall Goldman, a 35-year old founder of Mazelmoments.com, a website for planning Jewish events.
Glenn Sherman, a 58-year old cantor at Century Pines Jewish Center in Pembroke Pines, Florida, was hired by a family from the suburbs of Albany, New York, to perform a rain forest-themed bar mitzvah in Costa Rica. Last week, he was in Cancun.
Americans have "definitely more money to spend on these events," he said. "I am booking a bar mitzvah in Hawaii for next year."
(Source: Bloomberg, 06/17/13)
Daily Sales Tip: 'Let's Do This'
Get advances if you can't close.
"Let's do this" is a proven technique that allows you to talk about the next steps in the process while you move your prospect forward toward a final decision.
Let's suppose you're an hour into the sales call and the prospect has shared with you some of the problems he has, but he's still unsure of your product or service's value.
You want to go back to your office and study them prior to giving a proposal. In this case, you would say, "Let's do this. I'm going to go back and put some thought into this and then let's set a time we can come back in a week and take it a little further."
The better process manager you are, the better salesperson you are.
Source: Sales trainer Bill Caskey