Fast Casual Restaurants Identify New Daypart Opportunities with Customer Analytics

The fast casual segment has secured its place as the darling of the foodservice industry with an 8% increase in restaurant traffic – compared to a 2% decrease from casual dining restaurants.

It’s no secret that both casual dining and quick service restaurants are green with envy given fast casual’s continued success and are trying to take a page from their book by offering higher-quality menu options, modifying service styles and launching fast casual spinoffs.

This has forced established fast casual players to look for ways to differentiate themselves in order to maintain the upper hand – resulting in an increased focus on nontraditional dayparts such as breakfast, snacks and alcohol.

Breakfast: Fast casual chains are gaining in the battle against QSRs by expanding breakfast offerings. Since 2011, the top fast casual brands have increased their breakfast options by 31%. However, while some fast casuals are enhancing their breakfast offers, only 31% of brands have a breakfast selection – which suggests there’s a sufficient amount of space for new entrants and an opportunity to increase market share.

Grab a Bite: A different route of menu expansion for fast casual restaurants is throughd between-meal snacks as they account for 20% of all eating occasions with roughly 48% of consumers saying they snack at least twice a day. This implies that those who concentrate on creating an enticing snack menu will have an opportunity to draw in between-meal consumers, boost traffic throughout off-peak hours, keep customers engaged with the brand and boost sales of higher-margin items.

Let Me Buy You a Drink: Another tactic fast casual restaurants are employing as a point of differentiation is the sale of alcoholic beverages. Over the past few years, there have been a number of fast casual restaurants, such as Noodles & Co. and Pitfire Artisan Pizza, that are focusing on penetrating this space in hopes to attract new customers and appeal to the Millennial demographic. Even Shake Shack, who has offered alcoholic beverages since its inception, upgraded their experience by partnering with breweries to produce private label craft beers, which are only available in stores.

Profile Every Daypart

To truly understand the potential that each daypart segment has, it’s imperative to drill down and see what differentiates your guests by daypart – because variations do exist in customer profiles based on daypart usage.

For example, you could use a map view from Buxton’s SCOUT® showing how the customers, represented by dots, and the trade area for the same restaurant change by daypart. This type of information is one of many factors used by fast casual restaurant operators today to guide their targeted marketing and site selection decisions.

How do you identify and quantify new daypart opportunities?

The answer can be summed up in two words: customer analytics.

With either your time-stamped transaction data or by combining your customer data with Buxton’s credit card partner transaction data, it’s possible to develop customer profiles based on daypart consumption patterns.

Buxton is able to build departmental models so their restaurant clients can understand the affect of evolving competitors and customers have on different daypart’s sales.

With these models, Buxton restaurant clients optimize operations by determining which daypart(s) would be effective if introduced and which daypart(s) wouldn’t by forecasting each locations performance.

This would translate to finding each location’s optimal performance in each segment, resulting in a more profitable site location and store formatting.

From a marketing perspective, understanding how the customer profile changes based on daypart and having a full 360 view of what the customer looks like in a specific trade area during a specific time, will allow you to better target promotional efforts. 

The Bottom Line

The introduction of different dayparts gives fast casual operators a chance to drive growth, expand their customer base and offer a new type of experience for current customers. In spite of the benefits, fast casual operators will face new competitors and changing customer profiles over the course of the day. In order to capitalize on new daypart opportunities, it’s essential to come to the table with the competitive edge given by customer analytics.

To learn more about how customer analytics can help turn fast casual restaurants’ challenges into opportunities click to download our Fast Casual Industry Report.

Journey Awareness Persona C-Suite/Finance Restaurant