Due to the global pandemic, the restaurant industry is currently stranded on an island that is slowing sinking into the ocean. The ones who start building themselves a boat are the ones who have a chance at discovering new dry land before it is too late.
Many restaurants are evolving into cloud-kitchens whereas many are still operating as conventional brick and mortar shops. No matter the choice of boat, the restaurant industry will always need its customers to paddle in the right direction. Thus, this article talks about how a restaurant can elevate its business processes to better cater to its customers by leveraging the power of data science.
Data should be the underlying basis for decision-making in all businesses including restaurants. However, most restaurants fail to understand this distinction because they do not know where to begin.
The first step in being able to implement data science is to have a manageable system in place for storing and handling data collected from all possible channels of interaction. Some examples of data that can be collected by a restaurant are data obtained from restaurant orders, customer feedback, ratings, the waiting time for order fulfilment, tip received, billed amount, etc.
By performing an early data audit, restaurants can make sure that a proper data collection and management pipeline is in place and that they do not leave out any valuable information behind for their business. This also leads to the possibility of performing advance data analytics and training Intelligent Machine Learning models in the future.
Upon ensuring that a proper data collection channel is in place, it is now time to analyze the historical data points of customers to gain insight about them and their preferences. This is also known as Customer Analytics.
A general process of Customer Analytics applies an STP Framework that stands for Segmentation, Targeting, and Positioning.
Segmentation is the process of dividing a population of customers into groups based on the similarity of demographics or behaviour. The segmented groups are likely to have common purchasing behaviour and respond similarly to marketing and promotional activities.
Targeting involves analyzing the segmented group of customers to better understand their similarity pin-points in order to run personalized marketing campaigns, test the launch of a new dish, provide incentives, find up-sell and cross-sell opportunities, etc.
Positioning is the process of modeling a restaurant based on the customer's needs. It defines the way that a restaurant should be presented to the customer such that it connects with their requirements.
In an ideal scenario, all employees of a restaurant would be equipped with real-time analytical reports of recurring as well as new customers while they walk in through the door in order to provide an elevated customer experience.
In the following section, we will try to understand how restaurants are adopting Data Science by taking a look into one of the world's largest restaurant chain.
McDonald's has established itself as a prominent leader of the fast-food industry over the duration of 80 years. The primary motive of the company has been to provide fast service and affordable meals to its customers. A strong focus on customer service and marketing techniques since the beginning has aided the significant growth of the company.
In 2019, in an interview with CNBC Television, McDonald's CEO Steve Easterbrook described how the company has been working on building its technology infrastructure. With technological advancements, McDonald's has introduced mobile apps, digital kiosks, and drive-thrus at their restaurants and malls. This meant that a lot of new customer data was being recorded along with the traditional data from their restaurants.
In order to capitalize on this collected data, McDonald's acquired Dynamic Yield, an AI-based company. The company specializes in customer personalization software using predictive algorithms. This acquisition indicated how McDonald's has been continuously looking into leveraging its data through customer analytics in order to personalize the customer experience.
The Customer Analytics at McDonald's is focused on improving customer experience, getting higher sales, dealing with demands, and research purposes. Here is a list of things that they are doing with the help of data science:
Data Analytics is a growing field of research and has been positively impacting the growth of restaurants. With more and more transactions happening digitally, there is abundant data to be analyzed to make processes more efficient. More companies in non-tech industries are realizing the importance of data which has led to advanced implementations of data science all around the world.
You might also want to read a more detailed article on how can businesses use data science.
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