Price-conscious consumers are empowering QSR brands and mitigating third-party services costs: Simon-Kucher
QSRs are targeting different segments to cultivate customer relationships.
As consumers get more price-conscious, QSRs are getting creative with how they present the value of their brand whether through new menu offerings or new experiences, a shift that empowers brands to have more control over customer relationships and even address costs associated with third-party services
These were some of the things Mitchell Taylor, Partner at Simon-Kucher noticed in the past year.
In a quick interview before his speaking session at the QSR Media Australia Conference & Awards 2023 powered by Redbull, Mitchell shed some light on what’s going on in the industry.
What are some interesting changes in the QSR industry you have noticed in the past year?
Over the past year, the industry has seen a few notable developments. One significant shift has been in consumer out-of-home spending habits, influenced by a period of menu price inflation coupled with mounting cost-of-living pressures. Customers have become more aware of their dining choices and the value they are receiving. This has led to QSRs experimenting with their value propositions.
Some are aiming to capture more regular dining occasions with mass-market offers, whilst others are getting creative at exploring new occasions through customer-segmented offers, experimenting with time-sensitive promotional offers. Additionally, there has been a renewed focus on the importance of owned digital channels as QSRs seek to reduce their reliance on third-party delivery aggregators. This shift not only empowers brands to have more control over their customer relationships but also allows them to address costs associated with third-party services.
In your opinion, what are the top challenges in the industry and how do you suggest QSR leaders tackle them?
In my opinion, QSRs face several significant challenges, however, they can be managed through strategic planning.
Firstly, maintaining a positive price/value perception in the aftermath of repeated price increases is crucial. QSRs should focus on enhancing their perceived value through quality improvements, innovation, customer experience, and customer-centric promotions. Secondly, it's imperative for leaders to keep store-level economics in mind when striking a balance between driving transactions and operating profits.
Whilst increasing ticket values can be tempting, it shouldn't come at the expense of foot traffic. QSRs must prioritize strategies that drive profitability while also ensuring that they remain accessible to a broad customer base. Lastly, unlocking new occasions for their brands is essential for long-term growth. QSRs should identify and cater to new customer needs and occasions to drive sales. Expanding visitation amongst existing customers can be more cost-effective than constantly seeking new customers.
Please give us an overview of the unique perspectives you will be sharing during your discussion.
I’ll be discussing the cutting-edge approaches in Revenue Management being used by QSRs. Advances in tech and data have enabled us to make far smarter decisions in this space, to test ideas in a low-cost, highly accurate way, and to generate expected ROIs before an investment decision is made. Still incorporating the classic themes of Price and Menu Strategy, we can now go far deeper and develop strategies particular to a customer set, particular geographies, or particular times of day, supported by systems which allow restaurants to adapt quickly to changing customer needs.
What key takeaways would you like the attendees to gain from your session?
My goal is to inspire QSR leaders on strategies to both grow and monetise their customer base, in an environment where they face macroeconomic uncertainty and increased competition across the industry.
Hear from Mitchell this 30 October, at the QSR Media Australia Conference & Awards. Buy your tickets now. For more information, visit this link.