In-restaurant dining is back. An April report from card-linked offer and transaction-based advertising platform Dosh in partnership with Fast Casual found that 75 percent of restaurant customers are ready for on-premise dining and that a similar percentage of restaurants have reopened their dining rooms. Additionally, research from the April edition of the PYMNTS Delivering On Restaurant Rewards report, created in collaboration with Paytronix, finds that more than a quarter of unvaccinated consumers plan to make more orders in person once they get the jab.
“Right now, clearly, with things opening back up, and the mindset of consumers being more willing to get out and about and function normally, if you want to call it that, there’s a lot of activity,” Rob Kenny, director of restaurant partnerships at Dosh, told PYMNTS in a recent interview. “And so I think what we’re seeing is that restaurants that have those types of promotional-type offerings are the ones that are probably going to going to win.”
Sure enough, we know that the chance to earn deals and discounts does in fact drive spending. Research from the March edition of the PYMNTS and Paytronix Delivering on Restaurant Rewards report finds that almost 4 in 10 restaurant customers would be inclined to spend more if they were offered the ability to earn loyalty rewards.
Assuaging The Initial Sticker Shock
Eating at home, of course, is less expensive than eating in a restaurant. Consumers who have grown used to being thrifty with their food spending could be surprised by the costs associated with on-premises dining.
Kenny noted that, among diners, “there is a sentiment of sticker shock” when the check arrives, leading consumers “to be looking for offers … looking for those locations that maybe offer some type of promotion.”
Immediate cash back is one way to address the economic concerns consumers may be having as they return to restaurants.
“[At] Dosh, we’re providing that cash back moment,” Kenny said. “As soon as that meal is over and that transaction happens, that consumer’s walk away with a smile on their face.”
PYMNTS research finds that the average ticket for a table-service restaurant dine-in order ($42.2) is 10 percent higher than it is for an online order ($38.5) and 17 percent higher than it is for a phone order ($36). Notably, for quick-service restaurants (QSRs), customers actually spend slightly more on online orders than they do on dine-in orders, though average ticket for dine-in and phone orders are the same.
Kenny pointed out, “When we have a cash-back offer on our platform … you’re typically seeing those average order values to go higher.”
‘Next Level’ Loyalty Rewards
Consumers have grown used to interacting with restaurants digitally over the past 14 months. As they return to in-person experience, the expectation of digital integration will likely remain.
Predicting the “next level” of restaurant loyalty rewards, Kenny said, “At the end of the day, it’s going to be technology and it’s going to be consumers’ expectations from how they’ve interacted in the last year from a frictionless environment, the ease of use … It’s bridging what a traditional loyalty program looks like to the digital sphere.”
In addition to card-linked cash-back loyalty rewards such as those Dosh offers, many restaurants have also been investing in their own loyalty rewards programs over the last year, with restaurants that had no loyalty offerings pilot testing new programs and with existing rewards programs getting next-gen upgrades.
Providing A Seamless Experience
Ultimately, Kenny believes, what will separate the top performers from the rest of the pack is how user-friendly a restaurant’s digital experience is. He explained, “I think … the expectation from the consumer is, ‘I want it simple, I want it fast, I want it frictionless, I don’t want to be bothered with swiping or doing anything else. I just want to interact and transact at the place I do business with, but I also want to get rewarded in some regard.”
For Dosh’s own loyalty offerings, this comes down to how simple the company’s offers are to redeem. Because “it’s not a coupon or it’s not a discount on the surface,” he said, consumers are more likely to actually interact with these promotions. Consequently, Kenny noted, “We’re definitely seeing that, across the restaurant spaces, average order values go higher.”
Between consumers’ pent-up demand for in-person experiences and the rapid advancement of digital loyalty in the last 14 months, restaurants have an opportunity to capitalize on this unique moment in time. He noted that the “virtual fatigue” from the pandemic will be propelling consumers into restaurants for on-premises dining, and that restaurants that accompany their dining rooms with immersive experiences have an opportunity to win customers’ loyalty.
It comes back to “having a great experience at a restaurant, whether it’s accompanying it with a live band or whatever that might be,” he said, “but just an experience at the restaurant that’s going to leave you with a sense of, it’s great to be back out again.”