Competition driving need for better insight - Peach seminar

The scene for the seminar was set by Peach founder and CEO Peter Martin, who described the market as “Flat, fickle and fierce”. He sounded cautious optimism for 2013—“It’s not going to fall off a cliff, but it’s going to be another tough year” and added: “People are still going out and spending, but there’s no elasticity there. If you’re going to grow your sales it’ll be from new openings or taking market share.” He pointed out that customers are getting much more promiscuous in their eating out, with average brand repertoires rising from four to seven over the last two years. But it’s not all doom and gloom, as recessions often turn up some big successes. “Competition is as tough as I’ve known it—but there’s also more innovation and creativity out there than ever before.” Differentiation is crucial, he concluded. “The key is you need to stand out—to be advantageously different.”

A session from Paul Madden, director of customer experience and digital innovation at Mitchells & Butlers, reminded delegates of the value of social media but the difficulty of turning it to their advantage. Platforms like Facebook and Twitter can be great for gathering feedback, but they can also attract customers who have had a bad experience with a brand; 10% of M&B’s complaints now come through these channels. The solution is to invest in time and resources so that every comment can be acted on, said Madden. “This is a space that isn’t quite ours to own—the guest sees it as theirs. We’re going to get complaints here, and we’ve got to embrace that.” Operators should use sentiment and semantic analysis to make sense of the unstructured data they collect on social media, and need to make responses to comments a 24/7 mission, he advised.

Nielsen Harrap, associate partner at CACI, used the seminar to highlight the importance of location planning, noting in particular the forays of many operators away from London amid tough market conditions. “We’ve seen London is not quite the recession-proof collection of little villages that we once thought.” He also pointed up the clustering of emerging concepts in edgy areas of London like Shoreditch and Clerkenwell, and the way the capital’s new Crossrail development might open up more districts to established operators.

The need for insight is not limited to pubs and restaurants, the seminar’s panel session heard—investors want it too. Peter Kemp-Welch, director at Piper Private Equity, said sounding out what consumers thought about a brand was very useful, while Ali Aneizi, co-head of leisure and hospitality at Baker Tilly, pointed out that operators’ wide spectrum of data was subject to close scrutiny. “There’s a lot more rigour and analysis now than there has been before... Companies are often surprised at how demanding that due diligence can be.”

The session also burst some myths about a demographic that is crucial to pubs and restaurants—18-to-30-something ‘Millennials’. Paul Flatters, managing partner at social futures research consultancy Trajectory, said popular images of this group—as economically hard hit, socially introverted and unruly—were largely undeserved. His Trajectory colleague, analyst Tom Johnson, was equally adamant. “The idea that in-home entertainment is trumping the experience of going out for these people just isn’t true. Neither are the images of them as drunk and disorderly or retreating from the real world into the digital one.” Value appeals to them—but it’s not the be-all and end-all, said Flatters. “Brands that are successful with Millennials are those that offer value but have values too.”

Peach’s Peter Martin returned to wrap up the seminar with some insights into brands—which are more popular than some think. “Focus groups might tell you that people don’t like brands—but they do.” The reassurance and reliability of brands plays well to cash-strapped consumers, but it makes for a ferocious battleground for pubs, casual dining restaurants, fast food giants and retailers. He also flagged up Peach BrandTrack research showing that customers value quality food a bit more than operators might realise. Value for money is important, for pubs in particular but perceptions of quality, freshness and healthy eating are just as significant. “The figures show us that food quality trumps value just about every time.”

Peach’s 2013 Consumer Insight and Market Trends seminar was staged in association with CACI. For more from it, see the next issue of Peach Report, out soon.