Businesses inevitably have to wake up to new technologies and adopt them to keep abreast with the changing times. And these are radically changing times. At the front end, the cash registers and menu cards are being replaced by handheld tablets and sophisticated POS technologies. But that is just the proverbial tip of the iceberg. In recent years, data has emerged as something akin to a virtual goldmine. And we have seen more and more businesses, including restaurants, seeking to mine the sea of data available to them both internally as well out in the virtual world.
The "Moneyball" mentality inside restaurants
Nowadays, there are complex software systems that help restaurants keep track of a wide variety of internal performance data like employee performance, sales trends and food orders. Software like Slingshot, Compeat and Hotschedules allow restaurant managers to delve into a world of numbers and statistics, not dissimilar to what was portrayed in the famous baseball movie Moneyball. At a time when the economy is slowly recovering from recession, and the whole food business thriving as a result, this style of data driven business model is gaining credence among the industry as the way into the future.
Milking the social media sphere for data
At the end of the day, restaurants will always have to worry about what the customers think, and more importantly, how they spend their money. And in the current day and age, their minds are made up much before they actually enter the premises of a restaurant. The internet and social media is where it all happens these days. Marketing strategies for the medium are considered essential for the survival of any business these days and the food and hospitality business is no different. Although hard numbers in terms of ROI may remain elusive, social media sites like Facebook offer valuable insights into customer demographics and preferences. And mining the databases maintained by these sites can provide valuable insights into customer preferences. And the best part is, you don't have to go out to get it, since it is all out there just waiting to be gathered.
Money talks like nothing else
While great to attract attention and gain a following, social media does lag behind when it comes to providing accurate data on customer behavior. Comments, likes and tweets do not always translate into business in the real world. But there is one metric that never fails to tell a tale: the amount of money actually spent by consumers. Consumer credit card/debit card spending data, while anonymous, gives some compelling data in the form of raw numbers. In terms of ROI in big data, nothing comes close to this metric in providing accurate figures that can actually be extrapolated on and factored into decision making calls by businesses.
A site that works on consumer spending behavior
And one review site specializes in giving ratings and reviews on businesses (including restaurants) based on customer spending patterns is Bundle.com. The site claims to offer unbiased ratings and reviews on a wide variety of businesses and shops in and around most major cities and states in the US and Europe. The number of businesses featured on site is quite exhaustive. And they cover everything from food and drink to shopping, health services, home improvement and even travel and leisure. And their USP is their huge database on customer credit/debit card spending. But they do have some weaknesses that need to be worked on. They have a proprietary "loyalty score", which purportedly ranks businesses based on customer loyalty. This is one aspect of the site that has immense potential especially for restaurants. Restaurant customers are not overtly known for maintaining strong loyalties. So any index that shows the loyalty rating of a restaurant would have great implications for its business. But Bundle's loyalty meter could do with some work, especially in the algorithm that operated behind the scenes. Restaurants never seem to get more than average ratings on the loyalty meter, but then again, that could be due to the fickle minded nature of restaurant customers in general.
The potential and pitfalls of big data
Bundle is just one of the many promising review sites out there that uses various matrices of big data that are out there in the open. Restaurants can on the one hand gain a lot in terms of workable raw data from these sites. But then again, on the flip side of the bargain, they end up being open for hitherto unheard of levels of scrutiny. Take the case of Yelp.com for instance. The review site plans to include restaurant hygiene scores based on local government inspection data which is openly available online. Big data analysis is like a window into a sea of information. But the thing is, the same way businesses try to glean more and more information about their customers, the customers also get greater information and insights into the business. Often, it seems like a cat and mouse game, with the customers analyzing data about restaurants, while the latter does the same on the former. Open big data just leveled the playing field. And now, there is no going back.