Some in the restaurant industry believe it’s become an obsession—the collection of data, big data, that is.
Big data, as defined by Oxford, is “Extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.”
So, just how is this “big data” being used in restaurants and just how do customers really feel about its use?
It’s being used in a myriad of ways and customers often fall to either side of the data fence—they appreciate the increased customer experience and service it allows, or they consider it an invasion of their privacy and, well, a little creepy.
The Use of Big Data in Restaurants
According to The National Restaurant Association, 35 percent of restaurateurs use big data in order to understand and predict their guest’s behavior. Here are just a few examples of how this data is being mined and used.
Customer Purchasing Profiles
Restaurateurs and others in the hospitality industry argue that today’s guests demand a hyper-personalized guest experience and that the only way to deliver this is through mining data. Not only does this information provide the means for better service, it also provides information that can be used in upselling opportunities, email marketing campaigns, and promotions.
Restaurants get this data via their loyalty program, guest check details, mobile apps, surveys, website, POS system, and third-party vendors like OpenTable or GrubHub.
The number of visits, time, location, order, gender, and age are all potential information gleaned from mining data and creating a customer profile.
According to the Wall Street Journal, after TGI Fridays started using Artificial Intelligence and pulling data from POS systems, social media, monetary transactions and mobile devices, they doubled their to-go business in about one year and increased social media engagement by over 500 percent.
You’re a few miles from your favorite Friday night hangout and up pops a special offer from the restaurant on your smartphone. This is a case of geofencing—the use of GPS and cell towers that find active mobile devices within a certain radius of a restaurant. The restaurant has probably skimmed through your purchase history, knows your buying pattern, and has sent a promotion aligned with this knowledge.
Another big data marketing strategy is geo-retargeting. These pop-up adds are delivered to past customers and are based on past behavior.
Some customers consider this type of marketing helpful—they’ve received information that may help them make a choice they might have let pass by. Others consider it an invasion of their privacy and do not want their location tracked. So, just how do you use it for those folks that find it increases their customer experience, and put a hold on it for those that consider it a little slimy?
If you search for this type of information, you’ll find several sites, such as “Geo Tracking and How to Go Unnoticed” that inform you not everyone is happy with being “tracked.” The best way to go is simply ask. Let your customers know that you use geofencing to share specials and give them an option to opt out.
In 2018, the House of Representatives voted to repeal the privacy rules that would limit how companies like AT&T, Comcast, Verizon, and Charter could use internet customers’ sensitive personal information.
Some representatives are calling for action. The beginning of 2019 saw AT&T claiming that it would no longer sell its customers’ location to third-party service providers. This announcement was in response to several reports that came out regarding the misuse of location services. T-Mobile and Verizon followed suit.
Obviously, there’s trouble brewing in the world of big data, how it’s obtained, and customers that are feeling somewhat stalked.
In order to access a restaurant’s Wi-Fi network, customers are usually required to sign-on through social media accounts or an email address. Some even require guests to like their Facebook page.
This information allows restaurants to connect to the customer via the chosen sign-in protocol. It also initiates automated marketing prompts based on a customer’s location which can trigger a message when they enter or exit an establishment.
According to InMoment’s 2018 CX Trends Report, “Personalization can get too personal and…can veer into ‘creepy’ territory without benefiting the end customer.” In fact, 75 percent of consumers found most forms of personalization somewhat creepy.
In addition to creeping out some of your customers, you may be putting them at risk. Just one example of this is the 2018 Panera Bread data breach in which millions of their customer’s information, including email, address, birthday, and last four numbers of their credit cards, was vulnerable.
Whether you consider this type of marketing monumental or disturbing, remember to consider your individual customer’s opinion.