4 Game-Changing Restaurant Trends to Watch in 2018 | Food Newsfeed
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4 Game-Changing Restaurant Trends to Watch in 2018

February 13, 2018
Happy friends drinking coffees and cappuccinos at bar cafe

Ready to Order

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Ready to Order

The growth of online and new preferences set by millennials and Gen Z are changing the restaurant industry: delivery is becoming a prerequisite, the number of guest touchpoints is growing, and the face of competition is shifting from fast casual toward more convenient offerings. In 2018, we expect these trends to further develop as restaurants carefully measure and refine their new innovations. Based on our experience working with leading restaurants globally, here are four trends to watch in 2018.

Close up hand holding mobile phone with order food online word on screen.

1. Delivery Serves Up New Challenges

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1. Delivery Serves Up New Challenges

As restaurant orders go increasingly digital, many chains are implementing and expanding their delivery programs—be it in-house or through third-party services. Meanwhile, delivery provider DoorDash has opened a commissary kitchen to provide kitchen space for delivery-only restaurants. OneChicago Pizzeria is even working with UberEats to create a “virtual restaurant,” by cooking up chicken in addition to pizza offerings as a means to fulfill guest demand for fried chicken in an area where it is not otherwise available.

In the coming months, we expect restaurants to seek clearer answers to the multitude of questions that come with delivery: Are there too many delivery players in the market? Do third-party services win over in-house delivery? Is delivery even the right option? Would another strategy, such as wait-list technology, have a greater payoff? And, which menu designs are most conducive to transportation and add-on purchases? To develop profitable delivery services and compete with the range of offerings out therefrom meal kit delivery services such as Blue Apron and in France, a concept called “Chefing” (the idea of ordering homemade meals online), to the new platforms that are powering more orders for competitorsrestaurants will need to use business experimentation to measure the impact of these new programs and answer a range of questions before broader rollout.

Chef cook decorating dessert for guests at a restaurant.

2. Guests are on the Loose

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2. Guests are on the Loose

In the fight for guest attention, more restaurant loyalty programs are cropping up, and restaurants are engaging with guests via more channels and outreach tactics. In Asia, for example, mobile devices and payments are taking a stronghold across industries, and many restaurant chains are keeping in touch with guests via loyalty apps, offering ordering and incorporating mobile pay directly into the functionality. Even social media platforms like Snapchat are now providing guests with the ability to book reservations through the app.

As brands increasingly contact guests in their homes and during their day-to-day activities, restaurant players are feeling like their guests are on the loose—constantly being contacted and notified by so many businesses, raising the question: How can you win the most mindshare? To remain ahead of the curve, restaurants must first determine whether loyalty programs are the right fit to their brand—will penetration and usage grow to valuable levels, beyond usage concentrated among loyal guests who are engaging with the brand? If the answer is yes, the question becomes how to best launch new loyalty initiatives, grow loyalty usage, optimize guest outreach, and communicate via different channels. For each of these initiatives, it will be critical to understand which combinations of platform, messaging, and timing will be most effective with each guest segment.

Cheeseburger at Shake Shack in New York City.

3. Mom-and-Pop, Convenience, and Grocery Stores Earn a Slice

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flickr: Pamela Graham
3. Mom-and-Pop, Convenience, and Grocery Stores Earn a Slice

In addition to incumbent players, mom-and-pop, convenience, and grocery stores are making a play for restaurant share as global consumer demand for immediacy grows. Newer, “full offering” convenience and grocery stores like Sheetz and Wegmans are offering additional made-to-order meal offerings and upscale coffee bars to drive trips to their stores. In Asia, a grocery subsidiary of Alibaba called Hema is aiming to drive business with an in-store restaurant that cooks consumers’ food. At the same time, newer players in fast casual like Cava are receiving funding to go national, and Shake Shack owner Danny Meyer is going after “fine casual,” a new concept that includes elements like high-quality ingredients and upscale counter service.

When it comes to sizing up the competition, taking a test vs. control approach to analyze the impact of competition on the business and various customer segments will help refine chains’ responses to future competition. After pinpointing the market- and store-level challenge, restaurants need an accurate understanding of consumer behavior outside of their four walls to understand which guests have the most potential and the design outreach that resonates with them to best engage guests and personalize outreach.

Kiosks at a McDonald's in Switzerland, where guests can order food without talking to employees.

4. The Restaurant of The Future

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flickr: McDonald's Switzerland
4. The Restaurant of The Future

Amid growing questions around delivery, guest loyalty, and new competition, restaurants are quickly rethinking the role of the store as a means to remain relevant and compete with other channels. Though retailers are shuttering stores, the number of restaurant locations is booming: at the end of Q1 2017, there were over 600,000 restaurants open in the U.S., up more than 10,000 locations in the past year—which makes winning traffic increasingly difficult.

So, what does the “Restaurant of the Future” look like? It has technologies such as digital menu boards, ordering kiosks, tabletop tablets, and in some cases, in-restaurant robots. This year’s trends in focus include trialing “cashless restaurants," a concept Sweetgreen and Eatsa are already exploring to smooth the ordering process and provide a more connected loyalty experience to guests. In fact, leading players like Eatsa are even pivoting to licensing their technology to other restaurants At the same time, catering to millennials and Gen Zs’ thirst for experience has become critical: in-restaurant attractions such as engaging atmospheres and “Instagrammable” menu items are the new big hit. And, while these offerings may drive guest engagement and traffic, restaurants must be careful to ensure these experiential bells and whistles are truly driving enough sales to pay off in the long run.

An empty restaurant with lights hanging from the ceiling.

Closing Thoughts

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Closing Thoughts

In 2018, restaurants will continue to encounter new opportunities to grow their businesses. However, before implementing new strategies, they must develop the capability to quickly measure their impact and enable data-driven decision-making. Leveraging powerful market- and guest-level insights to design new programs, and measuring them through smart business experiments, is the quickest and most reliable way for organizations to learn which ideas work and which don’t, empowering them to make winning decisions and hone their competitive advantage.

Jonathan Marek, Senior Vice President, APT, leads engagements with casual dining, quick-service restaurant, specialty retail, big box retail, and banking clients. He has helped clients improve performance through better capital strategy, new concept development, emerging media strategy, media optimization, store labor planning, and site selection. Marek has over fifteen years of experience applying quantitative techniques to critical business issues. Prior to joining APT, Mr. Marek served as a Principal at Oliver Wyman (formerly Mercer Management Consulting), where he advised multi-unit retailers on new business strategy, network planning, and operational process issues. At the firm, he drove several field-based change efforts with Fortune 500 companies. He has led engagements across North America, Latin America, Europe, and Asia.