It seems like everyone is advertising their own restaurant apps these days.
It’s no wonder. Mobile apps (short for “applications”) are a unique component to the smartphone experience — an experience more and more consumers are leaning into every day. 77 percent of all American adults and 94 percent of adults under 30 now own smartphones. The ability to access robust information about absolutely anything at any time has become a staple to our daily lives. Restaurants are, of course, at the center of this evolution.
A growing number of consumers spending money at restaurants in 2018 as compared to traditional grocery stores, but we’re also seeing grocery prices decline as restaurant menu prices rise. With this kind of competition at play, the mobilization of your restaurant’s fare isn’t just smart — it’s essential. And making the decision to dine with you more seamless for your potential customer means showing up where they already are: in the mobile web space.
72 percent of online searches for restaurants are conducted on a mobile device, implying heavily that consumers are making their dine-in decisions on the go. And 6.6 percent of all restaurant orders are now booked online or using a smartphone/tablet app (compared to only 5 percent by phone). So, it makes sense to invest in a restaurant app for your business, right?
Well… not necessarily.
Where Restaurant Apps Are Working
Apps from Domino’s and Starbucks to Chick-fil-A and Taco John’s are dominating the app stores with easy, one-click ordering, new rewards programs, and instant offers for free food — often just for downloading the app. And it’s absolutely true that the strategy is paying off. Taco Bell, for instance, sees an average of 30 percent more spend per order on mobile versus in-store sales.
Why so much more? It’s likely because the nature of online ordering encourages easy customization without hassle, since the customer won’t have to carefully explain their custom order to a member of staff over the phone. And the impulse to customize, already a prevailing trend for millennial shoppers, is supported through the structure of the app ordering system itself.
Restaurant apps have proven out to encourage long-term loyalty and repeat visits for high frequency, quick service restaurants that have embraced the technology. Combining an easy check-out interface that encourages re-orders with customized rewards programs, brands are giving consumers a lot of incentive to keep coming back again and again. Plus, the ability to make targeted offers based on previous spending patterns is a huge advantage for restaurants in both inspiring more loyalty and driving bigger spend online.
But the question you need to ask is, are any of these restaurant apps right for my restaurant?
Will a Restaurant App Work for Me?
If apps drive greater loyalty and spend — and 25 percent of all smartphone users have at least one restaurant mobile app on their device — why not jump into the app market with both feet? Big brands are seeing phenomenal results from app development and promotion, but will your restaurant see the same results?
The advantage expansive restaurant chains like Starbucks, Taco Bell, and Chick-fil-A have over single unit establishments or local franchises is a built-in, widespread audience. In terms of marketing, apps can only service and extend loyalty among your existing customer base, not create it out of whole cloth. That’s because the nature of app distribution and word of mouth works differently in an online setting for apps than for other forms of mobile marketing like responsive websites, social media, and email.
According to some research, the top FIVE apps available for sale or free download in the mobile market are responsible of up to 90 percent of all usage. That means in order to become the ultimate best app for restaurant owners, your restaurant’s app would have to become so popular that it is downloaded more often than the millions of other apps available — just to get noticed. And how do you get it to be downloaded that many times? By already being more popular than the rest.
Trying to compete for attention in this kind of cutthroat market without other forms of brand loyalty well-established beforehand is a losing battle. And a potentially expensive one. The development cost for apps is considerable, much more so than other forms of mobile marketing, if you don’t already have a team of skilled techs on staff with experience specifically in developing apps, which is a different skillset than developing websites.
But cost isn’t the only detriment to building restaurant apps for small to medium-sized businesses. The stats in favor of development are deceptively positive, with user behavior revealing some trouble a lot of restaurant owners may want to keep in mind.
If I build it, they’ll come. Right? Not quite. Development costs aside, studies show that the average cost of acquiring a user who will a) download and install your app, and then b) make a purchase, is nearly $65 per user. That’s $65 you’re spending upfront, when more than 60 percent of food orders online are less than $50 each.
The Real Reason Restaurant Apps May Not Work for You
30 apps per month. 10 apps per day.
Those are the magic numbers, according to App Annie, an app market data and insights company. Consumers on average actively use 30 apps per month and 10 apps per day, even if they are downloading upwards of three times that many. These numbers back up an earlier report from Nielsen that claimed there was a definitive upper limit in regard to how many apps consumers can manage on a monthly basis.
Digging a little deeper, Forrester Research finds that smartphone owners spend 85 percent of their time on native apps (the apps that come already installed on their phone at purchase). On average, only five non-native apps (ones a user installs themselves) get heavily used at any given time.
The most popular non-native apps are from Facebook, Google, Apple, Amazon, Yahoo, eBay, and Microsoft. Other email, navigation, and shopping apps tend to round out the most popular, with subscription entertainment services like Netflix and Hulu gaining in popularity.
Starting to see what’s missing?
Even looking at the bigger picture of apps that get infrequent use, the odds are not in your restaurant’s favor. App Annie has broken down the categories of app usage even more precisely, and the results are not encouraging. On average, less than two apps out of 30 used monthly are in the category of “Lifestyle,” which means your restaurant would be competing with:
- international brands that encourage near daily use like Starbucks and Taco Bell.
- delivery and review apps that offer consumers a one-stop solution for their restaurant needs.
There’s simply not enough utility for today’s consumer in an app that only does one very discreet thing, unless that activity is woven into the fabric of their daily life.
But there are alternatives that work for most restaurants at a scale that they can manage and that smartphone users will appreciate.
Alternatives to Restaurant Apps
Mobile websites, particularly those optimized for smartphones with responsive design, dominate traffic from those devices, with twice as many visits over time than to apps.
Shareability is also a factor to contend with, as restaurant apps tend to favor direct use, have to be discovered and downloaded, and then don’t offer as many opportunities for instant referral as social media, browser activity, or email does. You can text a website link to a friend a lot easier than data from inside an app.
And if the data above shows anything, it’s that if you don’t already have the widespread market share you’re looking to gain by launching a restaurant app, you’re not going to have the audience necessary to make that app a success.
App development is a key tactic for large businesses that are looking for incremental improvement in spend and loyalty. It is technology best utilized for reinforcement — not development — of increased sales and customer experience. In short, no app is probably the best app for restaurant owners starting out.
But that’s not to say what brands like Starbucks and Taco Bell are doing don’t offer significant lessons for the independent restaurateur. The idea of building your business through loyalty and ease of use is one that Rewards Network has been invested in for over thirty years.
Our loyalty dining program has helped over 94,000 restaurants offer rewards of choice to their customers and provided 4-6 percent in top line revenue to our restaurants month in and month out. We market your restaurant to customers that spend 13 percent more on average than other consumers, and you get the reports and data to see how it’s working every step of the way.
See what Rewards Network has to offer your restaurant that an app can’t, with a dining rewards program that increases loyalty and spend:
