Restaurants turn to e-gift cards for smooth recovery
As restaurants recover from the devastating effects of 2020 and continually face new challenges related to viruses, labor, supply chain and inflation, e-gift cards are an essential tool for providing much-needed additional revenue and acquiring new customers.
The Restaurant Software-as-a-Service (SaaS) Company’s 2022 Restaurant Gift Card Sales Report Paytronix reveals restaurant gift card sales may not have recovered to pre-pandemic levels, remaining 13% below 2019 sales – but in 2021 they were up 22% from 2020 Additionally, gourmet gift card sales increased 57% during the year, and family dining gift card sales increased 106%.
Andrew Robinco-founder and CEO of Paytronix, spoke with PYMNTS’ Karen Webster in a recent PYMNTS TV interview about the value digital gift cards can create for restaurants.
“At restaurants, there’s usually 25-30% that people spend beyond the gift card [value]”, Robbins said. “If you think about it, [the gift card] was given as a treat, and so you’re going to treat yourself.
Additionally, the study found that across all foodservice categories, consumers spend more on digital gift cards than on physical cards, so these e-cards open up even greater sales opportunities.
One foot in the door
Gift cards can work as a referral, Robbins pointed out, with a friend or relative of someone who specifically selected that restaurant to their liking. Plus, because gift cards tend to promote positive dining experiences, these customers are more likely to return.
“Everybody loves a good referral, so it’s a great guest coming to visit,” Robbins said, “and then they eat free, so they’re going to be a little happier about the meal.”
Given the higher spend that gift cards tend to generate, consumers may be more likely to order another drink or dessert that they might not have otherwise purchased, contributing to their satisfaction. with respect to the overall experience.
Additionally, Robbins noted that data from consumer checks reveals that gift card users are more likely to order more entrees, suggesting they are bringing more people with them to restaurants — perhaps in part of a group celebration. Thus, gift cards help the restaurant reach not only the recipient of the card, but also other members of their party.
A new vision of loyalty
As restaurants attempt to address workforce challenges, many have taken inspiration from strategies that have proven successful with consumers to guide their efforts with their employees. For example, Robbins noted, some restaurants are adding employee loyalty programs.
“It does two things: a currency with an incentive to keep them, but also a method of communication,” he said, adding that through these programs restaurants can spread messages about the initiatives being company and new changes.
Additionally, these programs can make it easier to motivate referrals, rewarding employees for bringing their friends on board through loyalty program currency features.
To be sure, loyalty programs have won over consumers, according to data from the most recent edition of PYMNTS’ Digital Divide Report: Technology as an Enabler for Restaurant Purchases, created in collaboration with Paytronix. The study found that about four in 10 restaurant customers say rewards programs would encourage them to make more purchases.
Read more: QSRs seek tech-savvy dinner spend with new digital tools
Additionally, results from the January edition of the Digital Divide series, “The Digital Divide Report: Minding The Loyalty Gap,” which is based on a fall survey of more than 2,400 U.S. adults , noted that 61% of respondents had earned loyalty rewards for spending in the previous thirty days.
Read more: Restaurants compete for loyalty programs to stand out as consumers join multiple programs
Watch this place
Labor challenges are already driving a wave of innovation among restaurants and technology providers, with the emergence of automated solutions to reduce labor requirements. These advances take many forms: from robots at every link in the supply chain, from picking and packaging to food preparation and delivery, to digital technologies for consumers, such as QR code menus and digital ordering tools.
Robbins argues that where once these types of technologies would have detracted from the dining experience, consumers now expect them. He added, “People are looking for multiple ways to make life easier and more efficient for the restaurant chain.”
Overall, the challenges facing the industry are very real, but there is one upside for restaurants: the recovery in consumer demand.
“[Operators are] still challenged by the supply chain, inflation and a struggle for employees… If that’s not one thing, it’s another,” Robbins said. “But there is optimism that consumers will return.”