Americans plan to dine out more, spend less
On the heels of a year of rock-bottom meal prices epitomized by the tiny tab for a Subway foot-long sandwich, 2011 likely will be marked by demands from U.S. diners for even lower check prices, further squeezing restaurateurs and food-service companies. Consumers say they expect to spend 5 percent less per meal at restaurants in 2011, resulting in an average total tab of $12.90 per meal versus the $13.60 spent per meal in the previous year, according to a study from Southfield, Mich., advisory firm AlixPartners.
In addition, 11 percent say they expect to spend just $5 or less per meal in 2011 (up from 6 percent last year), while 60 percent plan to utilize coupons and other promotions to lower check prices.
On the bright side, diners are eating out more: 57 percent of consumers surveyed said they dined out at least once a week in the past 12 months, an eight-point increase over the response to the same question in AlixPartners’ March 2010 survey. In the coming 12 months, 11 percent of consumers plan to increase their dining-out frequency, albeit spending less per meal.
Promotions remain the most effective way to draw in new and existing customers. Despite the strong and growing importance of food quality among diners, the survey found that 43 percent are willing to trade down to less-expensive restaurants in order to save money.
Of consumers planning on dining out less in the next 12 months, most (54 percent) cite the need to save money as the primary reason for plans to cut back; however, the desire to eat healthier is a close second at 50 percent (also an increase of eight percentage points over the survey of March 2010).
Marketing channels and tactics are also a concern for restaurant companies moving forward. Despite movement over the past couple of years toward online marketing, only 20 percent of diners surveyed indicated that digital media influenced their dining-out decisions. For more information visit www.alixpartners.com.
Executives claim to value customer feedback; vast majority aren’t using it
A growing number of consumers are turning to social media channels to share unsatisfactory service experiences but for the most part companies aren’t listening. In fact, 94 percent of companies do not yet use social media channels to gather customer feedback, according to a survey conducted among executives by San Francisco research company MarketTools Inc.
Instead, the most common ways companies gather customer feedback are e-mail/online surveys (51 percent), formal phone surveys (28 percent) and informal phone calls (28 percent).
MarketTools’ study also revealed a disparity in the way companies think and act in regard to customer satisfaction. Although 92 percent of respondents believe that satisfied customers are very important or extremely important to their company’s bottom line, fewer than half (42 percent) solicit customer feedback on a continuous basis and more than one-fifth (22 percent) solicit feedback only once a year or not at all. In fact, 14 percent of executives surveyed said their companies don’t solicit customer feedback.
Thirty-nine percent of executives surveyed said that their companies increased their focus on customer satisfaction in 2010 versus 2009, with 21 percent stating that they invested more in customer satisfaction-related products and services in 2010 versus 2009. Forty-six percent rate their company’s performance on customer satisfaction in the top 10 percent when compared to their peer companies, and 93 percent rate themselves in the top 50 percent of peer companies. Still, more than half of all respondents (56 percent) said their companies do not have, or are not sure if their companies have, a formal voice-of-the-customer program. Nearly one-quarter (24 percent) said that they seldom or never use customer feedback to change a business process. For more information visit www.markettools.com.
Americans, Brits and Canadians warming up to the group-buying trend
The trend of group-buying is on the rise, as evidenced by the many Web sites that have followed Groupon’s model. More than two-thirds of respondents in Canada (74 percent), the U.K. (64 percent) and the U.S. (61 percent) who have made a purchase from a group-buying Web site say that the concept will affect the way consumers shop in the future, according to Vancouver, B.C., research company Vision Critical. Group-buying is beginning to have an effect on the mind-set of consumers across the three countries, with people in the U.S., U.K. and Canada becoming more price-sensitive after taking advantage of a group-buying offer, but there are great demographic and geographic differences in how consumers partake in the group-buying trend.
Groupon has effectively achieved top-of-mind status in this new category of group-buying facilitators. About half of Americans (45 percent) have heard of Groupon, along with 35 percent of Britons and 34 percent of Canadians. Groupon has the highest level of awareness, with competitors trailing far behind (WagJag in Canada at 23 percent; EverSave in the U.S. at 20 percent; and Groupola in the U.K. at 9 percent). About half of respondents in the three countries had not heard of any of the group-buying Web sites mentioned by name in the survey. In the U.K., of those who hadn’t heard of the sites, two-thirds were over the age of 55 (62 percent) while roughly half of those under 55 had not heard of them either. American and Canadian men are more likely than women not to have heard of group-buying.
Americans are most likely to purchase restaurant or food-related group-buying deals (46 percent); product deals such as clothing, tools, furniture or electronics (43 percent); or entertainment deals like movie and concert tickets (39 percent). British men are more likely to buy restaurant and food deals from group-buying Web sites (44 percent) while women prefer spa, salon and cosmetic deals (37 percent). Canadian women also buy spa and salon deals (42 percent) but both genders participate in restaurant deals (70 percent of men and 59 percent of women). Deals for children are the least-purchased in the U.K. and Canada (8 percent and 4 percent) while spa and salon deals are bought least in the U.S. (13 percent).
Americans who have not bought a group deal say this is because they had not heard of the concept (12 percent) or aren’t interested in group-buying (27 percent). One-in-five Americans (18 percent) who haven’t bought from any group-buying sites say this is because they do not want to share their credit card information. In the U.K., some of those who have not participated also cited not wanting to share their credit card information (14 percent) but for the most part hadn’t seen any deals that were of interest to them (59 percent). When asked why they have not bought any group deals, Canadians mentioned not having heard of group-buying until now (37 percent) or not having seen any deals they wanted to participate in (27 percent).
In the U.S., awareness about the concept of group-buying is lowest in the Midwest with 46 percent of respondents saying they have not heard of any of the listed group-buying Web sites. Two thirds of people in the Northeast have heard of one or more of the sites (67 percent). Awareness is consistent throughout the U.K., although Scotland has the highest level of awareness (53 percent of Scots have heard of one or more of the sites listed). In Canada, awareness is lowest in the Atlantic Provinces and Quebec (74 percent report having not heard of any of the Web sites listed) and highest in British Columbia, where 65 percent of respondents have heard of one or more group-buying Web sites.
In Canada, women are driving the group-buying trend, with 19 percent having bought from Groupon (compared to 11 percent for Canadian men). Both genders are equally likely to purchase from group-buying sites in the U.S. (men 20 percent, women 19 percent) and the U.K. (men 20 percent, women 17 percent).
Men in the U.K. are most likely to allow a group-buying deal they’ve purchased to expire before they get a chance to use it (44 percent). Less than a quarter of British women (24 percent) have allowed a deal they bought to expire. In Canada, women are more likely than men to tell their friends about group-buying deals they’ve seen using Facebook, Twitter or e-mail (46 percent of women and 27 percent of men). As a result, one-third of Canadian women who have purchased a group deal have received a referral incentive (29 percent). Nearly half of Americans who have bought a group deal have purchased it as a gift for someone else (45 percent).
In Britain, 26 percent of men have purchased a deal, used it at a vendor and then returned to that same vendor at full price. Only 7 percent of British women return to pay full price. American men are twice as likely as women to return (36 percent to 18 percent). In Canada, women are more loyal (28 percent) than men (19 percent) when it comes to returning to a vendor at full price.
Among the three countries studied, Americans are least likely to pay full price (35 percent), followed by Britons at 31 percent and Canadians at 29 percent. Almost two-thirds of American men (64 percent) are willing to pay more for something they really want but prefer to get a deal. Two-thirds of women in the U.K. (68 percent) like to get a deal but will pay full price for something they really want. In Canada, 70 percent of men and 65 percent of women like to get a deal but will pay full price if required.
Al least three in five Britons, Americans and Canadians who have bought a group-buying deal say it has made them more price-sensitive and as a result they now think twice before paying full price.
Two in five British men and one-third of Canadian men who have purchased from a group-buying Web site feel that group-buying ultimately harms the small businesses that participate in it - only 19 percent of British women and 13 percent of Canadian women share this view. Twenty-nine percent of Americans feel group-buying is detrimental to small business. For more information visit www.visioncritical.com.
Consumers weigh the pros and cons of online vs. in-store shopping
While online shopping is increasing and in-store shopping is decreasing, the pros and cons of each serve as a testament to consumers needing both. Nearly 45 percent of online shoppers say they are making more online purchases than they did a year ago and 37.8 percent are shopping in stores less, but consumers are drawn to aspects of each, according to BIGresearch, Columbus, Ohio.
For great customer service and making returns, brick-and-mortar retailers beat the online competition, but when going head-to-head, online retailers win on shoppers’ perception of product assortment, price and promotion.
According to adult online shoppers, 46.3 percent find the best assortment online, 16 percent in stores and 37.6 percent notice no difference in assortment. When asked where they can find the best prices, over 50 percent say online, 14.4 percent say in stores and 35.4 percent believe pricing was the same in both places. Thirty-five percent believe the best sales and promotions are found online while 28.6 percent believe stores are superior. Over 36 percent think the sales and promotions in both places are the same. Regarding customer services, however, online retailers lag 20 percent behind brick-and-mortar stores (19.8 percent versus 49.3 percent). Just over 30 percent believe customer service is no different online or in stores.
Interestingly, 70 percent of online shoppers prefer to shop at an online retailer that also has a traditional storefront. Further, 62.3 percent would rather make a return in-person in a store while only 27.4 percent say they would rather ship it back. Just under half said that they enjoy the shopping experience at a brick-and-mortar retail store and an online retailer equally; 32.9 percent said they like the online experience most; and 13.7 percent said in store.
However, while overall customer service ratings for online retailers lag brick-and-mortar, those online retailers who succeed in customer service are doing something very right, as seven of the top 10 customer service companies are either fully online or have a strong online/catalog presence. Zappos.com took top honors in a study conducted by BIGresearch on behalf of the National Retail Federation Foundation, Washington, D.C., and American Express, New York.
Newegg (No. 10) jumped five spots to make the top 10 this year. Continuing to impress shoppers with their stellar service, Amazon.com (No. 2), LL Bean (No. 3), Overstock.com (No. 4), Lands’ End (No. 5), JCPenney (No. 6), Kohl’s (No. 7), QVC (No. 8) and Nordstrom (No. 9) round out the remainder of the list. For more information visit www.bigresearch.com.