LONDON, Mar 29, 2022 - (ACN Newswire) - The US quick-service restaurant (QSR) category, which adapted at speed during COVID-19, is at the intersection of every current marketing trend and concern, and is well-placed to lead the way on how other category brands can tackle new marketing trends effectively.
Cathy Taylor, US Commissioning Editor, WARC, says: "The scale of QSR brands in the US should make marketers, no matter the category, pay notice. The top five brands in terms of advertising expenditure -- McDonald's, Domino's, Taco Bell, Burger King and Wendy's -- spent $1.8 billion in 2020, and Americans spent almost $300 billion in the sector in 2021, an amount just about equal to the Gross Domestic Product (GDP) of Colombia, according to Statista.
"For QSR marketers, there's a constant need to adjust to an ever-changing consumer. In our latest Spotlight US we take a look at how fast-food brands are adapting to new trends and navigating a landscape of higher inflation, disintermediation, digital and dazzle."
The impact of inflation
Offering food at low cost, QSR brands are well-positioned in a high-inflation economy but have to drive value harder for their customers. According to QSR Magazine, menu pricing grew 1.3% between September 2021 and January 2022.
Greg Paull, Principal and Co-founder, R3, a global independent marketing consultancy, says: "Priorities have shifted from sustaining brand awareness in a WFH economy to convincing people to pay more, more regularly, and brands have already begun offsetting commodity pressures. The price of a Big Mac increased at the same rate as inflation (7%) between December 2020 and December 2021, Domino's has downsized its wing deal from 10 to 8 items, and Denny's has stopped advertising its value menu that starts at $2."
Alice Crowder, Chief Marketing Officer, Krystal, a southeast US QSR chain, explains their approach: "I have a value version that goes on to my value menu, but I also have a premium version for people who can afford to pay more. All of my promotions are structured that way."
Responding to disintermediation
The role of third-party delivery services, such as DoorDash and Uber Eats, played a huge role during the pandemic. While some consumers are returning to pre-pandemic habits of in-restaurant dining, some are maintaining their delivery habit. This is impacting the industry by:
Loss of first-party data: Third-party delivery companies don't share the data they collect with QSR brands, meaning restaurant operators lose a crucial connection point to customers' wants and needs.
Increased need to build emotional connections with consumers to override their propensity to click on the nearest delivery app.
Building menus and packaging around the reality of delivery. Historically, QSR food has been meant for immediate consumption, but delivery means selling food that holds and transports well.
Catering to customer experience
The popularity of QSR is due to convenience, and in a competitive environment, this puts a premium on customer experience.
Jennifer Healan, VP/US marketing, brand content and engagement, McDonald's, explains how it simplified its menu during the pandemic in part to streamline the experience around the "three Ds": Digital, Drive Thru and Delivery: "We're all about meeting our customers and our fans where they are and what is going to be convenient for them as they come to us."
Nate Swift, Chief Strategy Officer, O'Keefe, Reinhard & Paul, notes how Chick-fil-A's great customer experience has particular relevance with Gen Z: "... making Gen Z consumers feel seen, respected and wanted is one of the most important things a QSR brand can do to connect to this generation who feel underestimated and undervalued."
In QSR marketing, celebrity sells
QSR brands aren't just hiring celebrities for endorsements, but are partnering with them in much deeper ways that not only draw attention to marketing efforts but move the sales needle.
Krystal partnered with 2 Chainz, to tap into the rapper's fondness for the brand, and his ability to drive traffic.
On the partnership, Alice Crowder, Chief Marketing Officer, Krystal, says: "He really introduced his fan base to Krystal through his eyes. Now we're starting to talk about, 'How do we keep the connection at this restaurant going? How do we amplify it for the rest of the system?"
Other QSR brands successfully using celebrities are McDonald's, which has offered meals based on famous celebrity orders from Travis Scott, Saweetie and others, and Popeyes, which has offered "Hottie Sauce" with the rapper Megan Thee Stallion.
Read here (www.warc.com/reports/spotlightus) a full round-up of this Spotlight US by WARC's Cathy Taylor.
WARC's Spotlight US is a series focusing on a timely industry topic brands face in the market. It comprises a capsule collection of commentary, tackling the topic from a range of angles. Contributors to the series are industry experts offering on-ground insights into what's working or developing.
WARC's Spotlight series consists of a mixture of free content and content for WARC subscribers, and covers Australia (www.warc.com/reports/SpotlightAustralia), Canada (www.warc.com/reports/SpotlightCanada), China (www.warc.com/reports/SpotlightChina), India (www.warc.com/reports/SpotlightIndia), Southeast Asia (www.warc.com/reports/SpotlightSoutheastAsia) and the US (www.warc.com/reports/SpotlightUS).
About WARC -- The global authority on marketing effectiveness
WARC is an Ascential company. Ascential delivers specialist information, analytics and ecommerce optimisation platforms to the world?s leading consumer brands and their ecosystems. Our world-class businesses improve performance and solve problems for our customers by delivering immediately actionable information combined with visionary longer-term thinking across Digital Commerce, Product Design and Marketing. We also serve customers across Retail & Financial Services. With more than 2,000 employees across five continents, we combine local expertise with a global footprint for clients in over 120 countries. Ascential is listed on the London Stock Exchange.
For over 30 years WARC has been powering the marketing segment by providing rigorous and unbiased evidence, expertise and guidance to make marketers more effective. WARC services include 96,000+ case studies, best practice guides, research papers, special reports, advertising trend data, news & opinion articles, as well as webinars, awards, events and advisory services. WARC operates out of London, New York, Singapore and Shanghai, servicing a community of over 75,000 marketers in more than 1,200 companies in 100+ markets and collaborates with 50+ industry partners.
Source: Warc
Copyright 2022 ACN Newswire . All rights reserved.
Cathy Taylor, US Commissioning Editor, WARC, says: "The scale of QSR brands in the US should make marketers, no matter the category, pay notice. The top five brands in terms of advertising expenditure -- McDonald's, Domino's, Taco Bell, Burger King and Wendy's -- spent $1.8 billion in 2020, and Americans spent almost $300 billion in the sector in 2021, an amount just about equal to the Gross Domestic Product (GDP) of Colombia, according to Statista.
"For QSR marketers, there's a constant need to adjust to an ever-changing consumer. In our latest Spotlight US we take a look at how fast-food brands are adapting to new trends and navigating a landscape of higher inflation, disintermediation, digital and dazzle."
The impact of inflation
Offering food at low cost, QSR brands are well-positioned in a high-inflation economy but have to drive value harder for their customers. According to QSR Magazine, menu pricing grew 1.3% between September 2021 and January 2022.
Greg Paull, Principal and Co-founder, R3, a global independent marketing consultancy, says: "Priorities have shifted from sustaining brand awareness in a WFH economy to convincing people to pay more, more regularly, and brands have already begun offsetting commodity pressures. The price of a Big Mac increased at the same rate as inflation (7%) between December 2020 and December 2021, Domino's has downsized its wing deal from 10 to 8 items, and Denny's has stopped advertising its value menu that starts at $2."
Alice Crowder, Chief Marketing Officer, Krystal, a southeast US QSR chain, explains their approach: "I have a value version that goes on to my value menu, but I also have a premium version for people who can afford to pay more. All of my promotions are structured that way."
Responding to disintermediation
The role of third-party delivery services, such as DoorDash and Uber Eats, played a huge role during the pandemic. While some consumers are returning to pre-pandemic habits of in-restaurant dining, some are maintaining their delivery habit. This is impacting the industry by:
Loss of first-party data: Third-party delivery companies don't share the data they collect with QSR brands, meaning restaurant operators lose a crucial connection point to customers' wants and needs.
Increased need to build emotional connections with consumers to override their propensity to click on the nearest delivery app.
Building menus and packaging around the reality of delivery. Historically, QSR food has been meant for immediate consumption, but delivery means selling food that holds and transports well.
Catering to customer experience
The popularity of QSR is due to convenience, and in a competitive environment, this puts a premium on customer experience.
Jennifer Healan, VP/US marketing, brand content and engagement, McDonald's, explains how it simplified its menu during the pandemic in part to streamline the experience around the "three Ds": Digital, Drive Thru and Delivery: "We're all about meeting our customers and our fans where they are and what is going to be convenient for them as they come to us."
Nate Swift, Chief Strategy Officer, O'Keefe, Reinhard & Paul, notes how Chick-fil-A's great customer experience has particular relevance with Gen Z: "... making Gen Z consumers feel seen, respected and wanted is one of the most important things a QSR brand can do to connect to this generation who feel underestimated and undervalued."
In QSR marketing, celebrity sells
QSR brands aren't just hiring celebrities for endorsements, but are partnering with them in much deeper ways that not only draw attention to marketing efforts but move the sales needle.
Krystal partnered with 2 Chainz, to tap into the rapper's fondness for the brand, and his ability to drive traffic.
On the partnership, Alice Crowder, Chief Marketing Officer, Krystal, says: "He really introduced his fan base to Krystal through his eyes. Now we're starting to talk about, 'How do we keep the connection at this restaurant going? How do we amplify it for the rest of the system?"
Other QSR brands successfully using celebrities are McDonald's, which has offered meals based on famous celebrity orders from Travis Scott, Saweetie and others, and Popeyes, which has offered "Hottie Sauce" with the rapper Megan Thee Stallion.
Read here (www.warc.com/reports/spotlightus) a full round-up of this Spotlight US by WARC's Cathy Taylor.
WARC's Spotlight US is a series focusing on a timely industry topic brands face in the market. It comprises a capsule collection of commentary, tackling the topic from a range of angles. Contributors to the series are industry experts offering on-ground insights into what's working or developing.
WARC's Spotlight series consists of a mixture of free content and content for WARC subscribers, and covers Australia (www.warc.com/reports/SpotlightAustralia), Canada (www.warc.com/reports/SpotlightCanada), China (www.warc.com/reports/SpotlightChina), India (www.warc.com/reports/SpotlightIndia), Southeast Asia (www.warc.com/reports/SpotlightSoutheastAsia) and the US (www.warc.com/reports/SpotlightUS).
About WARC -- The global authority on marketing effectiveness
WARC is an Ascential company. Ascential delivers specialist information, analytics and ecommerce optimisation platforms to the world?s leading consumer brands and their ecosystems. Our world-class businesses improve performance and solve problems for our customers by delivering immediately actionable information combined with visionary longer-term thinking across Digital Commerce, Product Design and Marketing. We also serve customers across Retail & Financial Services. With more than 2,000 employees across five continents, we combine local expertise with a global footprint for clients in over 120 countries. Ascential is listed on the London Stock Exchange.
For over 30 years WARC has been powering the marketing segment by providing rigorous and unbiased evidence, expertise and guidance to make marketers more effective. WARC services include 96,000+ case studies, best practice guides, research papers, special reports, advertising trend data, news & opinion articles, as well as webinars, awards, events and advisory services. WARC operates out of London, New York, Singapore and Shanghai, servicing a community of over 75,000 marketers in more than 1,200 companies in 100+ markets and collaborates with 50+ industry partners.
Source: Warc
Copyright 2022 ACN Newswire . All rights reserved.
