Location-Based Marketing To Diners To 'Explode'


Restaurants' use of location-based marketing to promote to and drive consumers to a particular restaurant while they are mobile will "explode" in 2011, predicts research provider Packaged Facts. 

As consumers' uptake of location-based services continues to mushroom, with check-in services such as Foursquare, Gowalla, Facebook Places, Twitter geolocation and competitors "not only becoming ubiquitous, but also more sophisticated," context-aware restaurant advertising will take off "sharply" this year, the report notes.

Indeed, to date, Starbucks routinely shows by far the largest volumes of Foursquare check-ins among major retailers, with McDonald's generally in second place and Chipotle and Burger King within the top 10, show the weekly Foursquare check-in stats published by Advertising Age.



Not only are smartphone as well as overall cell phone penetration levels skyrocketing, one in five (21%) consumers who consider going out to restaurants "part of their lifestyles" already uses cell phones or other portable devices to place orders, and nearly four in 10 adult consumers use social media platforms to learn about restaurants, according to a PF consumer survey conducted last October. (This is complemented by data from Nielsen showing that 25% of smartphone users and 14% of feature phone owners report using a dining/restaurant app during the past 30 days.)

And in case there was any doubt as to why restaurant brands are so eager to harness social media, PF points out that the scale of Facebook interaction -- including via its own Places location-based app -- not only enables restaurant brands to imprint themselves on consumers and make relevant, well-timed offers, it is a critical means of building a pool of consumers for purposes of ramping up location-based advertising and promotions.

According to the report, Starbucks has more than 1,700 Facebook friends per restaurant unit, and Facebook users are over 70% more likely than average to visit Starbucks. Chains with more than 1,500 friends per unit include Buffalo Wild Wings, The Cheesecake Factory and Chick-fil-A.

Chipotle Mexican Grill has nearly 1,200 Facebook friends per unit. Engaged Facebook users are nearly 70% more likely than average to patronize this chain, and "hyper-engaged" users are more than 85% more likely.

Meanwhile, Twitter and its geolocation service are offering restaurants a significant opportunity to reach a younger, more urban, multicultural audience, because of its particular popularity among Hispanic, African-American and Asian populations, PF's analysts point out. Twitter has also proven a critical tool for attracting patrons for urban food trucks and mobile foodservice units -- which are increasingly common among big brands, as well as independents.

Mobile devices and technology are also driving rapid restaurant adoption of in-restaurant, point-of-sale promotions and auto payment systems. PF predicts that a growing number of large QSRs will be testing phone-based payment systems by year's end, and will also increasingly tie mobile payments to loyalty programs (which in turn enhance ability to make future, transaction-informed mobile offers).

"The restaurant industry is in the midst of being shaped by the convergence of the mobile, always connected, consumer; location-based and context-aware technological innovation; and mobile payments -- all of which are already demonstrating the potential to redefine how to cultivate restaurant guest loyalty, incentivize dining occasions and better tailor marketing messages," sums up Packaged Facts publisher Don Montuori.


1 comment about "Location-Based Marketing To Diners To 'Explode' ".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, February 15, 2011 at 7:22 p.m.

    Starbucks to me is a Facebook failure. Don't care how many fans they have. I estimate they probably have about 200million or more regular customers world wide and they get a whopping 200-400 people per day posting on their page. Which is technically 0%. But they also don't do much on the page. As for Check Ins of course they have the most. Because they have so many stores! lol

    My question is will location based technology drive an increase in sales or a lower profit margin. if don't wrong it could sink profits.

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