4 tips to navigate supply chain challenges

4 tips to navigate supply chain challenges

Matt Drewes is SVP, Group Head, Restaurant at Cardlytics, reveals four ways restaurant operators can stay ahead of supply chain issues.

Restaurants areshort on labor, proteins, produce, butter and oil, seafood — you name it, everything is in short supply.And due to asupply chain problemthat may last until 2023, these impactful business issues must be dealt with, and a long-term plan is in order.

The No. 1 thing restaurants should do is always keep customer service and brand delivery in mind. Here are four tips to help them do just that.

1. Use data to keep menus, marketing and customer service current
Customers can be passionate about their favorite meals or appetizers, so it’s important to brand loyalty to manage expectations as best as possible. Whether it’s the menu or an advertisement, restaurants should only feature products that can be fulfilled.

To do this, restaurants need to create a system where managers and team members remove unavailable items from customers’ view. Technology is best suited to enable this capability and will ensure the delivery of operations excellence. Technology will enable fast casual brands to connect inventory data, purchase data, location data — whichever helpful data they can get their hands on — to predict and anticipate which menu items will be in stock.

Then, managers should ensure that the menu (online and offline), marketing, and customer service all reflect the current data. This intelligence is necessary to help restaurants be transparent about what’s available and when items are expected to be back on the menu.

2. Encourage customers to order takeout and delivery
Currently, the labor shortage is the most obvious reason to encourage customers to use takeout and delivery instead of dining in. Late in 2021, shift volume in retail, hospitality and foodservicedeclined by 2.3%. So, with counter and server staff down, it’s better to take pressure off the front of the house and let the kitchen drive sales via online orders.

Assurance of brand promise delivery is another reason why takeout and delivery channels should be leveraged by operations and marketing teams. For paid and earned marketing efforts, marketing copy and imagery can influence customers toward takeout or delivery via mobile apps such as Toast, DoorDash and Grubhub, or to a brand’s owned ordering channels. These tech platforms can help manage menu expectations, showing in real-time when items are out of stock and giving customers more control over their experience compared to walking into a restaurant with uninformed meal expectations.

Such control over the customer experience (CX) is crucial: Per Deloitte,the No. 1 thingrestaurant customers want is to feel empowered about their decisions. And this kind of CX is better for brand loyalty because it decreases the number of times customers will be disappointed due to their favorite dish being unavailable.

3. Align advertising with inventory
Right now, fast-casual marketers should only buy and create ads for specific products if they know that they’ll have that product in stock in the short-term. That’s harder to do with certain menu items such as salads, due to the fact that produce comes from hundreds or thousands of miles away and can be delayed or canceled for a variety of reasons. If marketers are uncertain about the availability of menu items, they should focus on the brand rather than product.

Once again, data should be harnessed and used to inform marketing strategies. During this crisis, fast-casual marketers need to be plugged in with their supply chain colleagues to get the most accurate forecasts about which products will be available from market to market. With geography in mind, restaurant advertisers should combine location data and purchase data with supply chain intelligence to run the smartest digital ad campaigns possible.

4. Give them something for free
When customers request a menu item that’s out of stock, a useful practice is to suggest a similar alternative, and to even offer them a complimentary taste or another complementary offering such as bread, chips, salsa, etc. Other sandwich, fast casual, or QSR chains could offer a complimentary soft drink or coffee as a way to make up for any menu shortages. Free appetizers and drinks can effectively be the offline version of 5% cash-back offers, which many brands are using via digital channels to delight customers.

These small gestures cost little but can make a big impact on customer appreciation and help to maintain customer loyalty. All of that is huge when considering Itcosts 5X more to acquirea customer compared to retaining one.

Looking ahead, expect more innovation
The end of the supply chain crisis, unfortunately, is still far off on the horizon. Fast-casual players need to not only embrace data, take out, smarter advertising, complementary offerings for their in-store customers, but they should also continue to innovate.

In 2022, I expect fast-casual brands to explore new ways of making digital marketing, ordering experience, and the in-store experience smarter based on CRM, purchase behavior, and POS/supply chain data. For example, let’s say a brand knows which customers recently and regularly order a featured menu item. A brand could keep those customers informed about the in-stock status of that menu item via opt-in emails or texts. Or, if that brand launched line extensions or variations of that menu item, the brand could alert those customers of that food news.

It’s this style of innovation we hope to see, continuing to build brand loyalty with customers. Expect more of it on the supply chain front as fast-casual brands try to one-up each other for the best CX.

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