Driving Sales with Data
A few years ago a multinational grocery store business headquartered in the UK unearthed an interesting trend. After analyzing tens of thousands of transactions and capturing customer data through its loyalty program, the store discovered a pattern of spending behavior at neighborhood stores among male customers. It saw that a portion (presumably fathers of young children) regularly came to shop in the early evening, on their commute home from work, to buy diapers. This trend was more pronounced on a Friday evening. As a direct result, the store began promoting six-packs of beer on the adjacent shelves, and found that the resulting sales of beer increased materially.
It was a small but transformational insight – one of thousands harnessed by this group to drive sales and profits.
It’s also the sort of transformational business intelligence that for too long has evaded the hospitality market. For, alongside a smattering of big national companies, and mega chains, the restaurant and bar market is largely populated by entrepreneurs, start-ups and smaller groups. That means that the budgets required for complex analytical software and smart customer loyalty programs have for most organisations, simply been out of reach.
The prohibitive cost of business intelligence meant that in hospitality – and the wider leisure market – analytics was largely the preserve of the big, Fortune 500-style companies with deep pockets that could fund the cost of constructing a bespoke software platform (a lengthy project that could be expected to cost hundreds of thousands of dollars). It meant that in the era of the iPad and iPhone, many hospitality companies were still relaying on mining manually-created spreadsheets to make business-critical decisions.
However, like many aspects of business, and of our lives, advances in technology and the proliferation of cloud-based software has changed, and is changing, all of this. It has allowed those regional burger joints, groups of gastropubs and fledgling hotel chains to drive insight-based decision making through their organizations.
In stark contrast to what went before, the cloud has given birth to plug-and-play software that can mine a wealth of information from existing business systems across myriad functions, such as finance, procurement, inventory, sales and transactions, marketing, human resources, property, mystery shopper data, and so on – and from companies of all sizes – big and small. This software is vendor agnostic, with the ability to plug into different platforms manufactured by different software organisations. It means that more and more of the data that flows through the various parts of a hospitality business can be pulled together.
To bring this to life, there are some rich themes seen being explored by hospitality companies, thanks to analytics – and cloud-based software products like Fourth Analytics, powered by GoodData. These examples include:
Shopping basket: In addition to best-selling menu items, companies are using analytics to understand sales at a deeper level – such as, what products sell well together: what sells well by day part, time of the week, season, region and by customer type. Also, which chef or kitchen produces the most meals and the least waste, and so on.
People: Companies can understand who their star performers really are. Not just who sells the most, but who attracts the fewest complaints; who sells the most coffees and desserts. Or, which area manager has the longest-serving staff. Which chef makes the best food, according to customer feedback. Or, which restaurant team is best at implementing and driving sales of new products and specials? The list of what is possible is endless.
Financial performance: Senior managers can review critical business data, such as producing a flash profit and loss account. Or, what was my labor spend yesterday? What were my sales today? What is my projected profit for the period? What are my sales per labor hour spent? Again, the options are many.
It may sound obvious but analytics in the restaurant business also reveals a strong correlation between current customer satisfaction and future same-store sales growth. That’s to say that a restaurant that gives good service and great food today, is more likely to be in growth in three or six months’ time.
A key feature of this analytics-powered step-change in business insight and knowledge is the way in which information is presented and shared. It’s visual, and it’s easy to interpret and digest. Also, a key feature of cloud-based analytics is that it’s easy to operate multiple levels of permissions, tailoring access and the type of information people receive by job title and function – people see what’s most relevant to them.
This genuinely is a brave new world. Hospitality companies have gone from reviewing mountains of paper and spreadsheets, which would take days to build and weeks to digest, to having immediate access to business-critical insights, at the touch of a smartphone.
It was a small but transformational insight – one of thousands harnessed by this group to drive sales and profits.
It’s also the sort of transformational business intelligence that for too long has evaded the hospitality market. For, alongside a smattering of big national companies, and mega chains, the restaurant and bar market is largely populated by entrepreneurs, start-ups and smaller groups. That means that the budgets required for complex analytical software and smart customer loyalty programs have for most organisations, simply been out of reach.
The prohibitive cost of business intelligence meant that in hospitality – and the wider leisure market – analytics was largely the preserve of the big, Fortune 500-style companies with deep pockets that could fund the cost of constructing a bespoke software platform (a lengthy project that could be expected to cost hundreds of thousands of dollars). It meant that in the era of the iPad and iPhone, many hospitality companies were still relaying on mining manually-created spreadsheets to make business-critical decisions.
However, like many aspects of business, and of our lives, advances in technology and the proliferation of cloud-based software has changed, and is changing, all of this. It has allowed those regional burger joints, groups of gastropubs and fledgling hotel chains to drive insight-based decision making through their organizations.
In stark contrast to what went before, the cloud has given birth to plug-and-play software that can mine a wealth of information from existing business systems across myriad functions, such as finance, procurement, inventory, sales and transactions, marketing, human resources, property, mystery shopper data, and so on – and from companies of all sizes – big and small. This software is vendor agnostic, with the ability to plug into different platforms manufactured by different software organisations. It means that more and more of the data that flows through the various parts of a hospitality business can be pulled together.
To bring this to life, there are some rich themes seen being explored by hospitality companies, thanks to analytics – and cloud-based software products like Fourth Analytics, powered by GoodData. These examples include:
Shopping basket: In addition to best-selling menu items, companies are using analytics to understand sales at a deeper level – such as, what products sell well together: what sells well by day part, time of the week, season, region and by customer type. Also, which chef or kitchen produces the most meals and the least waste, and so on.
People: Companies can understand who their star performers really are. Not just who sells the most, but who attracts the fewest complaints; who sells the most coffees and desserts. Or, which area manager has the longest-serving staff. Which chef makes the best food, according to customer feedback. Or, which restaurant team is best at implementing and driving sales of new products and specials? The list of what is possible is endless.
Financial performance: Senior managers can review critical business data, such as producing a flash profit and loss account. Or, what was my labor spend yesterday? What were my sales today? What is my projected profit for the period? What are my sales per labor hour spent? Again, the options are many.
It may sound obvious but analytics in the restaurant business also reveals a strong correlation between current customer satisfaction and future same-store sales growth. That’s to say that a restaurant that gives good service and great food today, is more likely to be in growth in three or six months’ time.
A key feature of this analytics-powered step-change in business insight and knowledge is the way in which information is presented and shared. It’s visual, and it’s easy to interpret and digest. Also, a key feature of cloud-based analytics is that it’s easy to operate multiple levels of permissions, tailoring access and the type of information people receive by job title and function – people see what’s most relevant to them.
This genuinely is a brave new world. Hospitality companies have gone from reviewing mountains of paper and spreadsheets, which would take days to build and weeks to digest, to having immediate access to business-critical insights, at the touch of a smartphone.