In a dynamic industry like the quick service restaurant sector, where competition remains intense and consumer preferences continue to evolve, strategic location selection is paramount. Traditionally, factors such as foot traffic, proximity to competitors, and demographic data have been considered important decision-making factors. But things are changing, and a powerful new tool is emerging: consumer spending data.
What is consumer spending data?
In its simplest form, consumer spending data represents anonymized transaction details collected from sources such as credit and debit cards. This data is further enhanced by linking it to retailers and geographic locations, giving you a deeper understanding of how consumers in a particular region spend their money. This data goes beyond just understanding what is being purchased. Gain detailed insight into purchasing habits, category trends, and overall spending patterns across geographic locations. Imagine having a map that not only shows population density, but also reveals the specific food categories that people in that area are most likely to spend money on. This is the power of consumer spending data.
Importance in a quick service environment
In an era where convenience is paramount and demand for food delivery services shows no signs of slowing down, leveraging consumer spending data can have a major impact on quick-service location strategies. This data helps understand the “why” as well as the “where” behind consumer choices, enabling a strategic approach to location selection that aligns with evolving dietary preferences. This is especially valuable when identifying locations where demand for food delivery is high but options are not yet saturated, allowing quick service restaurants to establish a presence in underserved markets. Become.
Additionally, as the industry moves to a smaller footprint model for dine-in, this data can help pinpoint areas where a delivery-focused approach will be successful. This allows for a more nuanced understanding of the market, considering the comprehensive picture of food delivery demand, including insights from competing restaurants and adjacent sectors such as grocery delivery.
Example of strategic expansion
A compelling example of the practical application of consumer spending data comes from the strategic expansion of a major national chicken restaurant chain. The chain recognized the potential to expand its footprint by focusing on stores that primarily cater to food delivery demands. But to navigate this expansion wisely, the chain turned to consumer spending data for deeper insights.
This analysis went beyond restaurant-specific delivery data to encompass food delivery demand across a broader region. This also includes spending patterns related to other restaurants and grocery delivery services, providing a complete picture of the delivery ecosystem in your area. The insights gained from this data were eye-opening. They identified specific regions where food delivery services are in high demand but are underserved by existing quick-service stores.
Armed with this knowledge, the chicken restaurant strategically selected new locations, focusing on areas with high demand but underserved delivery services. This approach has allowed the chicken chain to expand its market reach in areas previously unavailable to it. This has maximized the growth potential of its immediate customer base and placed the chain in a favorable position in the highly competitive delivery market.
Impact and beyond
The chicken restaurant chain’s strategic use of consumer spending data highlights the company’s value in enhancing the decision-making process for quick-service store selection. By understanding the broader context of consumer spending behavior, the chain was able to implement new expansion strategies aligned with market demand and consumer preferences for food delivery.
This is just one example of the transformative potential of leveraging consumer spending data in the quick service industry. We highlight how such data provides insights beyond traditional metrics and enables forward-thinking approaches to site selection in the evolving context of consumer dietary preferences. .
Embrace the future with data-driven decision making
For quick-service owners and operators, integrating consumer spending data into location decisions can be challenging. With the right tools and analytical approaches, this data can provide new opportunities for growth and competitive advantage. This will drive a shift towards more dynamic and responsive decision-making, and understanding the nuances of consumer behavior will be the basis for strategic expansion.
As the quick-service industry continues to evolve in a post-pandemic world, the role of consumer spending data in informing strategic location decisions will continue to grow. It provides a path to understanding and meeting modern consumer demands, ensuring quick service restaurants can survive and thrive in the new environment. By leveraging the insights gained from consumer spending data, quick service owners and operators can chart a path to success characterized by informed, strategic, and ultimately rewarding location decisions. Masu.
Jonathan Chin is co-founder and head of data and growth at an alternative data company. Facteus.
