Three Loyalty Moves to Meet Market Challenges
NEW HARTFORD, N.Y. — The possibility of transforming casual diners into loyal advocates who consistently choose one restaurant over the competition is more than just a possibility when a brand uses the right strategies, according to findings of the first annual "PAR Punchh Loyalty Trends Report."
The essential report provides a sneak peek into how innovative loyalty programs are reshaping the dining landscape and driving unprecedented customer engagement, according to the company.
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"The Loyalty Trends Report" is designed to offer vital insights as the restaurant industry contends with economic pressures and changing consumer behaviors. Diners who face rising prices and higher expectations are seeking value and rewards through loyalty programs.
"PAR Punchh powers 78,000 restaurants monthly, which makes us the leader in restaurant loyalty marketing," said Savneet Singh, CEO of PAR Technology. "With that scale and the vast amount of data on consumer behavior, it's important for us to release our insights and findings on loyalty behavior so our restaurant partners can better understand and react to changes in the market landscape."
The report is based on Punchh's extensive platform powering more thn 30% of the top 100 restaurant brands and highlights the strategies that are turning challenges into golden opportunities, the company said. Key findings include:
Breakfast & Menu Innovations — There has been a notable increase in morning sales as more people return to in-office work and adapt to new routines. Loyalty programs are a pivotal part of this trend due to their targeted messaging and incentives. Casual dining brands have also been successful in sparking interest in breakfast through menu innovations, healthier items, personalized offers, and optimized ordering channels, aligning with consumer shifts observed with remote work schedules. This also aligns with findings that emphasize the impact of changing work patterns on dining habits and the increased focus on morning sales.
[Read more: Top Operators Achieve Significant Loyalty Penetration]
Omnichannel & In-Store Ordering Impact — Both omnichannel and in-store ordering have demonstrated their value. Guests who use multiple ordering channels visit more frequently and purchase at higher volumes, emphasizing the importance of technology in enhancing customer experience. Additionally, the resurgence of in-store ordering — which accounted for just under 40% of transactions in 2023 — highlights the need for effective on-premise point-of-sale systems to cater to a significant customer group.
Loyalty Sales Growth & Gen Z Engagement — To offset higher prices, customers are increasingly seeking incentives from their favorite restaurants. This drove a 12% increase in loyalty sales from 2022 to 2023, which significantly outpaces the 5% overall increasing in consumer spending at restaurants. Successful loyalty programs have also improved their digital strategies to achieve strong resonance with Gen Z, which accounted for 25% of total loyalty sign-ups. The digital engagement preferences of this cohort highlights the importance of digital and mobile solutions in capturing younger consumers' attention.
Understanding and leveraging these trends can set one's brand apart, according to PAR Punchh. Strategic loyalty programs are not just about retaining customers; they are also about creating an emotional connection that fosters long-term loyalty and profitability.
The full report is available here.
PAR Punchh, part of PAR Technology Corp., provides advanced loyalty and customer engagement solutions for top restaurant brands.