State of Consumer Foodservice Loyalty Programmes and Opportunities for Expansion

April 2024

Due to intense competition and fragmentation in the foodservice industry, many restaurant operators are focusing on customer retention strategies via loyalty programmes. The surge in delivery apps has facilitated this shift, allowing seamless integration of these programmes. These schemes offer opportunities to understand audiences better, foster communities and provide value beyond transactions, thus enhancing brand identity and loyalty through features that provide long-lasting connections.

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Key Findings

Foodservice loyalty schemes offer a similar user experience, revealing an opportunity for innovation

Foodservice loyalty programmes often centre on a point-based system, which, to a certain degree, holds significance for members by redeeming points on meals. However, with many operators adopting similar schemes, the inherent value tends to diminish. An opportunity exists to enhance these programmes by customising them to the brand’s audience and incorporating loyalty features that strongly resonate with them.

The landscape of competition has shifted to the mobile realm, where players vie for coveted app space

The vast array of apps available has led to a dispersion of loyalty efforts, making it challenging for customers to consolidate rewards efficiently. Obtaining a reward often becomes a long-term pursuit, potentially diluting its perceived value in the eyes of consumers.

Embracing emotional loyalty and community-based rewards is essential in foodservice

Foodservice has emerged as a captivating area for fandom, with consumers actively seeking communities around their culinary passions. Loyalty programmes play a crucial role in fostering brand connections within this space. Emotional loyalty is key to enhancing added value and engagement, giving members a sense of ownership and belonging.

Personalised experiences drive greater loyalty, encouraging more engagement

By actively participating, customers contribute to a feedback loop that allows brands to refine their offerings and deliver the rewards and next generation features customers truly want. This level of personalisation not only enhances customer satisfaction but also reinforces their loyalty by showing that the brand understands and values their specific preferences.

 

Scope
Executive summary
Loyalty ensures customer retention and added value to the overall eating experience
There is potential for increased participation in restaurant loyalty programmes
Groceries and foodservice characterised by robust weekly purchasing habits
Distinct purchasing habits and expectations across generations create loyalty opportunities
Opportunities lie within purchase habits and affluent populations
Two main categories of loyalty programme features: Traditional and next-gen
Top 10 leading foodservice operators rely heavily on point-based programmes
Restaurants explore gamification for enhanced engagement and onboarding
Domino’s, KFC and McDonald’s are at the forefront of app engagement
Scalability, rewards and time constraints are key barriers for foodservice schemes
Competition intensifies as it shifts towards the app space on consumers’ smartphones
Top 10 leading third party delivery players and their loyalty schemes features
Four predominant features found in third party loyalty programmes
Ordering from a restaurant’s app is primarily driven by factors other than loyalty
Foodservice rewards lack ambition and a long-term connection with brands
Foodservice can capitalise on the fandom it generates to build emotional loyalty
Long-term loyalty in foodservice hinges on seizing the opportunities that lie ahead
Millennials and Gen X have a shared desire to explore brands more deeply
Chipotle’s value driven goals integrated as part of its loyalty scheme
The Club Cage uses a Canadian hockey team to ignite emotions among its members
Providing personalised experiences reflects a brand’s understanding of its customers
McDonald’s personalises its services by preparing meals before customers’ arrival
Burger King uses Royal Perks members’ preferences to create the next Whopper
Brands should adopt a dynamic approach to activate and cultivate brand communities
Taco Bell empowers loyalty members to take part in the design of hot sauce slogans
Food Fighters Universe fosters digital community with Web3 technology and NFTs
Key takeaways
Appendix
Appendix

Consumer Foodservice

Consumer foodservice is composed of cafés/bars, full-service restaurants, limited-service restaurants, self-service cafeterias and street stalls/kiosks.

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