By Paul Barron, Foodable Founder
For over 25 years now, I have been tracking and studying fast casual and the consumer science behind this restaurant industry phenomenon. The changes and even the failures over the past two and half decades continue to be an experiment in the human condition of brand, quality and experience.
What fast casual has that no other segment has is simply the rights to the value for value idea, a proposition for consumers that is very appealing. QSR or fast food has always been a great price value but not a value in quality or experience. Casual and fine dining has an element that is usually the cause of the breakdown in the value for value equation being the service factor. You can’t control service, and it often fails you when you expect it to perform.
In comes this uncanny ability for the consumer to control the experience, hence service starts to become very fuzzy in relation to expectations from consumers. In fast food, speed is considered to the most important, then price, then a vast wasteland of nothingness appears for the consumer. The expectation is so low in fast food if your fast and cheap you have succeeded to a certain point.
Hidden Secret #1 – Give the Consumer Control
Value propositions in consumer science have been on the forefront for analysts and researchers for years. In fact the book “Why we Buy” by Paco Underhill was one of the first books/manuals I started using in my study of consumer science in fast casual for the past fifteen years and it still rings true today. Every consumer interaction has to feel as though they have received a deal. Hence secret number one – give the consumer control of the experience and it reduces the expectation so much so that the line becomes fuzzy around time and value expectations. Once you alter the perception of control, you shift the most dynamic element in consumer expectations – there is no blame for a service downfall. Of course you can still screw it up in line queues, food quality and friendliness– but the points of failure are limited in fast casual.
Hidden Secret #2 – They Will Pay More
Consumers have been trained to expect a great value and expect to pay for it. Apple is the champion of this thinking– if you provide such a great product that just works and you do it with style, you can charge more for the experience. If the product is marketed in such way that the consumer feels "cool" using it, that creates even more value. This applies to fast casual as well – provide a quality product, a cool place and be perfect every time, don’t nickel and dime them (like the tip) and you can charge more for an experience.
Hidden Secret #3 – We Actually Can Embrace Change
Choice is a crazy thing and change is even more crazy as humans we don’t like the idea of change or do we? Hence why simple menus like Chipotle work so well, very little change and most of all very little choice. Now apply this to the phenomenon to in the restaurant world of people getting tired of the same things over and over. In fact our society has seen a marked change in “Change”, according to recent studies people actually prefer change more today vs. just 10 years ago. Job change, marital change, political and so on. The big factor that has led the way is technology has pushed us to embrace the change from Windows and Blackberry to Google and Apple just to name a few. We are trained different now and this means big business for the future of fast casual.
Change will be the trump card, giving consumers options will be key, which is why I think we will see more micro fast casual brands in the future vs. large brands all with the same stuff. Think Chipotle and Shophouse or some brands that are starting to create micro fast casual concepts in the same cities. Consumers actually want variety now, in fact our recent study of the top 500 fast casual brands it showed an alarming data point of a brand churn of over 30%– meaning people would shift what brands they would frequent per month over three times in 10 dining occasions. With this change in consumer behavior, fast casual has the ability to maximize; they are smaller, more nimble and able to offer this new consumer the perception of change.
These "secrets" could be the driving force for growth in fast casual over the next decade. Best of all, the consumer dynamic is moving so swift now that only Fast Casual has the ability to keep up. QSR and casual dining systems just cant react fast enough, the emerging upscale casual concepts similar to Danny Meyer in NYC, Sam Fox in Phoenix, Richard Melman in Chicago and John Kunkle in Miami, are the future of where this industry is going. Ready – Set – Change.