EMERGING COMMUNICATION TOOL
Smartphone App for Small Restaurant
Christine Wu and Rickard Markgren
Smartphone applications are emerging enormously these days. The smartphone app lifecycle began in July 2008 when Apple Inc. released the App Store for the iPhone. Android, Windows and Blackberry soon followed to compete in the app market.
Short for application, an app is software that performs a specialized task on smartphones or tablets. It can show specific information like the weather, access a particular website or publication such as Facebook, or be a game such as Angry Birds. It can enhance the hardware features on a phone by adding special effects to photos or providing a streamlined keyboard. There is an app for nearly anything one may want to do. Furthermore, because apps are designed for phones and tablets, they have simply layouts that can be accessed by tapping or touching the screen with one’s fingers.
According to Pew Research Center’s International & American Life Project16, although 40% of U.S. adults download mobile application to their smartphones and 75% to their tablet, most adults do not use many apps. 30% among the 2,260 adults surveyed use only three to five mobile apps per week, while 18-20% use six to ten apps per week. In fact, mobile users tend to think local when it comes to mobile applications, so small or local businesses could benefit from using mobile apps as a marketing communication tool.
In recent years, the rise of apps has started gaining momentum in the restaurant industry. Apps that are related to restaurants can be divided into two categories: multi-restaurant apps and personal restaurant apps. Multi-restaurant apps are review apps such as Yelp, coupon apps such as Groupon, or map-based apps such as Google Maps. A personal restaurant app is an app specifically designed for one restaurant.
Multi-restaurant apps are already commonplace. Whenever people visit a new place, they search for where to go on their apps. It has become the easiest way to direct someone to a popular or highly-rated restaurant. However, many larger franchises such as Pizza Hut, McDonalds, and Chili’s have started developing their own apps in recent years with the primary purpose of retaining customer loyalty. According to the Interactive Advertising Bureau (IAB) and interactive media company Viggle in January 201317, more than 2/3 of the consumers use their smartphone or tablet computer to place online orders for either delivery or pick-up. 55% have used at least one “multi-restaurant” app, such as Yelp, Urbanspoon or Zagat, and 50% indicate that they have downloaded at least one restaurant-specific mobile app.
If customer loyalty drives larger restaurant apps, loyalty-focused apps should be all the more important for small, local restaurants. Small restaurants depend even more heavily on return customers than larger franchises, and are more invested in their customers to have a personal relationship with the restaurant. The high dependence on customer loyalty for local restaurant success is why we believe designing an app for one’s small local restaurant is an emerging marketing communication tool.
We believe smartphone apps are a cutting-edge emerging marketing communication tool for small local restaurants. Although at the moment, larger franchises dominate the market, we believe that within five years, mobile apps will become an indispensable marketing communication tool for small, local restaurants.
II. EXTERNAL TRENDS AND MARKET FACTORS
The current external trends are perfect for the emergence of smartphone apps as a marketing tool for small restaurants. First, the number of smartphone users is skyrocketing. Smartphone users in the U.S. have increased from 62.60 million to 137.50 million within three years, and as eMarketer14 predicts, the smartphone users in the states will increase to 192.40 million in 2016.
Second, the cost of app development is rapidly dropping, which makes it more feasible for a small restaurant to develop a smartphone app. There are dozens of do-it-yourself app creators for small businesses such as the AppBuilder, Apps Builder, Appmakr, AppExpress, etc., which make the creation of apps easy, affordable, and accessible.
Lastly, the culture behind smartphones is evolving to slowly involve every aspect of personal life. Smartphones are no longer just about communication, but are increasingly a part of daily life. Smartphones can be used to take notes, browse the internet, play games, or even order food. An app for a local restaurant will blend in nicely with these emerging trends and complementary apps. A restaurant’s app can be linked to a review app like Yelp for convenient reviewing or a map app like Foursquare for discounts and publicity.
III. COMMUNICATION OBJECTIVES
There is some innate value to launching an app regardless of its functionality. A restaurant can receive a small boost in publicity through an app launch event, and will also expand its brand online through App Store, Google play, or other app sites. The release of the smartphone app could also attract potential customers that they would never know of the restaurant otherwise.
Aside from this small publicity, however, the functionality of an app is what will make it a truly effective marketing tool. The foundation of any app should be to provide customers with a convenient way to access information, make their restaurant experience more pleasurable, incentivize their return to the restaurant, and potentially attract new customers. How this is achieved will vary drastically between different types of restaurants. However, there are some features which may be universal to all restaurant apps. All apps should be clear and up-to-date with restaurant information, promotions, and special events. All apps should provide some form of “loyalty point” system though the rewards may vary. Apps should also provide a means for customer interaction. Smartphone apps are in a unique position to make reviews and feedback very convenient for customers, and such a feature should be commonplace for small restaurant improvement and a customer’s sense of investment.
With the rapidly expanding use of smartphones, the target audience of an app is nearly any demographic in the United States from young students to older businessmen. The opportunity for a restaurant to include itself in the personal life a customer through their smartphone should not be missed.
IV. RISKS AND CREATIVE STRATEGIES
However, simply developing an app is by no means a guaranteed success. Developing a good app takes time and money, and creating one that does not engage the customer base in the right way could be a large risk. As T.G.I. Friday’s Vice President said regarding their app, “as far as price goes, it wasn’t an economical decision. I’m not sure the development of custom apps is down at all. Once you add functionality, it’s similar to building a website and not necessarily less expensive.” The problem with T.G.I. Friday’s app was that the app was approached similar to a website, simply aiming to provide redundant information instead of creating an avenue of benefit and interaction for a customer.
Apps must cater to the specific type of restaurant and the food being served. Delivery restaurants must include delivery function in their app. For example, Pizza Hut’s app enables people to order highly customized pizzas from their mobile, a powerful example of using an app as a marketing tool. Bars or cafés, on the other hand, do not need delivery services in their apps, but should include functions that encourage mood-setting or interaction between customers.
Vive la crepe, a small restaurant which offers savory and sweet crepe located in New York City, has an excellent example of an effective local restaurant app, which they launched for free download in 2011. Vive la crepe designed a useful app that fits well with the food they serve. Crepes have some similarities to pizzas. They can both be made in a short time for pick-up, and they both have choices for customers to add their favorite toppings. With the smartphone app, customers get loyalty points every time they buy something at the restaurant, which they can use to get free meals or topping. To get the loyalty points all they need to do is to log in with their e-mail address, take a photo of their receipt with their mobile camera, and they receive the awards.
Loyalty points not only increase customer retention, but also improve post-purchase behavior. This smartphone app makes it more likely for customers to write positive reviews on sites like Yelp or Foursquare which in turn creates a positive feedback loop of more customers. You can think of this loyalty program as a conative tactic. The idea of this type of tactic is to lead the consumer to a direct response, to induce a consumer behavior and set into action a hierarchy of effects during purchase. Vive la crepe’s app has thus far been successful, as Ann Strini15 comments, “Any time you go inside, the managers are all too willing to promote this app – take a photo of your receipt, and start earning ‘sweet’ rewards like a coffee or sweet crepe with any purchase. That’s smart, because I could go anywhere for lunch. But an app that gives me an incentive to bring along friends so I can share dessert? That’s smart. Vive la crepe! Not only earns my loyalty, they also earn valuable share of wallet over other value eatery spots.”
Within five to ten years, smartphone apps will become a common if not essential technology in our lives. Mobile apps will become one of the required marketing tools for most businesses. As for small local restaurants, there is a promising future for its app development. Development costs are decreasing and functionality is increasing. Within a few years, small restaurants could use apps as an ordering tool to replace the waiters in the restaurants. This would not only make the ordering process more efficient, but also reduce labor cost. Small restaurant apps could also enhance creative experiences for the customers. For example, a person at a bar could order a drink for a person they are attracted to through the restaurant’s app without going through bartender.
Only when mobile apps are designed for the customers to have a simpler, more efficient, and more interesting experience will customers use them. When apps become as irreplaceable as websites or any other modern marketing communication tools, restaurants will have an unprecedented ability to retain customer loyalty.
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