By John Kelly, CEO of Zenreach
Looking at the available information, I think it’s safe to say that restaurants and bars have borne the brunt of the coronavirus pandemic.
Our data show that foot traffic to dining and drinking establishments dropped by 60% last March, as the stay-in-place orders started to roll out. As a country, we hit our low point in mid-April when in-store traffic was down 75% from the previous year.
Obviously, that is a huge decline, and to my knowledge we have never seen such a precipitous drop in foot traffic.
From the period of mid-April through June, we saw a slow but steady increase in foot traffic, and we climbed back up to 50% of the 2019 numbers. Now, that is still quite a bit down from normal, but the trends were looking encouraging. However, from July to mid-October, we saw a flattening of foot traffic, and beginning in mid-November, we began to observe downward movement in the trend lines.
In December, the National Restaurant Association desperately called on Congress to approve more relief funds for restaurant owners, citing the fact that 17%(!) of restaurants in the country had closed either permanently or for the long term.
But now, in the second month of 2021, there are reasons for restaurateurs and bar owners to be optimistic.
Covid-19 cases have been declining for the last four weeks, and the seven-day average is down almost 20% from the week before. Several of the country’s largest states—including California, Illinois, New York and Michigan—have begun easing restrictions on in-person dining. And although concerns still remain about another spike in cases caused by the emergence of new viral variants, over 44 million doses of vaccine have already been administered in the U.S.
Furthermore, having dealt with the impact of the coronavirus on restaurants and bars for nearly a year, we now better understand the formula for getting through this challenging period. Those businesses that can boost online ordering or home delivery will fare much better; consumers have already shown a willingness to adapt to those channels.
While we do not know whether cases will continue to fall or if the easing of restrictions will hold, we do know that these developments certainly bode well for bars and restaurants. If this trend continues without interruption, it will certainly help increase in-store foot traffic for these merchants. (We are unlikely to see a return to normal, however, until the vaccine has been more widely distributed.)
Of course, with the country closing in on 470,000 Covid-19 deaths, it’s certainly understandable that a large portion of the population still has serious health and safety concerns about patronizing brick-and-mortar businesses.
Here are a few things bars and restaurants can do to pull in customers and get through the pandemic:
First, it is critical to take safety precautions to alleviate consumer concerns—like sanitizing surfaces, limiting dining room capacity to maintain social distancing, and implementing mask policies. But simply taking these precautions is not enough—it is imperative that bar and restaurant owners let their customers know about these actions. Merchants must get the word out to their guests about their safety precautions and how they are open for business.
Contactless solutions in particular have become quite popular over the past year. According to one study, 53% of consumers have used a mobile contactless payment option for the first time since the pandemic began, and an astounding 85% of consumers say that it is important that a retailer offer the choice for contactless payment.
There’s also evidence showing that stores which haven’t implemented some sort of contactless payment solution are at a competitive disadvantage. The same study cited above indicated that 28% of shoppers will actively avoid a retailer that doesn’t offer a contactless payment option and instead choose one that does.
Second, now more than ever, it is vital that dining and drinking establishments are able to identify and connect with their most valuable customers. If you have limited capacity in your dining room or barroom, you want to make sure that you focus on bringing in your loyal, high-value consumers, and not the low-ticket, one-and-done consumers. Because of our company's ability to determine the most frequent and high-value consumers, we have been instrumental in aiding our clients to bring those consumers back.
Third, as counterintuitive as it may seem, now is a great time to boost online advertising for new customers. Consumers are more likely to perceive brands who advertise during economic downturns as industry leaders who are more stable and reliable, which could translate to increased business both now and after the pandemic passes.
Furthermore, with many competitors cutting back on ad spending, the cost of media has become quite inexpensive. The combination of lower online advertising costs and record-high online engagement rates have created a perfect storm for marketers looking to capitalize on a large captive audience.
With most states now at some stage in the reopening process, the actions restaurant and bar owners take in these early days and weeks will set the tone for their long-term recovery. I think those who manage to survive through the pandemic will find strength in knowing that they have the ability to adapt to the circumstances and make the changes their businesses need to get through difficult times.
John Kelly is the CEO of Zenreach, a walk-through marketing company. Their personalized ‘smart solutions’ help businesses create meaningful connections with customers, in real life and online.