In an increasingly competitive industry, casual dining chains are focused on distinguishing themselves from competitors and drawing in customers. While some have found the right recipe for success and are flourishing, others are struggling to attract customers. A comparison of two diverging chains will help to uncover the ingredients for success.
Casual dining chains are experiencing tough competition because consumers have a variety of restaurants from which to choose. Many Americans are restricted by limited disposable income as the US economy continues its slow economic recovery and look for good restaurant experiences at moderate prices. In this tough market space, restaurants look to analyze and influence consumer opinion and behavior.
One restaurant that is struggling in the current environment is Red Lobster. With declines in revenue and same-restaurant sales, Darden Restaurants is planning a Red Lobster spinoff. The separation of Red Lobster from Darden’s more successful chains like Capital Grille and LongHorn Steakhouse, which cater to restaurant-goers with more disposable income, is meant to increase shareholder value.
While the future is unclear for Red Lobster, other restaurants are succeeding. What factors distinguish moderately-priced restaurants themselves from their competitors? Some say that the most successful chains offer lower prices, conveniences, and use technology to reach and engage consumers.
These factors may be part of a larger industry shift. For instance, restaurants like Chipotle boast natural ingredients and offer customers higher quality meals at lower prices. Others, like Chili’s, are offering more efficient service and conveniences such as delivery service and mobile ordering.
Why is Red Lobster suffering while so many other casual dining restaurants are thriving? Social media analysis allows for a comparison of Red Lobster and Chili’s that highlights the differences between thriving and diving. Looking at data from the past three months, several key differences emerge.
Comparing the data side by side shows a distinct difference between conversations surrounding Red Lobster and Chili’s. While Red Lobster and Chili’s have experienced a similar proportion of positive conversation, 72% and 68% respectively, the composition of this conversation differs dramatically.
Posts that discuss eating at or looking forward to Red Lobster or Chili’s dramatically favor Chili’s making up 70% of the positive conversation in contrast to only 27% for Red Lobster. This statistic alone would trouble any restaurant as intent to purchase guides revenue and profits.
Are people just not interested in eating at Red Lobster? No. In fact, people really want to eat at Red Lobster. While 5% of Chili’s positive conversation references wanting Chili’s, it makes up 18% of Red Lobster’s positive conversation. While this difference may be explained by Chili’s strategy to cater to an audience with more disposable income, it is vital to understand what draws or fails to draw people to these two restaurants.
When analyzing the topics that comprise the conversation surrounding these two restaurants, a related trend appears. Chili’s conversation boasts significant diversity regarding menu items, including people talking about wings, crispers, cheese fries, and lava cake. While there is also mention of competing restaurants like Chipotle and TGI Fridays, tweeting about specific dishes highlights why people might be drawn to eating at Chili’s.
In contrast, the Red Lobster conversation focuses on one item and surprisingly it is not seafood – it’s Red Lobster’s famous biscuits! While customers may experience a hankering for Red Lobster biscuits, it is questionable if biscuits alone can meaningfully drive customer behaviors like visiting and ordering at Red Lobster.
While having such a popular product can greatly benefit a business, it appears as though this is not the case for Red Lobster. A love for only one menu item – the biscuits – is simply not powerful enough to move consumers to go to Red Lobster. Potential customers can purchase Red Lobster biscuit mix at the grocery store and make the same biscuits at home, which may only decrease the draw of the biscuit.
ForSight’s Affinities feature also shed light on how Chili’s and Red Lobster fans differ in terms of their general interests, including lifestyle, media and entertainment, sports, professional, and political interests. While those discussing Chili’s have stronger affinities for professional ice hockey (in particular the New York Rangers) and parenthood, Red Lobster’s audience shows more interest in musical topics. Affinity for soul music, the O Music Awards, and artists such as Rihanna, Beyonce, and Lil Wayne are more aligned with Red Lobster. Also, they show a stronger interest in smartphones and tablets than the Chili’s audience.
When it comes to future advertising, Red Lobster could capitalize on their audiences’ affinity for soul, pop, and rap music through more music-centric ads and promotions. Also, the company should make more moves to incorporate mobile- and tablet-friendly promotions and advertising, just as Chili’s has done, into their campaign efforts.
Although Chili’s and Red Lobster experience similar positive conversation, the composition of Red Lobster conversation is simply not enough to move consumers to purchase. Competitors are offering conveniences and using technology and food quality to attract customers, and Red Lobster is not keeping up. However, comprehensive social media analysis is uncovers the nuances that distinguish successful businesses from struggling ones. Chili’s rises above with more people talking about dining in restaurants and referencing a diversity of favorite menu items. The knowledge acquired through social media analysis is vital for selecting the best ingredients in an increasingly competitive market.