Data IntelligenceEMERGINGF&B Insights

How Restaurants Use Big Data to Increase Profits

Big data is a powerful tool that restaurants use to gain a competitive advantage. Data analytics offers insights into reducing costs, increasing business, spotting new trends, and improving operations. To achieve this advantage, restaurants track data on operations, sales, customers, and much more.

Restaurant Analytics Defined

Restaurant analytics involves gathering and measuring data and extracting insights. While reports offer data sets and core metrics, analytics analyzes what this data means. For example, you may gain insights into why one meal is selling better than another or why one location would offer better opportunities than the others you’re considering.

Converting data into meaningful insights can help improve everything from menus and pricing to customized marketing campaigns.

Getting Data

Big data refers to the massive amounts of data that are constantly generated around us. It comes from your POS system, inventory management software, payroll management, reservation system, mobile apps, CRM, social media, website, and more.

Guest data offers some of the most important information and includes their behaviors, demographics, wants, and needs. This data enables you to strategically market to the correct population, personalize experiences, and create a better customer experience.

Using Data

As FinancesOnline shared, “Information is Power. But only in so far as the insights they reveal.” It’s hard to fathom, but Netflix saved $1 billion by using big data to improve customer retention. While most of us don’t fall in the billion-dollar range, you can increase profits significantly. The top benefits of data analytics include improved business efficiency and providing better products and services, which ultimately leads to higher income.

One important element is customer segmentation or separating customers into groups based on their shared characteristics. This garners insight into effective and better-targeted marketing messages, methods, and platforms for each group. In addition, demographics help create in-depth customer profiles, enabling you to make better decisions about menus, prices, restaurant design, and growth prospects. 

You can even surprise your guests and enhance their experience by having your staff make preference-based recommendations when they place their orders.

Another critical area for data analysis is developing your restaurant’s expansion plans and determining the correct location. Predictive analytics offers key insights and uses information from the venues in a particular area and in-depth neighborhood profiles while considering possible cannibalization. This information tells you not only the best options but also the locations to avoid.   

Menu engineering is also made easier with analytics which helps operators decide how to arrange menu items, which ones to keep, and which ones to rework. Combining data from your POS and customer reviews gives a fuller picture of what’s working and what isn’t, and, most important, why.

Data also helps train and recognize FOH staff who regularly cross or upsell and proves invaluable for employee incentivization programs. Analyzing historical data can also help to optimize labor costs during certain times of the year while ensuring enough staff to support guests. 

Data Science in Action

At EMERGING, our team of data scientists, data engineers, and analysts use data analytics daily to glean actionable insights and offer our clients real-time, evidence-based observations that maximize their revenue while reducing risks. We help them understand their VIP and Core customers, including who they are, when they visit, their buying and spending habits, and where they live. 

By better understanding their customers, operators can adjust menus and marketing, ensuring they’re appealing to guests that spend considerably more than infrequent visitors. This information also plays a vital role in successful expansion plans as you determine your next restaurant location. 

That’s where EMERGING comes in. We use our extensive knowledge in predictive analytics and real estate, as well as proprietary POS and mobile data sets, to identify where our clients should open their next locations based on the highest profitability and lowest risk. In addition, our real estate experts negotiate with developers and landlords, and our team of experts in the industry provides invaluable insights into supply chains, costs, labor, and finance. Ultimately, we ensure our clients hit their goals, now and far into the future. For additional information on data analytics and using it to ensure success and increase profits or to schedule a consultation, contact EMERGING.


What data is collected in a restaurant?

Restaurants produce raw data from multiple sources, including the POS system, inventory, payroll, guest management software, social media, inventory management, restaurant management software, and mobile apps. This data then needs to be collected, cleaned and analyzed. 

How are restaurants using big data?

Restaurants use big data in countless ways, including enhancing the guest experience, improving marketing campaigns, menu engineering, and expansion plans. Ultimately, they use data to boost profits and ensure guest satisfaction.

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