Restaurant Analytics Explained: Why and How to Use Data
In the past few years, technology has become an integral part of the once-analog food industry.
Restaurants have come to rely on high-tech solutions for everything from ePOS (electronic point of sale), to monitoring stock and inventory in real-time, to dynamically managing staffing levels.
Technology is transforming restaurant efficiency - and in no area is that more true than in restaurant data analytics.
Modern restaurant analytics and restaurant mobile analytic apps give you access to big data and business intelligence, from sales income and cost of goods sold, to robust employee workforce data, and even effective reputation management, to enable data-driven decision-making.
How restaurants are using data analytics
Business analytics takes data from across your restaurant operations (usually via point of sale (POS) system) and uses data science to break it down into digestible business intelligence information.
From this business intelligence, you can use predictive analytics to take actionable insights and make informed decisions about the business.
Individually, each data point (a swipe of a credit card, a sale entered into the system, a food delivery order) may not look like much. In aggregate though, all this information can give you deeper insights.
A restaurant owner or manager can apply data analytics to many parts of the business. From ordering and payment information to reservations and wait time to tips and reviews, your data can tell you so much that you might not know about your restaurant.
The insights gleaned from proper data analytics can empower you to improve efficiencies, increase restaurant revenue, and ultimately grow your restaurant business.
Advanced analytics can give you access to business reports like cost of goods sold, and actual vs. theoretical costs.
How data analytics can unlock growth for restaurants
One of the key benefits of data analytics for restaurants is the ability to see and take advantage of opportunities for increased revenue and growth.
Track and improve server performance
Use data analytics to identify your best and worst performing staff with KPIs, and incentivise staff to hit performance targets.
You can even use performance data to make staffing and rota decisions, pairing top-performing staff with VIP customers and using individual staff members’ strengths and weaknesses to your advantage.
Improve customer service
In addition to improving server performance, data from loyalty programs can improve customer satisfaction for individual diners.
Use customer purchase history data to give individualised offers, birthday and anniversary coupons, and even advanced knowledge of allergens and preferences to delight customers and encourage spend.
Increase table turnover
By optimizing point of sale to improve speed and efficiency through ordering and payment, you can use data to increase table turnover.
This leaves you free to serve more customers, without leaving your existing customers feeling rushed.
How better data can lead to savings
In its simplest form, analytics is just gathering, measuring, and presenting data.
It gives restaurant managers and owners a way to easily identify and plan for patterns, and to pinpoint and resolve potential issues, before they become a real problem.
Manage labor costs and hiring costs
Data analytics can give you insight into the busiest times and days in your restaurant, so you can plan staffing and rotas with pinpoint accuracy, and keep labor costs to a minimum.
Optimize your menu to minimize food waste
Analyze and predict ordering trends, and track most and least popular menu items through different times, days and seasons.
You can combine this with cost of goods sold data to find your most and least profitable items, and highlight profitable items with menu placement or special offers.
You can also use menu and POS data to cut down on kitchen food waste.
Optimize your marketing campaigns
Data analytics can help you to reach the right audience and personalize your marketing campaigns.
Particularly with social media like Facebook, Instagram, and Twitter, you can access dozens of data points about your campaigns, to help you optimize marketing spend.
Cost of Goods Sold Report
The cost of goods sold (COGS) is the direct cost associated with producing the food (or other goods) you sell.
Using data analytics, you can gain deeper insights into the costs associated with each and every menu item, from raw ingredients to garnishes and condiments.
Get a true understanding of the most and least profitable items on your menu.
Roughly one-third of revenue goes towards COGS in a typical restaurant. By gathering and analyzing data on the cost of goods sold (and then acting on those insights), you can reduce those costs, and increase revenue.
A cost of goods sold report can help you to identify areas for improvement.
You can see which menu items aren’t selling well (and reduce your inventory of those items so they don’t add to the waste bill).
You can also see which items are frequently selling out, and ensure that you always have enough stock to hand, to maximize restaurant sales and revenue.
You can also pinpoint items that have a high cost of goods sold, and reduce costs on those items by changing suppliers or tweaking the recipe.
Actual vs Theoretical Cost Report
The actual vs. theoretical cost report gives you all the information you need to make informed decisions about your spending while identifying fixable issues that can save you money.
It allows you to analyze the difference between the amount of money you should be spending on inventory, versus what you’re actually spending.
By taking into account the inventory lost to factors like over-portioning, theft, spills, misfires, over-pours, comps, and kitchen food waste, you can get a more accurate overview of the real costs involved in running your restaurant.
From there, it’s easy to take the necessary steps and precautions to avoid those additional costs.
Importance of Restaurant Data During COVID-19
Data analytics is key to insightful business intelligence.
Without the right data, how do you know you’re making the right decisions?
The restaurant industry has had enough uncertainty during the past two years without supervisors, managers, and restaurant owners second-guessing every decision.
Lockdowns, stay-at-home orders, and general fears about COVID have meant restaurant margins are tighter than ever - which makes data insights more important than ever.
In the end, Interpreting data and putting it into action can help you meet and exceed customer expectations, increase efficiency and revenue - and ultimately, grow your restaurant business.