Convenience must be your business model - Trade Only Today

Convenience must be your business model

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It’s all about customer convenience these days. And if you’re not offering it, you could watch your business decline.

There may be no better evidence of this truth than today’s restaurant business. It saw July same-store sales experience a sharp decline of 2.8 percent from June. In fact, according to TDn2K , which tracks weekly sales from more than 28,500 restaurants totaling more than $68 billion in annual sales, four of six restaurant segments have reported negative comparison sales since the fourth quarter of 2016.

More specifically, TDn2K finds that casual family dining operations have reported negative sales for the past five quarters. Even quick-service restaurants, once the high fliers in the food service business, have been trending downward since the beginning of 2017.

Actually, the downward trend really began to take hold in early 2015. Sales and traffic both plunged 8.7 percent over the same two-year period. TDn2K said it originally expected some improvement this year, given that the industry was comparing against weak results in 2016. It hasn’t happened.

But what lessons might boat dealers learn from the restaurants’ decline? We need to examine why restaurants are struggling.

The big answer is that their downturn reflects shifting consumer habits. Specifically, consumers have been showing a preference for convenience, and that’s resulting in rapidly rising sales of prepared foods at supermarkets and other stores. Accordingly, grocery stores are steadily increasing their ready-to-cook meal kits and/or many already cooked offerings.

Kroger CFO Michael Schlotman, in a recent earnings call, reportedly said the quality of the company's new meal kits is essentially “the same as going to a restaurant and getting the meal . . . but people like to prepare something at home and they find it easy.”

The desire for convenience is also fueling the success of online meal-kit providers, for example Blue Apron, that are also eating into restaurant sales. Not surprising, even Amazon has signaled an interest in the meal-kit delivery business. And, as Victor Fernandez, executive director of insights and knowledge at TDn2K, confirms: Restaurants are facing “competition from more prepared meals from grocery stores, meal kits [by delivery companies] and even from convenience stores and food trucks.”

Consumers want “convenience, speed, to-go and delivery,” confirms Fernandez, which is driving some higher take-out and drive-through sales for restaurants. According to reports in eMarketerRetail, restaurant delivery sales should rise by an average of 12 percent a year, to $76 billion, by 2022, up 77 percent from $43 billion currently. What will drive this increase is — here’s that key again, convenience!

I’ve addressed in previous blogs the fact that our customers now make up the on-demand society for services and products ranging from gasoline deliveries to instant movies. People fly from one place to another at 550 mph and growl that they’re inconvenienced if they arrive five minutes late. They become angry if it takes an extra 20 minutes to service their car and want to know what you’re going to do to “make up” for their inconvenience.

Marine dealers face the same challenges. To keep customers happy, dealers need to explore ways to make it more convenient than ever for them to have their needs met. It doesn’t matter whether it’s in the sales process, a service issue or the purchase and delivery of some accessory or other product.

Given that customers are now “convenience-oriented,” dealers must find ways to build more convenience into their operations or lose business to others that do.   

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