While retailers see December sales spike by as much as 77%, restaurants are turning to new loyalty tools to keep VIPs coming back during the holidays.
At Thanx, we do everything we can to help all merchants effortlessly identify, engage, and retain their best customers – and no season has quite the same impact as the last two months of the year. In our work with hundreds of restaurants across the country, we found that over the last several years restaurant revenue declined by 22 to 45 percent during the post-Thanksgiving holiday period. This dining-out lull is in sharp contrast to the country’s major retailers, which see as much as 40 percent of their revenue in November and December.
Retailers opened their doors this year on Thanksgiving Day to get a jump on holiday shoppers, and with good reason. ABC News reported that the holiday season traditionally accounts for 40 percent of a store’s annual sales. According to 2009-2013 retail data from the United States Census Bureau, monthly sales spike 24% in December for Furniture retailers, 47% for General Merchandise, 67% for Electronics, 72% for Clothing, and 77% for Sporting Goods. The National Retail Federation forecast 2014 holiday sales of $616.9 billion, up 4.1 percent from the previous year, which mirrored an estimate from the International Council of Shopping Centers, which noted this growth to be the strongest in three years.
For restaurants, however, the holiday season has the opposite effect. In a Thanx study across quick serve, fast casual, and fine dining, the average restaurant experienced a 27% revenue decline in the month of December, as compared to that year’s monthly average. Expanding the comparison to the five-week period including Thanksgiving, the decline was even more severe, with revenue decreases ranging from 22 to 45 percent.
“With all the excitement about Black Friday and Cyber Monday, its easy to assume that everyone wins during the holiday season – but these can be some lean times for most restaurants. People simply aren’t eating out as much during the holidays.” said Zach Goldstein CEO and founder of Thanx. “In our experience, the restaurants that are successful at combating the downturn find ways to focus on retaining existing customers.”
To alleviate the holiday lull, Thanx has expanded its range of customer retention marketing tools to help merchants identify their best customers and offer incentives to return during the last few weeks of the year. One Thanx merchant – Mixt Greens, an eight-location quick serve salad concept based in San Francisco, CA – used Thanx last year to identify VIP customers and reward any December visit with a wrapped gift of pre-packaged salad dressing. More than 50% of those VIPs redeemed the reward and most visited Mixt Greens several times during the slow Christmas and New Years weeks as a result.
“Through Thanx, we’ve been able to make sure customers know how much we value their business and we can stay busy during what’s traditionally been a slow period,” said David Silverglide, CEO of Mixt Greens. “By saying ‘Thanx’ to our best customers, we’ve seen a 34% increase in frequency of customer visits.”
This year, Mixt Greens has a different approach – again taking advantage of the effortless retention tools provided by Thanx. With their “Eat Healthy This Holiday Season” promotion, Mixt Greens will deliver five 50%-off salads in 2015 to any customer who makes five purchases between Thanksgiving and the end of the year. Just like the core Thanx loyalty program, qualifying purchases register automatically when consumers pay with their preferred credit or debit card, thus requiring no added steps at checkout.
Thanx, founded in 2011, works with restaurants and retailers across the United States. The company next plans to analyze transactions across industry verticals to pinpoint how restaurant and retailers can create more effective loyalty programs.
