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Apps Help Restaurants Counter Social Media Shifts

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Apps help restaurants counter social media shifts Jennifer Bartashus, Jitendra Waral Bloomberg Intelligence analysts


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An increasing number of restaurants are using mobile apps as a primary way to interact with customers. Companies such as Starbucks, Dunkin’ Donuts and Yum’s Taco Bell have robust apps featuring loyalty programs, mobile ordering and payment. McDonald’s and Chipotle are among chains slower to create dynamic apps. Developing apps may be increasingly important to avoid having to chase customers as they move between social media platforms such as Twitter, Facebook, WhatsApp, Instagram and SnapChat.


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Twitter, Facebook slow user growth may hurt restaurant strategy


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A slowing of new and active users for Twitter (320 million) and Facebook (1.5 billion) may force restaurants to adjust social media strategies. Fast-food chains, including Yum’s Taco Bell and KFC, McDonald’s and Burger King use Twitter, Facebook and YouTube to interact with customers. Should these dominant companies see monthly average-user growth plateau, it could cost restaurants more to monitor a growing swath of platforms, including Pinterest, TripAdvisor, Google, Yelp and OpenTable.


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Facebook, Twitter Monthly Average User Growth


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Restaurant mobile apps may benefit from Twitter overengineering


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Twitter’s monthly active-user growth has sequentially declined as users have begun to find the platform increasingly complicated. That’s creating growth opportunities for competing social media services such as Facebook’s Instagram’s estimated 300 million users) and WhatsApp (900 million), and Snapchat (300 million), which offer simpler messaging. The plethora of platforms can make it hard for restaurants to manage brands and customer communication. Self-developed apps can help with direct marketing.


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Daily Active Users to Monthly Active Users Ratio


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Fast-food tweets drop as Twitter new, monthly-user growth slows


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Total tweets posted by fast-food companies including McDonald’s, Yum, Burger King, Wendy’s, Sonic and Jack in the Box have declined over time. Monthly tweets have dropped from over 700 in March 2014 to about 200 in October 2015 for these companies. This may reflect a slowdown in active user growth at Twitter and an increase in the use of company-controlled mobile apps to communicate with customers. Restaurant advertising budgets range from 2-5% of sales and are increasingly focused on digital media.


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Fast Food Tweets Declining Over Time


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McDonald’s marketing blitz bests Taco Bell in Twitter retweets


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McDonald’s overtook Taco Bell and Burger King’s Twitter retweet ratio in October, as the fast-food titan aggressively marketed all-day breakfast, while it seeks to continue a sales growth recovery. McDonald’s and Burger King focused more than 75% of their tweets during the middle of the day, while Taco Bell targeted 88% of its tweets during evening hours. The measure can be used as a proxy for social-media effectiveness, given it shows how often company tweets are retweeted by followers.


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McDonald’s, Taco Bell Retweet Ratios


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McDonald’s, KFC garner most Facebook ‘likes’ among restaurants


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Facebook is a critical tool in a restaurant’s marketing arsenal. The platform lets chains engage directly with followers, advertise new menu items and offers, and use analytics to understand customers and marketing activities. This has been important, given restaurants have trailed other industries in developing loyalty programs, which generally deliver copious amounts of consumer-related data. Restaurant dependence on Facebook could slow as self-developed mobile apps and loyalty programs become more prevalent.


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Top 3 Casual-Dining, Fast-Food Chains by “Likes”


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Bloomberg Intelligence offers valuable industry and company data, interactive charting and written analysis with government and credit insights from a team of independent experts, giving trading and investment professionals deep insight into where crucial industries stand today and where they may be heading next.


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