How the hospitality sector can best meet the needs of the digital demographic
The licensed trade: a love machine
The licensed trade is crucial for love according to new research. In the report titled ‘The Future Pub’ the research highlighted the importance of the licensed trade as a location for meeting partners. A total of 49% of people met their future partners in licensed trade premises – 10% of folk met their partner in a bar, 26% in a pub and 13% in a club.
The survey which sampled 2,042 UK consumers via an online questionnaire in July 2013 was commissioned by Casio BSD and carried out by research company Censuswide. But it didn’t just cover the love angle.
The research which you can read here describes what the next generation ‘Generation Y’ – those born between the early 1980s and the early 2000s – expect from the licensed trade.
To the young people of today, online social currency converts into real-world social activities. The Casio research into the UK’s pub habits, looks at why businesses that take advantage of this can tap into an untouched digital demographic.
Getting to grips with Generation Y
Facebook, Twitter, Instagram – the reach of social media is difficult to ignore. And unsurprisingly, these social networks are where 16-to-24-year-olds spend a lot of their time. The untapped potential for leveraging these channels is evident none more so than in pubs, which look to have retained an appeal among young people – when compared to national average, 16-to-24-year-olds are over twice as likely to use the pub to go on a date, for example. (While of course these 16- and 17-year-olds cannot currently purchase alcoholic beverages in pubs, they are still an important audience to consider, as in one or two years’ time they have the potential to become regular pubgoers.)
However, with reports that 26 pubs close down each week, it’s clear that they aren’t doing enough to stay relevant to this crucial age group. So to retain its stake in this demographic and futureproof itself as an industry, pubs need to make a shift – one driven by digital trends. After all, there’s a valid business case for this: as 30% of 16-to-24-year-olds would be upset if their local pub were to close down.
Commenting on how to avoid closure, 15% of this age group says pubs need to understand their customers better. In essence, pubs need to get to grips with Generation Y and the prominence the digital world has in their daily lives. Nearly one in five (19%) of 16-to-24-yearolds have met a future partner online (46% higher than the 35 to 44 age group, and 375% higher than the 55+ age group).
The hospitality industry needs to recognise how much their customers are prepared to share about themselves online. If young people look to the internet to get a date, then why can’t pubs interact with them via the same channels? Nearly two-thirds of 16-to-24-yearolds (64%) use the pub for meeting friends and socialising, so if pubs are able to better cater to this group’s digital needs, they could soon see noticeable boosts to their profits.
Says Alan Todd, Head of Development for Punch Taverns, “The digital age is all about sharing information faster and wider, and pubs need to become a part of these online conversations.
We actively encourage our pub estate to market and promote themselves, both internally and externally, but in many cases simply getting online is the first challenge to overcome. There is much work to be done before this behaviour becomes normalised, but without going through this process pubs will lose the relevancy that they once took for granted.”
Young people’s pub yearnings
In the past, pubs could rely on locals to keep their business thriving, but now 18% of people (14% of 16-to-24-year-olds) don’t visit any pubs in their local area. This means that pubs need to be attracting a broader range of customers by actively marketing to them in a targeted way – as well focusing on Generation Y. The research reveals that young people have several expectations of pubs for the future that correlate with their tech-savvy lives. When compared to average figures, young people are:
• 27% more inclined to choose a pub offering discounts tailored to them;
• 67% more likely to prioritise Wi-Fi when choosing a pub, and; Two thirds more foresee self-service from the table (ordering digitally) as a future trend
• There’s a palpable disconnect between what the 16-to-24-yearold demographic want from pubs, and what pubs are offering them in return. Put simply: the industry is missing out on potential business.
What is clear is that pubs have not tried this approach yet. Surprisingly, a huge majority (67%) do not offer their customers Wi-Fi, despite the growing use of smartphones and mobile devices in public areas. What’s more, despite the decline in pub attendance, pubs are failing to offer their customers incentives – which are key to attracting punters during economically straitened times. In addition, three quarters (75%) do not provide loyalty schemes, 78% do not offer tailored discounts, and another 91% do not offer personalised marketing communications.
There is much to be done to meet the demands of Generation Y, but these technologies are not out of reach.
“There’s a palpable disconnect between what the 16-to-24-year-old demographic want from pubs, and what pubs are offering them in return, aiming to get the British hospitality association to provide this.”
• The strength of an SMS shot David Blair has been the publican of Oldham’s The Famous King George Pub since 2008, part of the Enterprise Inns’ pub chain. In early 2012, he installed two Casio QT-6600 EPoS solutions, along with two kitchen printers and the full Casio Business Management Solution (CBMS) with its added marketing module.
Offering SMS texting, e-shots and database compilation straight out of the box, David was keen to unleash the Casio EPoS system’s potential. He said, “We had been collecting customer data for some time through competitions, draws, loyalty cards and optin promotional schemes. Now was the time to start effective outbound promotions through the marketing suite. We started out with simple text- based SMS promotions outlining that evening’s Premier League Football Game and linked a food/drink offer and monitored the results.
“Sending each SMS campaign costs under £4 using Casio’s CBMS software. From the reporting that we use within the module, we have worked out that each promotional shot results in a £174 increase in sales, and this is increasing as the customer base grows.”
According to Kate Nicholls, Strategic Affairs Director, Association of Licensed Multiple Retailers (aLMr), “It’s clear that young people use social media to inform their going out behaviour – and these customers have remained resilient and have gone out to eat and drink throughout the recession. Put simply, outlets who ignore these findings and do not build relevant digital marketing into their commercial planning will not only be missing a trick, they will be missing customers.”
Marketing to Generation Y
Technology and personalised marketing communications are going to become increasingly important tools for pubs looking to attract Generation Y. When asked how they think pubs will have changed ten years from now, 29% of 16-to-24-year-olds believe customers will be able to order products digitally from their table.
Improved loyalty schemes for local people were also something that 16-to-24-year-olds (21%) saw as an important part of pubs’ offering in a decade’s time. So for the three-quarters of pubs who do not provide loyalty schemes at present, this is an area that certainly needs consideration moving forward.
Last orders: forward thinking pubs
For pubs looking to futureproof their business, they need to consider the needs and expectations of 16-to-24-yearolds. To attract this generation – one that views online and digital as part and parcel of their daily lives – pubs need to introduce a digital approach to service the growing number of mobile device users; offer discounts tailored to them (as well as incentives for local people); and consider implementing self-service tables which enable customers to order digitally.
To fight against the growing number of pub closures, pubs need to maximise their offerings and diverge from their traditional modes of operation, through the introduction of digital marketing, developing their technology services and offering a more personalised customer experience. After all, if pubs want to lay their claim to future generations, first they’ll need to win over Generation Y.
