May 20th, 2020

Location Data is Essential for Top QSR's Covid-19 Reopen Plan

Business owners: brace yourselves. As traumatic as it was to close your doors for these past couple of months, reopening them is going to be just as tough.

For one, the COVID-19 pandemic is far from over and you will need to adapt to meet local restrictions and safeguard your staff and customers. If you run a retail store, that means managing capacity, deploying contactless payment, training your staff on new procedures, and securing adequate supplies of masks and gloves for them to do their job as safely as possible. If you run a restaurant, you might need to add space between tables, reduce menu items, and optimize curbside pickup and delivery options. According to a recent study from Narvar and Forrester, nearly 60% of retailers in the U.S. expect that it will take three months to more than a year for shopping activity to go back to normal.

That is if there's such a thing as 'normal' anymore. While you were closed for business, your customers shopped online. They cooked more meals at home and ordered take-out from your competitors. Many lost their jobs and are looking to the future with anxiety and much less confidence. The prospect of a second and third wave of infections isn't helping either. Your customers' shopping habits have been reshaped by the crisis and you shouldn't anticipate that they'll return to their old ways. 

McKinsey recently surveyed consumers in China (where the economy in hard-hit areas started to reopen in early April), looking for clues on what to expect in the US over the coming weeks. Their recommendations to stabilize the supply chain, manage cash, develop digital capabilities, and streamline operations are spot on, and we encourage you to take a look. But none of these recommendations are possible if you don't know what the realities on the ground are.

That's where up-to-date market-by-market geolocation data comes in. Yes, there's much uncertainty in the market today, and it's disheartening to have to rebuild so much, but for proactive brands, it's also a big opportunity to use high-quality data to ramp up marketing and operations more efficiently than the competition.

We recently partnered with a top quick-service restaurant (QSR) brand to plan its reopening strategy and found vast differences in the guidelines that restaurants received from their local health departments depending on where exactly those stores were located. Reopening guidance from the CDC is a good start, but states, counties, and city councils are issuing their own set of rules too, and ignoring them could have disastrous ramifications up and down your supply chain.

We examined foot traffic (using opt-in and anonymous mobile device data) at and around our partner’s QSR locations around the country to understand what drove early success, and found that much of it was tied to the reopening of nearby businesses. Obviously, if people are not commuting to work at the moment and you have a restaurant that's located near a highway, your breakfast business is likely to suffer. You might need to shift resources to different parts of the day or temporarily change your working hours at that location. Similarly, if your restaurant depends on mall or airport traffic to attract customers and they're closed or operating at half capacity for the next couple of months, you'll need to plan accordingly.

It's difficult enough to address these challenges for a single location, but when you need to account for hundreds or thousands of locations with scattered reopening schedules, it's an entirely different ball game. Speaking of ball games, will the MLB season really start on the Fourth of July this year, and will fans flock to games with the same enthusiasm in, say, Washington and Houston? What happens if schools and colleges (like campuses in the California State University system, for instance) remain closed in the fall? The repercussions for your QSRs at those locations will be dramatic.

Overall, we found that trade areas with a household-to-reopened-business ratio in excess of 40:1 are performing particularly well, especially when one of those businesses is a hospital—after all, hospitals stayed open throughout the crisis and healthcare workers need to eat too. And by plotting competitors on the map and analyzing their respective foot traffic, we were able to anticipate performance and inform crucial staffing and restocking decisions at a very granular level, down to a single restaurant.

On the marketing front, we analyzed the demographic, psychographic, and behavioral characteristics of local customers and prospects for each QSR location, and began tracking important data points—like lifestyle choices, channel preferences, and purchase intent—over time. This is probably the most important outcome of this client project, and one with benefits well beyond the most immediate recovery. With that new level of data intelligence, our QSR partner has already identified promising audience segments for upcoming media campaigns and optimized geofencing areas to deliver those campaigns.

This is not to say that the slate has been wiped completely clean and that your high-value customers won't return. Many will, especially if you've kept in touch and nurtured their loyalty. But the world has changed, and your customers too. With budgets under pressure, it's more important than ever for you to allocate precious marketing dollars to where they offer the best return. While you should most definitely stay engaged with the customers that carried you during the crisis, you should also seize this opportunity to reach out to new markets, and invest in the right tools to add agility to your operations and keep pace with the inevitable changes ahead.

To learn more about how Neustar's hyper-local data solutions can help with your reopen strategy, click here.


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