Will Data Analytics Be Crucial To The New Service Sector?
A lot of slow-moving trends have been massively accelerated by the pandemic.
Increasingly, it looks like the same might be true for the use of data analytics in the service sector.
A Rocky Road
It’s been a tough year for restaurants, pubs and bars.
A report issued by the UK’s Economic Observatory noted a 70% fall in restaurant spending in the early months of the pandemic.
The figures are now looking up, with the vaccination campaign driving a welcome summer sales boost. However, continued uncertainty and a reduction in household incomes are likely to depress spending on eating and drinking out in the medium term.
And that’s before brick-and-mortar retails reckon, with the increasing share of business going to the takeaway sector.
As margins become ever tighter, data analytics is becoming even more crucial to businesses large and small.
The ‘New Oil’
In 2017, the Economist noted that “the world’s most valuable resource is no longer oil, but data.” Restaurants bars and clubs are a surprisingly rich well for this new black gold.
Point-of-sale, staff rota systems, inventory systems, review platforms, loyalty schemes and online reservation systems provide a wealth of data from multiple sources.
Qualitative analysis of this data can tell you not only when and where to expect customers, but what items they are likely to order off the menu and what new items might bring them back in the future. Understanding customer profiles also allows businesses to send out tailored deals, filling tables that would otherwise be sitting empty.
However, not all businesses are exploiting this resource.
Restaurants, bars and clubs are old businesses and managers have typically relied on gut feeling and experience to predict market movements.
In 2018, BCG (a US-based business consulting firm) reported that while four in five restaurant brands can access a wealth of data from multiple sources, “only one in five has in place a comprehensive big data strategy”.
This lag is surprising, because the number of third-party providers is growing. Compeat in the US and Tenzo in the UK are both offering cloud-based data analytics platforms that are accessible for smaller businesses.
The service sector has the ability to exploit the data they generate. In an increasingly uncertain market there is a clear imperative to do so. As Elizabeth Norton, Marketing at Tenzo notes, “businesses no longer have the flexibility to wait and see what happens. Having a dedicated analytics system in place allows them to make data-backed decisions and changes on a day to day basis”.
Looking Forward >>
The service sector isn’t going anywhere.
In July 2021, pent-up demand for wining and dining saw a 30% increase in UK bar sales compared to the same period in 2019.
Customers are ready to get out of the house and create new memories. However, there is no guarantee that they will be creating these memories in familiar venues. For established outlets and new challengers alike, the race is on to exploit the well of data under their feet. An old business will have to reach digital maturity fast.
Are you a startup looking to cater to the service sector? Find out more about how Floww can help you drive your business here.
Header Image: via Unsplash. An increasing share of business in the service sector has gone to takeaway services like Deliveroo during this pandemic.