By Brittain Brown
Restaurants continue to struggle for survival across the country, with many establishments facing bankruptcy closures. As eating out continues to get more expensive, the holiday season is a pivotal time for the restaurant industry to boost sales. In a time of economic uncertainty, it’s essential for restaurant operators to strategically deploy their marketing budgets and optimize sales strategies early to incentivize customers and increase revenue during this busy period.
Understanding consumer behaviour in 2024
A recent survey found that 76 per cent of Canadians anticipate they will spend less on dining out this holiday season compared to the previous year. Despite changing habits driven by financial pressures, 28 per cent of Canadians intend to spend at least $200 on gift cards this season, marking a significant 40 per cent increase compared to 2023. Canadians also plan to spend about $200 on dining over the holidays, on average. This data highlights the immense potential of targeted promotional strategies to capture both consumer interest and allocated holiday budgets.
The holiday season is a crucial time for merchants, and while customers may be tightening their belts, they are still spending. Shoppers are likely to hunt for deals more aggressively than before, and restaurant operators should adjust their strategies accordingly.
Why gift cards matter
Despite economic challenges like inflation and rising costs, gift card sales continue to grow, even among budget-conscious consumers. In fact, according to data, 38 per cent of annual gift card sales happen between Black Friday and Christmas Eve, making this period the perfect opportunity for businesses to maximize their gift card programs and grow revenue during the holiday season.
When asked what type of gift card one would most like to receive as a gift, 43 per cent of Canadians reported they would prefer a restaurant gift card. Restaurant gift cards have only continued to increase in popularity, offering dual advantages for restaurateurs: they provide immediate cash flow and enhance the likelihood of future dining experiences.
Digital gift cards provide a quick and convenient solution for consumers looking for a thoughtful gift, particularly in the final days of the holiday season. By offering digital gift cards, restaurants can effectively capture last-minute shoppers. Ensuring that a restaurant’s website is optimized for all devices is essential. It should prominently showcase gift card purchasing options, ultimately enhancing the user experience.
Additionally, incentivizing gift card purchases through promotions, such as offering a free appetizer or dessert with the purchase of a gift card over a certain amount, can help boost sales. An alternative promotion could involve offering a bonus gift card of a smaller value. These incentives encourage gift card recipients to visit a restaurant, leading to potentially greater spending and enhanced customer loyalty.
The value of promotions and loyalty
Beyond immediate sales, building community connections and customer loyalty through a comprehensive gift card strategy can help to differentiate a brand. Compared to last holiday season, 39 per cent of Canadians are seeking dining options that offer promotions more often, underscoring a desire to save where possible and demonstrating the value of having a loyalty and promotional framework in place.
Loyalty programs will help merchants retain and attract customers. Offering exclusive holiday rewards or points for purchases is an effective strategy to encourage repeat business, especially during this peak spending season, when consumers are more likely to return to brands that provide value. Launching timely promotions aligned with key shopping moments, like limited-time holiday offers can drive sales and foster customer loyalty. Integrating promotions, such as discounts on popular menu items, into marketing campaigns during busy shopping periods can help enhance convenience, loyalty, and flexibility.
Flexible payment options such as buy now, pay later (BNPL) will continue to attract deal-conscious shoppers. Offering payment flexibility can help merchants appeal to customers managing their budgets, driving more sales by allowing consumers to spread their spending over time.
Adjusting strategies based on evolving customer needs
When facing economic challenges, it is imperative for restaurant operators to continuously realign their strategies with consumer habits and preferences. A thoughtfully designed gift card and loyalty strategy can be a pivotal tool, delivering both financial gains and enriched customer engagement.
With the holiday season around the corner, restaurant operators that launch holiday promotions early will position their business to capture the attention of those looking to secure deals in advance. As restaurants gear up for one of the busiest times of the year, operators that take proactive measures now will ensure a productive holiday season and lay the groundwork for future success.
Since joining Givex (a Shift4 company) in 2003, Brittain Brown has held various managerial roles in National Accounts and Operations. As President, Brown has driven Givex’s international expansion and overseen the successful acquisition of new additions to the Givex family of companies. His leadership and passion have been instrumental in the company’s explosive growth.
