Exploding use of social media and online marketing are forcing businesses to invest further in technology to stay afloat. Today more than 52% of Europeans use social media regularly, while 38% of us use at least one form of social media on a daily basis (from Statista). This represents a daily audience in Europe alone of approximately 300 million people – a number which continues to grow daily, and which does not even include overseas tourists.
In the restaurant industry in particular, Instagram is king. This may be attributable to the fact that the overwhelming majority of our purchasing decisions are influenced by a product’s visual appearance – and would explain why 75% of Instagram users will visit a brand's website after seeing an advertising post. Some restaurants have also reported increases in daily customer visits by as much as 5% through the use of influencer marketing.
While it may not seem like a life-changing figure, every little counts in the hospitality industry which sees its margins constantly squeezed, and which is more sensitive to economic conditions than most other sectors. The myth that most restaurants close in their first year has been debunked through analysis of US Bureau of Labour statistics non-public census data, but the research did also confirm that the risks of going down are significantly more pronounced for restaurants owners with small teams (5 or less employees). In the UK, the current instability of the European economic situation means that more restaurants than ever before are at risk of bankruptcy. 2017 even saw some of the country's biggest chains being hit by increasingly challenging market conditions, with nearly 1,000 insolvencies across the country.
To add to this, online reviews have been found to make a bigger difference in the restaurant industry than any other. A pair of Berkeley researchers revealed that a half-star difference on a Yelp review rating can swing restaurant business by as much as 27%. While they noted that this is an incentive for restaurant owners to produce fake reviews, their analysis also revealed that fake reviews were not common practice. There will of course be exceptions, as demonstrated by the spectacular example of a Londoner turning his shed into the best rated restaurant on TripAdvisor.
For those serious about running successful businesses however, online review platforms and social media offer a range of opportunities which can and should be leveraged. Our ambition, starting with the Radishnow app, is to create a suite of tools designed to help both restauranteurs and food consumers by: i) giving chefs and restaurant owners access to technology and data-driven knowledge they require for informed and effective decision making; and ii) helping people finding the best food and sharing feedback which can be put to constructive use.