A Cornell Hospitality Quarterly study found that 75% of customers who visit a restaurant are undecided on what to order. This is an opportunity for equipping service personnel at restaurants with data driven intelligence enabling them to recommend the right combination of products to guests. Market basket analysis (MBA) can play a big role in unearthing intelligence on product mix from transactions data.
MBA entails looking at close relationships between products which are bought together in transactions. These techniques have been used, predominantly, in a retail segment. However these techniques can also be well adapted to the hospitality industry. Unlike the retail segment, where ostensibly unrelated products can coexist in a transaction, transactions in the hospitality industry tend to be more structured. This structure is an inherent property of how products are ordered in a restaurant i.e following a course. So typically a customer might start off with an appetizer or soup, followed by entrée, main course and then a dessert. MBA would help a firm maximise profitability by understanding:
- What menu items like appetizer or soup would most likely be ordered on a particular day/time of day /season by a specific customer segment
- Having ordered a specific menu item like appetizer or soup, what is the most likely entrée, main course, side dish, beverage or dessert that would be ordered
- What correlation, if any, exists between sales trends and menu item promotions
The value an MBA analysis would bring to the proverbial table is:
- Providing intelligence on menu recommendations inferred from dining patterns.
- Identifying the right products to be bundled to create combo offers.
- Measuring the impact of seasonal and combo offers on overall sales
The possibilities that MBA offer are immense and have proved to be effective in increasing sales.
To know more about MBA driven Menu engineering and a free demo please contact
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