Restaurant data analytics: how to turn insights into action

Maintaining a restaurant’s success is a bit like walking a tightrope. Profit margins are so thin that balancing different business needs can feel precarious. Each time something changes—a rise in food costs, a sudden labor shortage, or an unexpected surge in orders—you have to respond quickly to regain balance.

It’s hard to track and manage these factors. But it’s getting easier with the help of restaurant data analytics solutions. In this article, we’ll explore the basics of restaurant data analytics, including:

• What is restaurant data analytics?
• Types of restaurant data
• How to collect restaurant data
• 6 ways to use restaurant data analytics in your business
• How data analytics from Uber Eats can add value to your business

Restaurant data analytics is the process of analyzing all the data you have on your restaurant’s performance and operations in order to gain meaningful insights. By leveraging restaurant data analytics, you can learn from past performance, identify meaningful trends, and make more strategic decisions. This process breaks down into 2 main components:

• Restaurant data is the metrics you track over the course of doing business. Today, this information is largely collected automatically with software tools.
• Restaurant analytics is the process of interpreting that data to identify meaningful trends and takeaways you can use to optimize your business strategy.

Understanding different types of data and how they relate to your goals can guide where to focus your energy and resources. You can group data in many ways, but these are some of the most important categories for restaurant operators to monitor:

Sales data sheds light on the number of purchases customers have made in a given period. Important sales data to track includes:

• Number of orders placed through different sales channels (online, in-person, third-party apps)
• Best-selling and most profitable menu items
• Average value of each order
• Total amount of revenue generated from sales

Customer data reveals who your customers are, what they like about you, and how often they come back. For this type of data, you’ll want to monitor:

• Number of new versus returning customers
• Loyalty program growth and participation
• Online reservation volume
• Customer reviews and ratings

Operations data points to how well your business is run. It can help you identify ways to cut costs, reduce errors, and improve overall efficiency. Key areas you’ll want to pay attention to might include:

• Order data, such as order error instances and order preparation time
• Service data, such as how often your restaurant is available for online ordering relative to your restaurant’s hours of operation
• Inventory data, such as your stock record and budget breakdown
• Labor data, such as scheduling, payroll, and benefits information

Now that technology does much of the work collecting restaurant data analytics, your main job is putting the insights you learn to use. Here are some of the main ways you can use data analytics to improve your business:

Getting your menu right is one of the most important parts of running a successful restaurant. With data analytics, you can see what works well on your menu and where there’s room for opportunity. Some important menu insights you can gain from analytics include:

• Best-selling items. Paying attention to bestsellers can inform inventory needs, influence menu design, and even inspire new offerings based on customer preferences.

  
  

• Most profitable items. If your most popular items involve expensive ingredients, your net profits on those items could still be low. If you know that other items make you higher profits, you can focus a greater portion of your marketing efforts on them and encourage staff to recommend them more.

  
  

• Common substitutions and customizations. If customers almost always ask you to hold the mayo on a particular sandwich, you may want to update your menu so the common substitution becomes the default. If you notice that a frequent substitution increases your costs, you may want to start charging extra for it.

Employees are one of the most expensive parts of running a business—and one of the most crucial ingredients to long-term success. With staffing insights, you can make sure you’re:

• Matching your scheduling to your needs. Tracking how customer traffic ebbs and flows can help you make strategic scheduling decisions. By only scheduling the staff you need, you can manage labor costs while still balancing the customer experience.

  
  

• Making smarter hiring decisions. Staff analytics can shape strategic decisions around hiring and retention. If, for example, your data shows you’re investing a significant amount of resources on recruiting, only to lose staff soon after hiring them, you may want to shift some of that budget toward professional development and retention.

You can’t make an omelet without eggs—and running out of eggs during Sunday brunch could mean lost sales, unhappy customers, and stressed employees. Inventory data analytics confirms that you’re keeping the right amount of food by helping you spot:

• When it’s time to restock. Inventory data tracks which supplies are starting to dwindle while you still have time to order more. Some inventory tracking software includes forecasting features that use past trends to predict when you’ll need more of an item and how much to order.

  
  

• Overuse of key ingredients. If your kitchen staff tends to have a heavy hand when adding ingredients to dishes, you want to know about it. You can improve your training and give staff feedback on how to make important (and costly) ingredients go further.

  
  

• Food waste. Running out of important ingredients is inconvenient, but having to throw out food you never get to use is even worse for your bottom line. Inventory analytics can point to food items that need to be used fast to avoid going bad, and which you should buy less often.

For customers who place off-premises orders with your business, the delivery experience will play an important role in how they feel about your brand. Delivery analytics allows you to:

• Improve delivery time estimates. Providing customers with accurate delivery estimates sets realistic expectations, which can improve their overall experience. Monitoring your food prep times can provide you with information you can use to keep hungry customers in the loop.

  
  

• Refine your delivery menu. If data suggests that delivery customers are less satisfied with certain items than in-person visitors, you can use that information to change up your delivery menu. And if your data reveals that deliveries are an especially lucrative area for your business, you may even want to consider starting a delivery-only virtual restaurant that works from your current kitchen as a way to reach new customers and boost profits.

  
  

• Expand your delivery options. If your POS system reveals that a rising number of customers are placing orders through your own sales channels, you can use that data to make strategic expansions to your delivery infrastructure. For example, with a white-label delivery solution, you can add on-demand delivery to your own website or app without incurring the cost of building your own delivery fleet.

Your restaurant’s reputation hinges on the customer experience. Analytics can provide you with a better understanding of what your customers think and ways to increase their satisfaction. With this type of data, you can:

• Reduce discounts and comped orders. When customers have a negative experience, comping items or providing discounts is a standard practice to smooth things over. But this can become costly. Tracking how often you reimburse customers can uncover causes of and possible solutions to underlying process issues.

  
  

• Improve customer retention. With customer data, you can identify and nurture your loyal customers. Use information about ordering habits to craft personalized recommendations and offers that will keep your regulars coming back again and again.

The restaurant business is unpredictable. But we now have impressive tools that can reduce uncertainty about the future. Software products with data forecasting features use past data to make projections. With data forecasting, restaurants can:

• Improve staffing and inventory management. Data forecasting can predict how busy your restaurant is likely to be at certain times. It can also reveal ordering trends. Together, this information can help you shape schedules and determine inventory needs far before a seasonal rush hits.

  
  

• Make strategic spending decisions. Data forecasting also empowers you to make smarter decisions about spending. If you’re considering a substantial investment—say, in a new physical location or marketing initiative—that’s an easier choice to make if you have an idea of your expected profits for that period. Data forecasting can't promise exact numbers, but it can provide useful estimates.