Consumer Insights: Something More

Consumers’ needs go deeper than to be fed; sometimes they need a dining experience. Why?

By Scott Hume, Editor-in-Chief -- Restaurants & Institutions, 2/1/2008

If a steak is overcooked, chicken underseasoned or pasta more chewy than toothsome, a guest’s evaluation is likely to be harsh. Yet even when ingredients are top-notch and preparations are just right, customers can be left wanting more. That gap is what separates eating from dining, a meal from an experience.

And experiences are what many diners want in return for the time and money they spend in a restaurant. Only 15.7% of respondents to R&I’s 2007 New American Diner Study strongly agreed with the statement, "When I eat out for dinner, I expect an ‘experience.’" Yet in the 2008 study, 44.3% of adults strongly agree that "Eating out for dinner is as much about the experience as about the food."

Why do consumers seek experiences? Economist Joe Pine says the answer, in part, is that we have all the tangible goods and services we need (see "Dinner/Theater"). Experiences, he says, are memories, the most personal possessions of all. Goods and services have been largely commoditized; experiences are unique.

"Dining out has become a form of entertainment. That’s the way consumers look at it, and it’s been prevalent for five years at least," says Bob Amick, founder and managing partner of Atlanta-based Concentrics Restaurants. Following the debut of ONE.midtown kitchen in 2002, Amick opened a string of Atlanta restaurants, including TWO urban licks, Trois and the new-in-2007 TAP.

"I think it’s a phenomenon for a variety of reasons," Amick says. "The whole glorification of dining and eating as a result of Food Network and all the media coverage of dining has put restaurants on a very different pedestal than they used to be on."

That pedestal and diners’ expectations about the food and experiences they seek are higher than in the past. That’s a good thing, Amick says, because it rewards excellence and punishes purveyors of overcooked steaks.

"For some time now, we’ve all been saying that having good food is not enough," he says. "It’s certainly the thing you have to have first, because if you have other things but not good food, then you fall flat as well. But when people go out to dine, they go out to be entertained.What does that mean? It means they want to go into a great space with great energy. They want to be visually excited."

That’s good, but it’s also a challenge. Diners’ desire for energized, exciting spaces has driven restaurateurs to develop larger—and thus more costly—restaurants. It’s the trade-off for dining out becoming a commonplace occurrence rather than a special event.

"The old dining-out market was much more serious ... that’s changed," Amick says. "[Now,] they come in and they’re knowledgeable; they’re looking for a great product, a new wine or a special cocktail. They see it on television; they read about it in magazines and newspapers.

"It’s what they expect, and if you don’t deliver it, you [as a restaurateur] will be disappointed. You cannot be one-dimensional anymore."

Maryville, Tenn.-based Ruby Tuesday is completing a two-year enhancement of its dining experience that has included revising and upgrading the menu as well as investing in new china, glassware and flatware, new crew uniforms and décor improvements. In a January quarterly conference call with analysts, Chairman-President-CEO Sandy Beall conceded that Ruby Tuesday’s brand-enhancement initiative may have had the "worst timing in the world" given the casual-dining segment’s difficulties.

But he argued that the results were "uncompromising freshness," better food and better service by hospitality-focused teams. "[It’s] a better place, updated, more relevant, not a frozen bar and grill stuck in the ’80s," he said.

Cheating on diners’ experience is not the wisest response in a harsh economy. "When I go out, I like to be wowed, too," says Amick. "At the end of the day, the meal’s got to be great, but there’s nothing wrong in expecting more."

Comme Ci, Comme Ça

Building on the success of his two other Los Angeles restaurants—Sona and Boule—Chef-owner David Myers last fall opened comme Ça. He says he developed the restaurant not because he wanted to create a different menu or to provide his customers a lower-price option but because he wanted to offer a different experience.

With a $95 six-course degustation menu ($169 for nine courses), Sona is an unabashedly high-end restaurant, and "there always will be a market for restaurants of that quality," Myers says. But consumers also like more-casual experiences, and comme Ça is meeting that interest, he says. Myers explains: "We didn’t begin by saying, ‘Let’s do something more casual.’ We started with the experience. We’re creating a very authentic French brasserie experience, but with the very highest quality, of course."

Entrées at 120-seat comme Ça are priced from $22 to $28 and include sole meunière with white-wine sauce, celery-root purée and Vichy carrots, and duck confit with braised red cabbage and spaetzle.

Consumers’ taste in food has changed less over the past few years than has what they want and expect from the dining experience, says Myers. "There’s no question consumers want high quality and are willing to pay for it," he says. "But they don’t want elegance in the old style; they don’t want to dine in Versailles. We’re in a whole different era, so our music, our ambience, has to change and align with a modern lifestyle that is chic and sophisticated."

Customers choose to dine at Sona or comme Ça for the same reason that they may prefer a boutique hotel to a lodging chain: "Image, image, image—it’s affordable luxury and you want to be part of it," Myers says. "People want more experience. [Success] is in how well you deliver it."

Dinner/Theater

In 1999, Joe Pine and Jim Gilmore revolutionized thinking about consumer marketing and created a valuable and much-repeated phrase when they published "The Experience Economy" (Harvard Business School Press). Their thesis was that experiences are an economic offering distinct from services and goods.

The 20th century’s service economy has given way, they argue, to a new structural model in which, as the book’s subtitle explains, "work is theater and every business a stage." Goods are the props and services are the stage on which companies engage customers in a personal way that creates the experiences that consumers most highly value.

Last year, Pine and Gilmore returned with "Authenticity: What Consumers Really Want" (Harvard Business School Press). They refined their thesis with the argument that, as Pine says, "as we shift into an experience economy and life becomes a paid-for experience, people question what is real and what is not." He continues: "Authenticity is becoming the new consumer sensibility, the new quality, if you will. The No. 1 imperative for companies is to render authenticity and to get consumers to perceive [companies’] products as being authentic."

Why do consumers value authentic experiences above goods and services? The answer can be put in the form of another question: What do you give a culture that has everything? "For most people in the United States, our housing and security needs are met," says Pine. "And those houses are filled with most everything we might want. Therefore, our needs tend to gravitate to a higher level."

That’s the supply side. The demand side is defined by how much we value what free time we have. "We’re looking for places to spend that time that are going to engage us, that we find compelling and that often give meaning to our lives."

Pine’s advice to restaurateurs: Differentiate the experience you offer from those consumers get elsewhere. "Ubiquity is the death knell for authenticity," he says. But that doesn’t mean chains aren’t invited to the party. Starbucks "manages its authenticity as well as any company" by making each of its coffeehouses a little different so that each has its own personality and yields a distinct experience.

"Also, restaurants need to understand that every experience is themed and every restaurant is themed, even if it isn’t a ‘theme restaurant’ like Rainforest Cafe or ESPN Zone," says Pine. "Every guest in every restaurant is going to walk away with a set of impressions, and those impressions comprise a theme. What you need to decide is what your theme is and how you’re going to exemplify it so that all elements harmonize and are the set of impressions you want to create and don’t just come off haphazardly."