When the pandemic hit in March, fast-casual chain IHOP Restaurants was better poised than many would have expected.
While dine-in restaurants around the country were scrambling to figure out delivery and take-out options, IHOP was already a couple of months into its IHOP ‘N GO platform, a breakfast to-go program aimed at the growing consumer demand in densely populated city centers.
“Prior to the pandemic, we were already well-prepared to capitalize on the rapid shift to off-premise dining with our IHOP ‘N GO platform, key partnerships with all of the major national delivery service providers, and even with our award-winning packaging, which was designed to ensure that our World Famous buttermilk pancakes would stay hot and fluffy in transit,” says Brad Haley, CMO of IHOP Restaurants.
Still, the company faced the same challenges as other restaurants –concerned consumers that did not want to leave their homes and eat out. The restaurant chain’s Q2 earnings were $748.8 million, down from $873.1 million for the same quarter in 2019, per parent company Dine Brands Global Inc. But the company has been making a comeback and by Q3, revenues were only down 30.2% year-over-year.
The company has been focused on customer experience and driving traffic during non-peak times by offering discounted menu items during IHOPPY Hours, as well as promoting digital ordering for delivery and curbside. Haley will join Brand Innovators’ Consumer Engagement livecast on Dec. 10 and discuss how the QSR brand is engaging consumers.
Haley joined IHOP Restaurants as CMO in 2017, where is charged with driving IHOP’s marketing and culinary strategies, leading the development of omnichannel campaigns, and overseeing the brand’s menu. Prior to joining IHOP, Haley served as CMO for CKE Restaurants where he was responsible for marketing and PR for the more than 3,000 domestic Carl’s Jr. and Hardee’s restaurants.
Brand Innovators caught up with Haley to discuss how IHOP has been adapting to life during a pandemic and what’s on the menu for the restaurant business next year. This interview has been edited for clarity.
How has IHOP been adapting in 2020 when people are often concerned about eating out?
After the start of the pandemic, our teams were able to quickly pivot with the introduction of curbside pick-up at our restaurants. We also quickly streamlined our menu, shifting from large, laminated menus to single-use paper menus and “touchless” menus available via QR codes. And we’ve seen franchisees take an entrepreneurial approach in response to the pandemic, with innovations such as creating ‘parking lot patios’ to offer outdoor dining options for guests.
Obviously, safety and cleanliness are always at the top of our priority list as a brand. So, it’s been critical to clearly communicate all of the ways we continue to keep guests and team members safe with efforts like social distancing, reduced guest touchpoints, safe service practices, and enhanced health and hygiene programs – particularly as guidelines continue to evolve and differ across the country.
How have you been marketing your delivery and pick up options?
Our off-premise business had been a key focus for us in the years leading up to 2020 with initiatives like our customized packaging and our IHOP ‘N GO program to ensure that the quality of our off-premise experience matches what folks would expect when dining with us under our blue roof.
Post-pandemic, we shifted the bulk of our marketing communications to promoting our off-premise options through all of our paid and owned media channels. To make it even more attractive for our guests to order from IHOP to enjoy in the comfort of their own homes, we also worked closely with our delivery partners to make free delivery programs available.
What ways are you investing in media this year? Has it changed in response to consumer behavior?
We’ve really had to pivot our media plans in a couple of ways this year, both of which were driven by the varying and rapidly-changing local dining room restrictions across the country. First, we shifted more of our media spending into geo-targeted, addressable media channels like digital, paid social and search.
Second, we shifted our linear television weight from national to local to provide more flexibility to talk about the kinds of things that were most relevant to guests on a market-by-market basis, depending upon their specific circumstances.
What kinds of new menu items and promotions have you been working on?
When the pandemic started, we initially promoted some of our classic, iconic menu items because our insights work revealed that guests were looking for familiar, comfort foods as they faced the many new stresses in their lives.
We also developed and promoted larger group offerings that are available for off-premise dining, like our Family Feasts, designed to allow guests to enjoy the IHOP food they love with their families in the comfort of their own homes. We actually have a new Holiday Family Feast available right now that comes with a pancake-decorating kit so you can have your own pancake party at home. It makes for a fun, interactive experience, and also encourages social-sharing and the creation of user-generated content.
We’ve also been emphasizing value as guests have had increasing concerns about the state of the economy and their own personal incomes. With the recent launch of our IHOPPY Hour menu, we’re providing guests with a more affordable way to enjoy the classic IHOP dishes they love, more often. Given the current state of the world, we felt it was critical that the IHOPPY Hour menu featured those classic, craveable and comforting IHOP dishes that guests love.
As we move into 2021, we believe that guests will have more of an appetite (no pun intended) for food innovation, so you can expect to see more of the fun menu items that ‘flip expectations,’ as we like to call it, from us soon.
What predictions do you have for the restaurant space in 2021?
I think we’ll see a continued prioritization of off-premise dining experiences on par with on-premise. While we know our guests enjoy coming to IHOP for the communal, social dining experience, we also believe that some guests will continue to prefer enjoying that experience from the comfort of their own homes, even after a vaccine is made available to the general public. So, our focus will remain on creating the best possible experience, wherever that might be. That will likely eventually even translate into changes to the physical restaurants as the kitchens have to support two separate – but potentially fairly equal – distribution channels.
I think the industry will also continue to develop ways to talk to guests in a more personalized manner, to make sure that the message is more relevant to what individual guests truly want and need versus the traditional one-size-fits-all media model.
Finally, I think safety will continue to be a focal point of communications as the industry works to make guests feel comfortable eventually returning to pre-COVID dining habits and behaviors.
