Which trends will shape the restaurant industry in 2019? The evolution of value and delivery, the need to be more data-driven, and consolidation and efficiency will be among the most significant trends, according to Sense360. While some of these trends also impacted the industry in 2018, their breadth, reach, and maturation will keep them at the forefront this year.

Value makes way for differentiation

Value was top-of-mind across the industry last year, when a number of major chains launched value offerings, spent a lot of time talking about value, and used it to drive traffic. While value generally worked to attract traffic, Sense360 founder and CEO Eli Portnoy characterized the strategy as “a race to the bottom.”

“I think in 2019, the brands that are going to grow and are going to thrive are the ones that will find ways of differentiating and attracting customers outside of just value,” he said.

This year, rather than value, expect more differentiation and innovation, whether in the form of new menu items, branding and positioning, or new store experiences. Brands will think more broadly about how to cater to customers beyond value. For instance, Chick-fil-A has stayed the course with a successful strategy based on quality and taste. And Taco Bell hones in on craveability, menu innovation, and limited-time offers.

“Based on what we see in the data, value clearly resonates, but it resonates more strongly with a few types of consumer segments, but it is not the only thing that matters,” Portnoy said.

A more effective approach may be a strategy that broadens the possible base of consumers outside of just value-seekers. For instance, in 2018, White Castle began selling a plant-based Impossible Slider, which helped differentiate the chain and targeted new consumer segments.

“I think the opportunity is—when you start to launch new initiatives, and talk about other reasons to visit you, and try to win over customers in ways other than value—you start expanding your reach,” Portnoy said.

Delivery grows up

Delivery is a must-have for all restaurants, whether that’s a global fast-food chain or an independent bistro. While 2018 was the year delivery went completely mainstream, 2019 will be the year that delivery grows up.

“I think 2019 is the year when companies will get a little bit smarter about their delivery strategy, and they’re going to think hard about the differences between third-party and first-party delivery, and what that means for their business,” Portnoy said. “There’s a massive opportunity, and done well it can be completely accretive to what you’re doing as a business.”

At the same time, executives will start to push back on the narrative that 3rd Party delivery is a no lose proposition.

“I think we’ll see a lot more thoughtfulness about 3rd party delivery. It can clearly be a good customer acquisition strategy and a good way to be front and center during a customer need state, but executives will start to question what it does to their business over the long run and what it means to lose their direct customer connection,” he said.

Consolidation spurs efficiency

It’s a refrain familiar to nearly all restaurant operators: the market is saturated, and in order to grow, brands must steal share from one another. The old ways of growing by opening new units or dayparts, or by relying on the fact that the market itself is growing, are no longer enough.

More potential outcomes of a highly competitive industry include private-equity firms buying additional chains and some brands closing shop. Those that survive will quickly need to figure out how to thrive. Operators will get even more efficient and shrewd with how they invest.

“In order to stay relevant and thrive in 2019, executives are going to have to make the best use of every dollar they spend, every ounce of effort, every initiative they take on—and the only way to do that correctly and well, and have a high success rate, is to use data to inform those decisions,” Portnoy said.

“A few chains will make the shortsighted choice to spend less on data and intelligence, and instead pour that money directly into advertising or tactical initiatives. While the extra ads may attract a few more customers in the short-term, they will run the risk of missing the mark with their broader marketing spend and strategy. It’s a bit like firing a cannon, shooting 5 or 6 cannonballs doesn’t matter if you aren’t pointed at the right target.” Portnoy said.

Big brands aren’t the only ones that will need to harness the power of data. Smaller chains and independent operators will also have to invest to stay abreast of larger competitors’ data-based decisions.

“The more sophisticated brands will be able to do more with [data], and the less sophisticated ones are going to need to make it a higher priority to keep up with the bigger ones,” Portnoy said.

Overall, 2019, like previous years, will be challenging and, at times, unpredictable. But based on Sense360’s expert knowledge, these predictions can help make it a successful year for your business.