Red Lobster serves up app-based loyalty rewards

Brief:

Red Lobster, the seafood chain with more than 700 restaurants in the U.S. and Canada, introduced an app-based loyalty program that lets customers earn points every time they eat at its restaurants. The My Red Lobster Rewards app tracks reward points, which can be accumulated by scanning a QR code on printed receipts, per a statement.
The program awards one point for every dollar spent at Red Lobster. After earning 125 points, customers receive a reward among a choice of three menu items during a future restaurant visit. The program offers 75 free bonus points to sign up, which means users can get their first reward after spending $50.
The app also allows customers to put their names on the wait list at a local Red Lobster restaurant, where available. The restaurant chain will add take-out ordering to the app soon. The free app is available for iOS and Android.

Insight:

App-based loyalty programs are becoming more common in the restaurant industry, which has confronted weak customer traffic. Mobile loyalty programs are designed to gather more data about customer preferences over time. That information can be used to tailor one-to-one marketing efforts with specialized offers to urge program members to return to a restaurant.

My Red Lobster Rewards is the first mobile app for the restaurant chain, which tested the program in Colorado for a year before expanding the pilot program to Arizona and Wyoming and then deciding on a nationwide rollout, Nation’s Restaurant News reported. Red Lobster is building on other marketing efforts to foster loyalty, which includes an e-mail club of 4 million members.

Three-quarters of Red Lobster customers who downloaded the app have used it to earn points, the chain’s tests found. Users have scanned three receipts on average, while more than a third of members who redeemed a reward have done so at least twice, the chain told Nation’s Restaurant News. The company has seen an increase in sales among the program’s members.

The restaurant industry experienced a same-store sales decline of 2.2% in Q3 2017 from a year earlier, while same-store traffic fell 4.1%. The sales and traffic rates were the second worst in more than five years, according to data from researcher Black Box Intelligence cited by NRN.