Black Angus Steakhouse Enjoys Growth with E-Commerce

By Abigail A. Lorden, Editor-in-Chief | May 10, 2012

Business for Black Angus Steakhouse (www.blackangus.com) looked a bit like a bucking bronco over the past decade, with its fair share of recession-induced ups and downs. Its parent company filed for Chapter 11 bankruptcy protection in 2005, and again in January 2009. By March of that year, the company emerged from bankruptcy protection with a growth roadmap in place.

After performing extensive research on the Black Angus brand and what guests liked about it, decision-makers had an idea: give guests another reason to visit by taking advantage of the expansive bar area already in place in many of their restaurants.

In September 2009, the first BullsEye Bar opened, a new sports bar concept tethered to existing Black Angus Steakhouses, expanding appeal to both existing guests, and generating interest from a younger demographic. Today, 28 of the 45 Black Angus locations have BullsEye Bars, and all new Black Angus Steakhouses will have the sports bar concept included. Results speak for themselves: the company just came off its tenth consecutive quarter of same-store sales growth.

Technology, and in particular an investment in e-commerce initiatives, has been an important part of the company’s turnaround. Hospitality Technology (HT) talks to CEO Merry Taylor about the new sports bar concept, their e-commerce efforts, and why OpenTable is a particularly good partner for Black Angus.


HT: First, talk a little about your background and how you came to have such a passion for the role that e-commerce can play in restaurants.


Taylor:
I had been in the restaurant business my entire professional career, and in 1998 I had been here at Black Angus for about 11 years. The e-commerce industry was burgeoning at that time and I was very compelled to understand, from a marketing perspective, how consumers were going to use the Internet in making their shopping decisions. Coming from an industry that is traditionally low-tech, particularly full-service restaurants, I decided to join a gourmet [food preparation and delivery service] called Cookexpress.com. It was on the forefront as the e-commerce industry was just growing up. We imploded when all .com grocers imploded.

Then, I founded an educational start-up that was a consumer marketing initiative. After doing that, I was compelled by the role that technology could play in people’s lives and I joined the Tech Museum of Innovation (www.thetech.org)  in San Jose and was president there for a number of years. Throughout that whole time, I became much more linked in to how you could use technology to market and sell a product, and how consumers would shop, research, and be educated through technology.

When I came back to the restaurant business [and Black Angus] in 2008, I came back with a different point of view. I think the industry is changing as well, becoming more technologically oriented, and I think that social networking is responsible for that. E-commerce didn’t really drive the restaurant business into greater technological capability; but social networking has created an understanding of the power that technology can have, and social networking may well be the wave that causes restaurants to embrace technology in a way that the industry hasn’t done before.

HT:
How would you describe Black Angus’ approach to technology, and how it’s been a part of the new BullsEye Bar concept?

Taylor: We want to remain high-touch and provide guests with the best hospitality possible, and technology enables us to do that in many ways. We’ve been leveraging OpenTable (www.opentable.com) to reach guests, and get to know them through their profiles so we can more readily accommodate them. Through Yelp (www.yelp.com) we provide the most up-to date information to guests trying to decide where to eat.

Once they’re dining with us, Buzztime (www.getbuzztimetoday.com) gives guests another means for engagement. Free WiFi is available in our BullsEye Bars for guests to play fantasy sports; it’s also a convenience for anyone who wants to go online. And our new website, which we launched last year, has been optimized so that it’s driving double the traffic than the former one did. We’ve enhanced our navigation systems, and content is keeping visitors engaged for much longer. Guests can make restaurant reservations directly from our website 24/7, which provides a tremendous convenience.

HT: You’ve certainly focused on the power of e-commerce. Let’s talk about OpenTable and how you’re leveraging that tool, particularly given its contested place among restaurant operators.


Taylor: OpenTable provides a convenience to our guest; they can make a reservation at any time from a computer, mobile phone, on our website, or on the OpenTable site. OpenTable’s site provides a full page of information for each of our restaurants, including current promotions. The pages are dynamic and can be updated when we have news for each location.

We believe that our guest base has grown because of the convenience that OpenTable offers and the additional exposure it generates. Moreover, it’s improved the in-restaurant experience: our ability to greet guests and know their preferences via OpenTable, as well as the ability to manage flow through the restaurant. This all enhances the guest experience and increases the likelihood that they’ll return.

HT: Do you see working with OpenTable, and taking reservations, as a competitive differentiator for your business?
 
Taylor: In fine dining, OpenTable may be seen as the ante to get into the game. In casual dining, however, there aren’t nearly as many restaurants that are partners with OpenTable. One reason for that is the difficulty reservations bring to managing the flow. OpenTable has a fairly robust table management system that we leverage, along with internal tools we’ve developed, that enables us to manage even with reservations.

So yes, we do see it as a competitive advantage that we take reservations, and we want to make it as easy as possible to make those reservations. Lots of OpenTable users make reservations at 2 and 3 o’clock in the morning. Maybe they wouldn’t have found us if we weren’t there.

HT: Why do you think some restaurants are reluctant to use Open Table? It’s even been described as a ‘necessary evil’ by some.

Taylor: I don’t think all restaurants fully appreciate all of the benefits that OpenTable provides. They see the guests come in and think that they would come anyway, without the OpenTable reservation. That may be the case in some instances, but as the demand for convenience and more customized service becomes greater, so does the incremental growth that systems like OpenTable can provide; and our OpenTable business is growing.  

HT: You’ve also used Yelp very successfully, having increased your website page views by 50 percent. Can you talk a bit about that partnership?

Taylor: We partnered with Yelp last August, and work with them to customize the pages for each of our restaurants, with photographs, deals, etc. In doing so, we’ve not only increased our pageviews, but also quadrupled click-throughs to our website and doubled our mobile page views. Next, we’re testing advertising with Yelp in three of our restaurants with the goal of increasing awareness and visits among the growing population of Yelp users.

HT: Once the guest is in your restaurant, technology engages them in several ways: free WiFi, flatscreen TVs, and NTN Buzztime gaming. Are there any concerns that these additional draws may actually slow down table-turns?

Taylor: At the bar we want to encourage people to linger, order another drink, maybe some sliders. We’re much less worried about turning tables than we are about creating an engaging experience. Buzztime has a loyal following of thousands of members, so it expands our guest base and also provides another reason for existing guests to visit.

Wi-Fi was added as one of the fundamental components of the BullsEye Bar, which, more so than the normal dining room, is a gathering place. A guest may come in and be waiting for a business associate or be on email. It gives guests the chance to play fantasy sports and also makes BullsEye Bar an appropriate destination if a guest wants to have a working lunch.

HT: You’ve also started giving managers iPads. How are the tablets being used?


Taylor: Currently they are used to engage guests while they’re at the restaurant, to sign up for the Prime Club e-mail rewards program, for example. The manager might walk around and say, “Are you a member and would you like to sign up?” We use Fishbowl (www.fishbowl.com) for our e-marketing and having the iPad provides that immediacy for signing up.

We also had our own brackets for the NCAA playoffs. If a guest connects with us via Facebook or the Prime Club, we could send them a message saying, “Come into the restaurant and ask the manager for the iPad to build your own bracket.”

HT:
How important has technology been to the company’s turn-around?

Taylor: Very important, especially the online partnerships. We just finished our tenth consecutive quarter of same store sales growth. That hasn’t been true for many others in the casual dining segment. Our partnerships have been a part of that. The growth of our own Prime Club has virtually doubled in that time as well. That’s totally an online initiative in that we only communicate with those guests via email.

In the BullsEye Bar initiative, we made sure the TVs are state-of-the-art high-def; when you add in the free WiFi, the use of iPads, Buzztime…it has a halo effect that says the whole concept is contemporary. We’ve worked very hard to contemporize the food, the uniforms, etc. Everything in the brand has to signal that you’re keeping pace with the times.

The success of BullsEye Bar has been two-fold: we’re increasing the frequency of our existing guests by giving them another reason to visit — dinner on Saturday night with family, and then Monday night for football. It has also attracted new guests who are slightly younger and slightly more male than our traditional demographic.

HT: What’s next for Black Angus, and its technology roadmap?


Taylor: We’re constantly looking at what the next evolution is for us; even the next entirely new thing. Most immediately, very short-term, we’re looking at how to effectively increase the immediacy of our mobile couponing efforts. Right now we do accept mobile coupons, but they’re the same ones that our Prime Club members may get and they have a long expiration time frame. We haven’t done a lot with immediate mobile couponing — for example, to pick a slow time and give the consumer an immediate offer to come that night or in the next couple of days. We’re figuring out how that
works for us.

Looking longer term, we’re excited about our growth over the next few years. We currently have letters of intent for four new locations. As our Prime Club e-mail membership grows (we have about half a million members currently) we can gain more meaningful insights about our guests and what they’re looking for. The same is true with OpenTable and Yelp. As these vehicles grow and generate a larger share of business, we will use them to gain more information about our guests and will create actionable plans around
those insights.


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