It's hard to argue with free dinner
It's hard to argue with free dinner
Why "free food" is still such a good marketing tactic
Reservations platform Resy launched its newest campaign today, and it’s relying on an age-old strategy to get diners in the door at 25 restaurants across six cities: free food.
Resy, which is owned by American Express, is covering tabs on selected nights up to $99 per person starting August 9. (Reservations drop each Monday in August; Resy has many more details including a list of participants.) The restaurants aren’t impossible-to-book hot spots, either. They’re loved-but-not-new restaurants that probably exist just outside the spotlight and away from the new-restaurant buzz that fills dining rooms.
It’s a reminder that new tech and new ideas — the type that I love covering in this newsletter — can offer fantastic ways to promote business, but sometimes it’s best to stick with the tried, tested, and sure-to-please.
We love free stuff.
We just do. Early in my journalism career, I subsisted on restaurant openings and other press events full of passed “heavy hors d’oeuvres.” My fellow underpaid friends and I would cluster near the door to the kitchen during these events, ready to snag snacks that would become free dinner; I will never, ever forget how much competition we faced from other attendees who (forgive the generalizing) probably could afford to actually dine at the restaurant when it opened.
My own formative memories aside, we can probably agree that free food is a thing. You’ve probably enjoyed a free sample at the grocery store even if you weren’t hungry; I’ve certainly graciously accepted freebies from restaurants I frequent from time to time. It feels good!
But “free” can also be a fraught experience. “Research shows getting something for free is so fun it can make you forget to do the math,” proclaimed an Inc. headline from 2017. People perceive the benefits from free things as higher, without doing any real analysis. (This info was shared in the context of making more expensive purchases, not accepting a free restaurant meal during a lighthearted summer promotion, but I digress.)
Years ago, one writer for Refinery29 went hunting for an evolutionary explanation to our love of free food. Maybe it’s ingrained behavior honed from millions of years of human experience?
Nah, probably not. “Almost every human culture studied by anthropologists has an elaborate set of rules about how food is divided, which means that people never grab food, but instead set about sharing it,” one anthropology professor told the writer.
In fact, our love for free food is likely best explained by simple economics and… capitalism.
“I think it has to do with the way the idea of ‘free’ has been socialized and the notions of capitalism that give value to something that’s otherwise assigned a monetary cost,” a second anthropology professor said.
It’s nuanced, just like everything else.
Plenty of experts in the restaurant loyalty space are probably rolling their eyes as they read this August Tuesday newsletter. (Hi, experts!) For years, the next big thing in restaurant loyalty — from large chains to small independents — has been intentionally moving away from the blanket free- and discounted-stuff promos. Discounts do not equal loyalty, proclaimed a headline in this very newsletter last fall.
“Historically, people thought that the only way to make consumers care about loyalty more was to give them more of a discount — that's wrong,” Thanx CEO Zach Goldstein told me at the time. His company has spent years honing loyalty offerings that aren’t discounts for restaurant partners.
But still, this thoughtful explanation doesn’t address the undeniable happiness that free stuff creates. My evidence is anecdotal, but I’ve collected it firsthand.
All of this free food probably isn’t sustainable.
Remember the uproar when Starbucks revamped its own loyalty program? When the coffee giant made it harder to earn free drinks, customers got pretty angry. Before that, Dunkin’ did the same thing to its loyalty program to predictably similar results.
A pair of business school professors examined the phenomenon for Fortune, and attributed the customer rage to something called “loss aversion,” meaning that people perceive something they lose as a bigger deal than something equivalent that they gain. In Starbucks’ case, “This extra pain leads to more complaints from those hurt and little praise from those benefiting,” they write.
Or maybe it is?
Blackbird, the just-launched restaurant loyalty program that I somehow keep managing to write about, recently shared that it will comp dinner for one party at one of its partner restaurants every single night in perpetuity. Blackbird app users need only “tap in” at a restaurant to qualify. Blackbird’s goal, like Resy’s, is different from more traditional restaurant loyalty. In both cases, the tech platforms are encouraging diners to use their apps to dine out in exchange for a treat.
Maybe it’s not so much the free stuff as it is the marketing on top of free stuff. Some research I read suggested that a free offering makes a consumer feel a need to reciprocate on the generosity — using an app, revisiting a restaurant, buying a third daily coffee drink you probably don’t need.
Neither of the latest free dinner offerings are convoluted. Blackbird promoted its permanent offering on Instagram as “here’s how to get free food in NYC restaurants.”
A press release for the Resy campaign explains it’s running the monthlong campaign “to help Gen Z and Millennial diners discover and try new-to-them local restaurants and to support small businesses where they live.”
Honestly, the freebies are hard to argue with — no matter the reason.
What else?
Grubhub parent Just Eat Takeaway did better than expected in the first half of the year. Still, its CEO offered some real talk: “Food delivery needs to grow up and needs to generate profits,” Jitse Groen said. “There was a time when money was free and we could all invest in the growth of our business, that time is now behind us." Also, Grubhub is still for sale but with no guarantee it’ll find a buyer.
Sweetgreen’s robotic store location had a better first month than any other Sweetgreen location. I was admittedly skeptical of the high hopes Sweetgreen’s CEO Jonathan Neman placed on these stores, but in its first month, the store’s operating margin was 26 percent, “significantly” higher than early performance at other stores. Otherwise, the salad chain had a per-store operating margin of about 20 percent in the second quarter. Neman has previously said that all stores will be automated in five years.
If you’re waiting for the robots to take over at Chipotle, you’ve got another 12 to 18 months to go. That’s according to CEO Brian Niccol, who also told analysts, “It’s a top priority to figure out how we get this thing into a restaurant sooner rather than later.”
DoorDash opened another location of DoorDash Kitchens, the company’s own virtual food hall, in San Jose, Calif. It features a handful of concepts available for ordering via kiosk and QR codes at tables.
Pizza ordering app Slice is hiring a NYC-based pizza influencer, and compensation for the salaried role could stretch into six figures.
A London fine dining restaurant introduced a minimum spend for service — and it’s charging solo diners double for their meals. The restaurant’s defense? Since receiving two Michelin stars, demand for solo dining has spiked, leaving the dining room half empty. (The restaurant did say it’ll hold one or two tables back for parties of one, but…)
DoorDash says it’s investigating another viral social media report of tip-bashing from a driver. The driver allegedly complained about a $5 tip on a customer’s $20 order because of a 20-minute drive. The company has dropped drivers in the past over tip complaints, too.
Amazon just can’t seem to get its food business going. Aside from Whole Foods, which it purchased a few years ago, the company has stumbled on both restaurant and fresh food efforts. The latest: hundreds of grocery store staffers at Amazon Fresh locations have been laid off. The internet giant has been operating these stores since 2020.