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DICKEY’S BARBECUE PIT
How Big Data Is Used To Gain Performance Insights Into One Of America’s Most Successful Restaurant Chains
Background
Barbecue and Big Data may not seem like the most natural flavour combination but one US restaurant chain, Dickey’s Barbecue Pit, are bringing them together with great success. The firm, which operate 514 restaurants across the US, have developed a proprietary Big Data system called Smoke Stack.
What Problem Is Big Data Helping To Solve?
The idea behind Smoke Stack was to get better business insights and increase sales. The intention was to guide or improve all aspects of Dickey’s business, including operations, marketing, training, branding and menu development.
Dickey’s were already capturing data from various sources, and the aim was to bring that data together in order to maintain a competitive advantage. CIO Laura Rea Dickey – who is the granddaughter-in-law of Travis Dickey, who founded the chain in Texas in 1941 – explains: “Its biggest end user benefit is bringing together all of our different datasets from all of our source data – whether it’s our POS [point-of-sale] system in stores directly capturing sales as they happen, or a completely different source such as a customer response programme, where folks are giving us feedback online or in different survey formats.” Another problem that Smoke Stack was designed to solve included “information rot”, that is too much data without the ability to analyse it in a meaningful, actionable way.
How Is Big Data Used In Practice?
Smoke Stack crunches data from POS systems, marketing promotions, loyalty programmes, customer surveys and inventory systems to provide near real-time feedback on sales and other key performance indicators.
All of the data is examined every 20 minutes to enable immediate decisions, as well as during a daily morning briefing at corporate HQ, where higher-level strategies can be planned and executed. As Dickey puts it: “We look at where we want to be on a tactical basis. We are expecting sales to be at a certain baseline at a certain store in a certain region, and if we are not where we want to be, it lets us deploy training or operations directly to contact that store and react to the information.”
In addition to its strategic value, the near real-time nature of the data means that operational behaviour can be manipulated “on the fly” to respond to supply and demand issues. “For example, if we’ve seen lower-than-expected sales one lunchtime, and know we have an amount of ribs there, we can put out a text invitation to people in the local area for a ribs special – to both equalize the inventory and catch up on sales.”
Big Data has also been integrated into the process the company use to select which items to put on their menu. All candidates for inclusion on the menu are evaluated by users according to five metrics: sales, simplicity of preparation, profitability, quality and brand. If the items meet certain targets in all five criteria, they become permanent fixtures on the menu of that particular restaurant.
Following a successful trial involving 175 users, the company have now rolled out the programme across the entire chain. Feedback from the trial was both positive and negative (the initial rollout was just a “starter pack”), but the general consensus was that, once folks had had a taste of the Smoke Stack system, they wanted more, or they wanted the same thing with a few tweaks. Owing to the success of the project, Dickey’s are now moving to a second phase: the Smoke Ring micro-marketing project.
What Were The Results?
The restaurant business is highly competitive and, for a company to stay ahead, speed is of the essence. “If a region or store is above or below a KPI – whether it is labour or cost of goods – we can deploy resources to course correct, and we are reacting to those numbers every 12 to 24 hours instead of at the end of every business week or, in some cases, using months-old data. To stay profitable, it is just not reasonable to do business that way any more,” says Dickey. Thanks to Big Data, Dickey’s can better understand what’s occurring on the ground and make quick decisions based on that information. For them, this translates into increased savings and revenue.
What Data Was Used?
Smoke Stack largely makes use of internal data. This comprises a blend of structured data (such as data from POS and inventory systems, and customer data from loyalty programmes) and unstructured data (such as data from customer surveys and marketing promotions).
What Are The Technical Details?
Dickey’s have a team of 11 people working on the Smoke Stack project, including two dedicated analytical staff, an on-site reporting lead and a part-time solution architect who assists with strategic initiatives. There’s also a two-person offshore team trained in both analytics and data integration. But the company also work closely with their partner iOLAP, a Big Data and business intelligence service provider, who delivered the data infrastructure behind the operation. Dickey says: “Even though our team is probably a bit larger than the traditional in-house team for a restaurant business, because [data is] where our focus is it requires a partner.”
Smoke Stack runs on a Yellowfin business intelligence platform combined with Syncsort’s DMX data integration software, hosted on the Amazon Redshift cloud-based platform.
Any Challenges That Had To Be Overcome?
One challenge for the chain has been end-user adoption. “We have folks in very different, vertically integrated positions within the company,” explains Dickey. “Those folks in the corporate office are based in a traditional office setting working around the reality of the business, all the way down to the folks in our stores on the frontline who are running a barbecue pit and interacting with customers. Having a platform that can integrate with all of those different user types is probably our biggest challenge.”
The solution came in the form of a dashboard that made it easy for the whole spectrum of end users to access and understand data. “The interface makes it much easier. It’s excellent, particularly for people who you might traditionally think of as more ‘analogue’ than digital. They came to work for us because they wanted to be barbecue artisans, not analysts.” The fact that Smoke Stack is so easy to use means it integrates far better into everyday operations, even with less-technical colleagues. At the end of the day, data that is easy to access and understand is far more likely to translate into action. Now, more than 560 users are accessing the 200+ reports that Smoke Stack offers.
Another challenge, as is often the case when businesses move into Big Data, has been finding people with the necessary analytical skills. In Dickey’s experience, finding the necessary skills is one thing – finding people who are willing to think outside the box in terms of where they may put those skills to use is quite another. “There is a huge skills gap in the market compared to need. For us, part of the challenge is not only finding folks with the right skill sets – it is convincing them that barbecue really is doing Big Data.” In this instance, partnering with an external provider really helped supplement the company’s in-house talents. “We have been very lucky in choosing the right partner. We have an account contact in our office at least 20 hours a week and we’re working very closely with them at all times – it’s closed the gap of what would have been a skills shortage for us if we didn’t have a partnership like this.”
What Are The Key Learning Points And Takeaways?
This case really highlights the importance of working with a brilliant partner: one that is willing to work closely with you and that really understands what you’re trying to achieve. As Dickey puts it: “We’ve really been fortunate in finding an excellent partner, and being able to pull together technology that’s really met our needs – we’ve made barbecue and Big Data a kind of strange reality.”
Another highlight of this case is how users right across the company – from the boardroom to the restaurant floor – have access to data that helps them improve performance. Central to this is a flexible, user-friendly platform. “This flexibility has been key to user adoption and given us valuable insights. Smoke Stack has bridged the gap for us from data that is merely accessible to data that is valuable, timely, manageable and actionable.”
REFERENCES AND FURTHER READING
Find out more about Dickey’s experience at: