Bond. Venom. Dune. The audiences are back in their droves, but how have their spending habits changed? With extremely strong retail spends being reported by cinemas, CineEurope’s Coca Cola seminar 2021 examined whether this is a short-term trend or if it is here to stay.
The Tuesday morning session at CineEurope in Barcelona is traditionally reserved for the retail seminar run by Coca Cola. With 30 years of partnership with CineEurope under their belt, this year was no different with The Coca Cola Company’s Oliver Delaney, Director of European AFH Customers chairing a session which included Conecta Research’s Client Services Director, Monica Ciapponi, cinema operators Ruth Hinton from VUE and Hendrik ten Napel, Pathé Netherlands Manager of Content and Product Management, and (joining in true post-pandemic style from NYC via Zoom), Dino Borrio from Eataly. Conecta had done the research, and it was important to discover from the cinema operators whether the results reflected their experience in cinemas.
The past 18 months have seen changes in consumer mobility patterns and purchasing behaviour. Customers have adopted digital in ways that very few could have predicted. For example, older customers are now embracing online food shopping and purchasing cinema tickets online – a behaviour previously associated with mainly younger audiences. Insights from McKinsey reveal that the habits and behaviours most likely to stick around in a post-pandemic world are those that support wellbeing and health, and make life simpler. Interpersonal behaviour has also changed – demand for “out of home” (OOH) experiences are at a high. People are wanting to go out and spend more money on non-essential items than ever before.
This insight certainly backs up the higher cinema concessions hit rates, both in terms of more people buying and customers spending more. But why?
Coca Cola asked themselves two questions: firstly, what is driving this behaviour? They had three hypotheses:
- New digital ways to buy;
- New operations within cinemas and fewer queues;
- Audiences missed the “whole” cinema experience.
The second question – and perhaps the most critical for cinema operators – is what could be the levers to sustain these metrics in the long term.
A combination of research results and real-life operator feedback would start to provide answers.
Conecta Research Findings
To conduct their research Conecta talked to frequent cinema goers in the UK, France and Spain who had consumed food and beverage (F&B). In 2019, 21% of the sample audience went monthly+, 43% of which consumed F&B at the cinema with an average spend of €6.2.
It is of little surprise that the Conecta research immediately uncovered that the more frequently the cinema-goer went to the cinema before the pandemic, the quicker and more frequently they returned. The younger audience has been the quickest to embrace the return. Since reopening, 47% of cinema-goers have returned at least once in 2021, and 88% of those who previously visited weekly have been back. Those who have returned also used to buy F&B more regularly and spend slightly more previously than those who, in 2021, are yet to return.
On visiting the cinema, a higher proportion (62%) of customers are now using technology ticketing options – online or self service ticket machines than before (54%), although this increase may be being driven by cinemas insisting on this taking place, having invested in the technology during the pandemic.
On their return to the cinema, the average party size has tended to be smaller as social distancing and bubble rules have been in force in various ways. An additional complication in France (one of the territories in which the research was conducted) is the Covid Health Pass, making it more difficult to share the experience with friends who have chosen not to be vaccinated. It also seems that the behaviour on these nights out has shifted, too – whereas before patrons would potentially combine a group visit with a restaurant pre- or post- film, that experience is now perceived as too complicated (advanced booking, restaurant hours in many places still limited etc.) All of which are having a direct impact on what cinema consumers are buying, and in what quantities.
The pandemic has also delivered another positive when it comes to F&B consumption in cinemas – there is less “smuggling” of items brought in from outside. Whether it is customers wishing to enjoy the “full” cinema experience or simply expecting more checks in-cinema, the net result is the same.
Some things never change, of course, and the most popular retail items for cinema-goers remain popcorn and Coke. However, new products are being tried, and are being viewed as a way to make the experience more special. Many different reasons support higher spending: the “full” experience and technology being just one. But reduced queues may also have a part to play (if more people are buying tickets and pre-ordering in advance), and also – and crucially not mentioned in the research – the requirement for mask-wearing when not eating or drinking. Many patrons may wish to simply eat and drink their way through the entire film to avoid wearing a mask.
The Operator Experience
Fortunately, the findings from Conecta paralleled VUE’s own experience, Hinton confirmed. We then took a look at some of the specific policies and changes that Pathé Netherlands have made to their retail offer, to make their customers feel more comfortable and to drive the spend in an upwards direction.
For Henrik ten Napel, it was all about “enhancing the customer experience”. This included cutting the clutter (for example, pre-preparing popcorn and kids’ boxes out of sight) to increase speed of service, creating a vision per category, growth categories, healthier options and improving the overall atmosphere.
To create the vision category for popcorn, they invested in warm cabinets for pre-prepared popcorn, whilst creating a flavour bar for the in-person experience, to more than compensate for the lack-of-staff contact time. They found that by dividing “production” from “hospitality”, they improved the quality of both.
New categories to drive growth included Starbucks, Coca Cola Freestyle, create your own ice cream, pick and mix nuts and a range of healthier options such as fruit salad and sushi. The latter appealing particularly to women and mums, they also de-sweetened their sweet popcorn (to the tune of 266 million calories per year, 38,000kg of body weight!), delisted their XL products and “health-ified” the kids offer (fruit water instead of fizzy drinks).
Finally, they improved the atmosphere by adding “fun” and DIY categories (such as create your own ice cream, Freestyle), invested in the layout of their F&B areas, and focused on staff training.
All of these changes amounted to a 25% spend per person growth between 2019 and 2021.
Pathé acknowledged that driving this growth was a combination of factors – what they were doing in-venue and evolving consumer habits. The challenge, therefore, was to adapt their in-venue offer to suit these new trends.
A final consideration was competitive developments – with other F&B outlets but also the competition with movie watching and F&B consumption in the home. Is making the cinema retail offer more of an experience the future of cinema F&B?
Learnings can surely be taken from Eataly – an experiential concept described as a “store with stories”. In Eataly locations, you can taste delicious dishes in their restaurants, shop for the same ingredients and learn how to recreate the recipe at home, all under one roof. Actively encouraging guests to be participants in an innovative food and beverage experience, the concept has proved popular with 37 locations worldwide, and extensive partnerships including with drive in / outdoor cinema concepts.
To conclude, Delaney summarised that the role of F&B in the cinema experience is an important and ever-growing one. Sustaining post-COVID incidence and spend per head is a huge opportunity as audiences return, however operators may need to adapt their retail offers and models to embrace the new behaviours that customers have post-COVID.
Single destination mentality, experience and ease of purchase have been key to returning cinema visitors, and as with many aspects of the post-pandemic return, the key is going to be investment. Behaviours have evolved and for those who can meet these new needs, the returns will be significant.