Research Conducted and Provided by SurveyMe
Background
We’ve all probably read the same “expert” reports on the death of moviegoing, killed by the rise of home entertainment. We’ve also heard that movie exhibition has never had it so good, with record ticket sales and increases in millennial attendees. Yet whichever argument you believe, one thing is certain: in good times and bad, movie theater profits rely on the success of concessions.
After speaking with several SurveyMe exhibition clients and observing their concessions operations, we came to realize that while every movie theater is different, there are also macro concessions trends which, if studied closely, may help all exhibitors future-proof their concessions operations and thus the profitability of their theaters.
Methodology
Five thousand eighty-nine moviegoers from over 300 U.S. movie theaters were asked six questions about their thoughts and spending habits at the concessions stand using the free SurveyMe app. The app recorded the time, date, and geo-location of each response to verify accuracy and completeness of the sample over a 10-day period in July 2017. Results were analyzed by age and gender with the input of SurveyMe experts using the SurveyMe SM@RT Insights Interactive Dashboard survey. Secondary research was performed over a period of 48 hours with over 130 millennials in Southern California to further examine observations that emerged from the primary national research.
By age, the largest demographic tested was 18- to 23-year-olds who, according to MPAA reports, have also been the fastest attendee growth demographic since 2012. For many theaters, the development of concessions stands is an ongoing process of innovation and modernization. In addition, rules for the tax and sale of alcohol in cinemas varies significantly across the United States. We intentionally did not distinguish between basic concessions, full service, and full service with alcohol. Results may not be completely accurate for each unique theater, but the methodology used for collecting the data is complete, statistically sound, and verifiable.
According to the recorded geo-location of their response, 63 percent of moviegoers surveyed for this research identified themselves as guests of two of the largest exhibition circuits in the United States. Neither of these companies authorized, participated in, or endorsed the collection of data in this report or its findings. No attempt has been made to isolate data for any circuit and/or compare it with company data in the SurveyMe network.
Whereas “per cap” is widely used in the industry, for the purpose of this study we have deliberately focused solely on average spend at concessions and excluded box office income
THREE GUEST DEMOGRAPHICS THAT STAND OUT
Rebels: Age 18–30 (Millennials)
Rebels are the fastest growing of all the demographics, but they are also bucking trends. Generally they do not visit a concessions stand as often as other groups when visiting the movies. They are much more interested in movie theater experiences and trying new types of food than other demographics. Ice cream proved to be their most requested item at a concessions stand. A majority of ice cream responses (39 percent) came from 18- to 23-year-olds. Pizza was another strong desire (26 percent) among this demographic.
If they don’t get what they want, they’ll sneak it in: 95 percent admitted they sneak food into movie theaters. In a follow-up survey, we focused specifically on the trend among Rebels for illegally sneaking food into theaters, where 75 percent cited multiple reasons for sneaking in food. The number one reason was “poor value,” followed by “want to spend money elsewhere.”
TOP 5 CONTRABAND ITEMS
- Candy
- Water
- Healthy Snacks
- Fast-Casual Food
- Soda
Reliables: Age 51+
Seven out of 10 people in this demographic said they’d be extremely likely to visit the concessions stand. Eight-five percent of the Reliables purchase only popcorn and soda, and the demographic ranked the lowest in alcohol spend proportionate to all other demographics.
One in five Reliables are content with the product range at their local movie theater concession. New product suggestions reflected a desire for options that complement a popcorn and soda purchase.
Rock Stars: Females Age 31–40
Rock stars are the group most likely to visit concessions stands. They spend the second highest amount of money ($15.08) and are most motivated by rewards.
Rock stars are the decision makers driving movie theater attendance and influencing future generations of moviegoers and are the only demographic who prioritize health foods over other categories: healthy foods (22 percent) were the most desired item among this demographic, followed by “ice cream” (16 percent) and “nachos” (4 percent).
THE SURVEY
QUESTION 1: How likely are you to make a purchase at the concessions stand?
Overall, guests are 4.9 times more positive (score = 6–10) than negative (score = 0–4) about visiting the concessions stand. Males and females are equally positive about purchasing an item—74 percent of each sample gave a positive score. Thirty-three percent of respondents said they are “extremely likely” (score = 10) to purchase from the movie theater concession.
Millennials were the most “neutral” (highest frequency of scores = 5) about whether or not to purchase from the concessions stand. Secondary research highlighted the main reason for this, which is a culture among millennials for sneaking food into movie theaters.
As a demographic group, millennials (18–30) are 4.75 times less likely to purchase from the concessions stand than older guests (31). Young millennials (18–23) are on average the least likely to purchase an item from the concessions stand. Older millennials (24–30) are nine times more likely to purchase from the concessions stand than their younger counterparts.
The highest future concessions spend growth is likely to come from moviegoers 31 and older. There is a disconnect between attendee growth and concessions income growth mainly due to millennial movie theater spending habits.
QUESTION 2: How much do you usually spend at a concessions stand?
The average spend across all demographics is $15.06 and the average spend per item is $5.97. Across all age groups, the variance between male and female spend is between $0.37 (41–50) and $1.01 (18–23). Across all age groups females spend 4 percent more on concessions than males. This varies between 2 percent (41–50) and 6 percent (18–23).
Across all demographics, however, there is only a $0.91 variance with average spend. This suggests guests have an amount in mind that they are willing to spend per visit and/or a core preference for certain product combinations, such as popcorn and soda.
Females 18 to 23 reportedly spend the most (average spend = $15.46), females 31 to 40 are second-highest spenders with an average spend of $15.08, and males over the age of 41 spend the least (average spend = $14.55).
QUESTION 3: How much more likely would you be to visit the concessions stand if you were offered a reward?
Females 31 to 40 are the demographic most likely to be influenced by a reward. Motivation peaks among females in the 31 to 40 group. Females are slightly more motivated (8.6) to visit the concessions stand because they will be rewarded than males (8.3). The positive influence of rewards is reduced with males in successively older age groups. Males 51 and over are the group least motivated by rewards. Sixty-six percent of guests said they would be “extremely likely” (scores 9 and 10) to go to the concessions stand if offered a reward. Millennials (8.5) as a whole are representative of all moviegoers in terms of being very motivated to visit concessions if rewarded for doing so.
QUESTION 4: Which rewards would motivate you most to leave feedback? Most popular reward types?
Moviegoers are most motivated by “free.” Fifty-six percent of respondents said a free gift without purchase necessary would motivate them to engage with their theater / visit concessions, while 51 percent of respondents said that a free gift with purchase would motivate them.
Rewards that give instant gratification are 2.7 times more popular with guests than delayed satisfaction rewards such as loyalty points. Moviegoers are less motivated by cash discounts at the concessions stand, however, with 19 percent fewer respondents calling it motivational compared to the word “free.”
QUESTION 5: What did you purchase at the theater concessions stand on your last three visits?
Ninety-six percent of all respondents purchased concessions in their last three visits. Overall, regardless of age or gender, the average guest buys 2.5 items at the concession. Females 31 to 40 buy slightly more items (2.7 per visit) at the concessions stand, and the 51 and over group purchase fewer items (2.2 per visit) than any other group, regardless of gender.
When it comes to alcohol service, only one in every 15 respondents purchased alcohol at the concessions stand. One in every seven males ages 24 to 40 buy alcohol, the most active demographic in this sector.
Popcorn (84 percent) and soda (77 percent) are still king at the concessions stand; for every 100 popcorn purchases there are 95 soda purchases. Respondents ages 51 and over of both genders are least likely to buy candy than other demographics (4 in 10 visits), and over half as likely to buy candy as they will buy popcorn (9.2 in 10) with soda.
QUESTION 6: Which one item currently unavailable at the concessions stand would you like to see added?
Overall, 40 different “new” product ideas were suggested. The most suggestions, many of which were very detailed, came from the 18 to 23 group (specifically females), suggesting they are highly engaged and strong advocates for concessions innovation. Females ages 31 to 40 gave the most suggestions regarding new product ideas for children.
Top 5 “NEW” CONCESSION ITEM SUGGESTIONS
- Ice Cream
- Healthy Foods
- Fries
- Pizza
- Hot Drinks
Q&A with Lee Evans, Chief Executive Officer, SurveyMe
Interview by Daniel Loria
I was alarmed to learn how cavalier some millennials are when it comes to sneaking concessions into a theater, but I wonder if that’s a generational thing: a 14-year-old isn’t going to have the disposable income that a 34-year-old has.
Yes, but other points were mentioned as well. Value was mentioned, but it’s also more than that: it’s an experiential thing. If they have the disposable income, they will spend it. What they want to spend it on, however, are things that they perceive as high experiential value.
In my own background, I started Bear Factory, which was bought by Build-a-Bear. That whole idea: you can buy a teddy bear anywhere, but you go to Build-a-Bear for the experience. With the movies, you can rent a movie, stream a movie, but you go for the experience. And the disconnect, I think, is between the movie experience and the concessions experience.
So as millennials see it, a pizza is a pizza. The world has moved on. A Blaze Pizza, for example, where you put your own toppings on and it’s ready in three minutes? That’s what they’re after, so why would they spend more money to get a standard pepperoni pizza at the concessions stand?
It’s the same with nachos or fries. They want fries, but they want to customize or personalize them. It’s more than the food; they want the experience.
I wonder how much that factor acts as a catalyst for cinema dining. On the one hand, you hear audiences are turned off by rising ticket prices, but many are willing to spend three times the price of admission if a meal is involved.
We went to a cinema with a bar at CineShow this year. The bar had 41 different liquors and 12 different beers. We said to them, “Is it borne out that the Rock stars—females 21 to 40—are the people that are coming here?”
And they said, “Absolutely. Now they don’t have to go to the bar down the road from the theater.” They can get an early drink at the theater before the film, then come back again for a drink after. So the movie has become part of the night out. You don’t have to move between buildings.
The second factor is couples going out on dates. The bar and new beverage concepts within theaters see a lot of first-time dates. It’s a kind of safe space to have a drink and then maybe go to the theater…or maybe bring up that “This isn’t working out.” [Laughs.]
One of the more interesting things I saw from the report was that alcohol isn’t a de facto solution. If you adopt alcohol, your problems aren’t solved. People aren’t going to be rushing in.
The thing with alcohol is, it’s not a solution on its own—and it always depends on the environment. If you come out of the theater and into the bar and smell the stale beer, that’s going to turn people off. Alcohol is just a tiny ingredient of the overall experience and ambience. If the ambience isn’t there, if the experiential value isn’t there, alcohol’s not going to solve it.
What people have to understand is, it’s no good just putting someone from concessions to work popcorn into the bar. No, you need an experience with bar staff. That goes into the cost. If you’re selling just a bottle of beer behind the counter, open the bottle and off you go. Same if you’re selling popcorn. There’s a lot more cost and preparation involved to serve alcohol properly, with the cups and wines and keeping everything chilled. I do wonder whether in 10 years’ time, we’ll look back and say, “Why did we ever go separately to a bar and movie?” If it’s done right, it can become an integral part of the experience: your food, your drink, and your movie theater together.
What are some of the characteristics of the three demographic groups you defined in the survey?
I want to start with the Reliables, because I think they’re an often-overlooked group. In fact, they’re the easiest to market to, because studies show a very high proportion of Reliables are male and female over the age of 51. They associate the moviegoing experience with popcorn and soda. The marketing is very, very simple. All you’re going to do is tweak what’s already there: free flavorings, different types of butter. Allow the same type of customization, but with the word “free.” You’re going to get free seasonings with this popcorn. They’ll come each time, every time, and they’ll try something maybe a little bit different. They’re not going to vary too much from what they know. They’re happy with that experience.
Moving on to the Rock stars, I think they’re a fascinating group because they’re influencing future moviegoers of young children. They go out in social groups. Girls Trip, Bad Moms—Hollywood is producing some big movies to find that demographic. One theater was running a program of free vodka with every other purchase during Bad Moms. It doesn’t have to be that complex; one was serving popcorn in a pink cup.
That brings up the potential of integrating your concessions strategy with a loyalty program. In the survey, you highlight the power of “free” in rewarding consumers.
What we found with the word “free” is that 83 percent of people who give feedback will go to the concessions stand. That’s commercial dynamite.
You mention in your study that women stand out as the most active consumers at a concessions stand.
It’s something that’s borne out with every theater circuit that we have in our network. So we have six questions and one of those is, “Who influences the decisions to go to the movies in your family?” Moms are far and away the highest in every single circuit. So that actually links with the Rock stars. Not only are females statistically the most influential in terms of who goes to the movies, but also they’re the ones that buy more.
People are bound to say they want healthy options at the concessions stand, but do you really think they’d back that up with purchases?
That’s the thing. With healthy foods it’s a what-they-say versus what-they-do model. They say they want healthy foods, but actually the theater experience is all about indulgence. You don’t associate indulgence with healthy foods. The reality is would they buy that in the movie theater? Would they really go with the carrots and the cucumber with the hummus?
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