Our Sales and Partnership Manager, Paul Berryman brings us the first of his 'Food for Thought' blog series. This month he considers disruptive tech businesses and their impact on the takeaway and casual dining industry.
This week I’ve been thinking, are QSR’s really doing enough to help themselves to combat unsustainably high charges (20%) from third party apps such as Just Eat?
It’s a pretty tough market out there for many independents and large chains who are facing gaping revenue gaps from rising operational costs and the exploitive rise of the likes of Just Eat and Deliveroo. These guys have got fast food consumers hooked on their convenient, frictionless and mobile/online-to-door ordering process – at great expense to the local takeaway and casual dining restaurant.
According to accountancy firm Moore Stephens, in 2017/18 there were 1,219 restaurant insolvencies, up 24% on the year before and nearly double the rate seen in 2010/11. It blamed overcapacity at a time when Britons are eating out less.
It’s only 5 years since I was a restaurateur myself and faced having to introduce new technology into my operation to improve efficiency and exploit additional revenue opportunities, (as well as taking a lot of the admin hassle away I hated!). At that time disruptive tech companies had not even be conceived, and I can’t imagine the painful feeling of what it must be like paying out those commission charges just to serve your own customers every month. How do so many stay in business?
Last week I went to my local fish and chip shop located in a great spot for any takeaway: dense housing; free parking; next door to a Tesco Metro and off-licence.
As I pulled up, I noticed the popular pizza and hot box takeaway had been replaced by Domino’s. I thought, “another one bites the dust” to Just Eat and there in its premium site sits Domino’s.
After ordering my fish and chips (and waiting 20 minutes for it to arrive), I noticed some new paper loyalty cards had been introduced: Spend £10 and get a box ticked; 10 ticked boxes = free fish and chips. A £100 spend to get one meal! Not sure I can be bothered keeping that loyalty card in my wallet and there’s no way my 20-year-old partner will be bothered with it at the expense of her Just Eat App.
It got me thinking, had the takeaway next door done enough to stay alive? It was great food, great service, great value, in a great location and always popular. The problem was, it joined Just Eat and very quickly, Just Eat “owned” its customers, the order process, and had the power to command high commissions for the privilege.
The pizza and hot box outlet had become a victim of the disruptive and highly popular third party App with its pure convenience, live updates, easy, intuitive and frictionless mobile and online ordering experience. Would the chippy be next?
As both a past restaurateur myself and now an advisor of EPoS solutions, what surprises me most is the fact that today there are so many readily available and affordable Apps to help QSRs beat off competition, drive revenue and mirror the customer experiences offered by the likes of Just Eat, Deliveroo and Domino’s.
Here’s a scenario that could have been:
Pizza and hot box takeaway gets concerned about Just Eat’s control of its customers and commission charges and launches a plan to regain customer ownership by:
Introducing a Mobile Ordering App with built in loyalty programme.
Establishing a loyalty programme customers want – not spending £100 to get one meal free on another piece of cardboard.
Increasing deliver efficiency via a Driver App.
Using a CRM platform and collating data from the mobile and online PoS.
Combining the loyalty App with its CRM to automate great, personalised promotions and gifts to make customers feel valued and feel like they are getting the very best value.
Creating a sense of community within its social media; uses its CRM to drive customers with purpose to like their social pages.
Launch cross-channel promotions of real value including exclusive 10% discount for ordering via the App/Online/Instore. SMS, Email, APP notifications, Social Media ……
Copies Domino’s tried and tested direct marketing and rolls out door-to-door drops with a strong call-to-action to order from the website/APP/join the club for exclusive discounts and offers (and we know the pizza will taste better than Domino’s and at less cost!)
Reducing time and costs through fast order to delivery Kitchen Management Software
Monitor product performance with intuitive stock control, and product reporting.
In fact, when the above scenario happens the outcomes can be substantial.
One of latest multi-site QSR’s to join the pointOne family, have introduced a host of our modules and integrations which include our Stock Control, ‘best of breed’ Loyalty Integration via our partnership with Como Sense, and Remote Multi-site Management.
With the Loyalty Integration (which works via an app) they have had a dramatic increase in repeat custom, as well as being able to monitor customer trends. Stock Control has curbed unnecessary waste and the introduction of Online Ordering using our Online Ordering API has allowed them to introduce a state-of-the-art online platform with no commission charges!
About ten years ago we saw the hotel sector suffer with the rise of the Online Travel Agency disrupting their traditional model and profit margin. The answer was to integrate key Apps such a social media, online booking, house-keeping, inventory and loyalty programmes into their PMS platforms. It was all about clawing back customer ownership and driving increased revenue by investing in the right technology and appropriate Apps. Whilst things still might be tough for the hotelier, many have recouped the revenue being lost and consumers today are more aware of the benefits of booking direct.