During the ongoing pandemic, the restaurant and food sector saw customers quickly gravitate towards mobile ordering solutions. Companies in this sector, big and small, were compelled to quickly and innovatively find ways to integrate and leverage e-commerce to fulfill contactless meal transactions to keep pace with this growing demand.
Unsure about pivoting to this online channel swiftly, many of them threw their lot in with third party aggregators, business. However, while they were initially delighted with the increase in orders, the high commissions charged by these food tech companies, sometimes going as high as 40%, saw their profits dwindle. That is when many contemplated starting their own web-ordering platform.
However, once bitten is twice shy, and F&B companies would like to err on the side of caution about when it comes to building such tech platforms. Kushang Kumar, Co-founder and CEO of SupplyNote explains how they can build a seamless contactless meal transaction online or set up an end-to-end onsite or delivery pick-up without worrying about commissions.
How economically viable is it for F&B outlets to invest in their own ecommerce platform? What are some challenges involved in adopting this approach?
Building an ecommerce platform for food ordering requires a huge amount of capital as well as time expense. There’s very little ROI to the cost that’s invested.
A better alternative to this option is using SaaS platforms that provide pre-built ecommerce platforms with customisable branding. They are available on subscription model as well as one-time investment model and are a more feasible option than building a platform from scratch. For instance, SupplyNote has partnered with Posify to offer a web-ordering platform for restaurants. Through this they can provide their customers a panel to order from, without incurring the losses on commissions.
Is it easy for F&B outlets to get consumers to shift to their indigenous mobile ordering solutions rather order on the platforms of third party aggregators?
At the end of day, customers care about savings, comfort and great food. If you want customers to shift from aggregators to your app, all you need to do is clearly communicate the value propositions and advantages of using your app.
If your platform is limited to the outlets of your brand, then the food quality, taste and experience has to go the extra mile. Once you build stickiness amongst your clients, features like exclusive discounts, easy ordering and quick delivery can be leveraged to bring them to your platform.
What loyalty offerings can they adopt to keep pace with the growing demand for digital purchases?
Gamification of platforms is a good approach to increase customer loyalty and the transaction volume. Offers like exclusive dishes or special treatment, can be unlocked when certain conditions are met.
For example, free desserts can be sent to regular customers who order multiple times a week. While there can be a good number of strategies, the execution is key to success here.
While consumers have become more cautious about their buying habits on one hand, on the other, there is a huge rise in digital commerce? How can F&B outlets leverage loyalty programs to attract and retain these customers in a saturated market of takeaway business?
Consumers value kitchen hygiene now more than ever. So, making sure that we are clearly communicating about kitchen hygiene SOPs is really important. Loyalty programmes like exclusive discounts can definitely help restaurants enjoy better customer loyalty.
How big of an incentive are loyalty programs for customers when it comes to buying from restaurants?Â
Loyalty programs are a great way for brands to incentivise customers to keep returning to their outlets. Offering rewards in exchange for repeat customers creates a quid pro quo relationship that benefits everyone.
One of the pioneers of this kind of loyalty program is Subway, which started the Sub-Club all the way back in 1985, discontinued to be replaced by an upgraded version ‘MyWay’ in 2005. As compared to its predecessor, MyWay which was a digital loyalty program had a 10X higher ROI. Today, the Subway app has over 10 million downloads, with their primary acquisition strategy being the loyalty program.
Can F&B outlets use data and analytics to come up with personalised offerings that relate to a consumer’s ordering preferences?Â
Nowadays there are tools for everything, especially personalisation. So, it’s pretty simple to come up with personalised offerings that relate to a consumer’s ordering preferences.
However, this comes at an added cost. So, if a restaurant is already struggling to keep the business afloat, then personalisation could be just an added expense.
What are some other strategies that F&B outlets can leverage to make their loyalty programs stand out?
Recently a lot of companies have been trying a nonconventional strategy in which consumers are rewarded dollar spend rather than purchase or product transactions. This is currently the biggest loyalty industry trend in recent years. Many brands such as Starbucks and Subway are already implementing it.
In Subway’s ‘My Way’ instead of ‘points’, Subway uses the term ‘tokens’ for its loyalty currency. Customers earn 4 tokens for per dollar spent. The programme is led digitally but still includes an in-store card option for tracking the customer’s account.
When a customer reaches 200 tokens ($50 spend), they are automatically awarded a $2 reward to spend in store – a 4% reward rate to the customer. Reward vouchers are valid for 90 days and can be used flexibly against any product in store.
Customers are given a personal reward on their birthday (once that data is supplied). Subway has also announced ‘Surprise and delight’ rewards, which will be added to the customer’s account ‘from time to time.’
This new MyWay programme is available in over 2.85 lakh stores mainly in the US and Canada. This is much more widely accessible than the previous ‘SubClub; programme, which was discontinued due to stamp card fraud and makes the new programme the largest in the quick service industry.
So, should F&B companies follow the example of ecommerce entities offering bonus points on reaching a certain cart size or give buyers the option of trying a new product for free to intensify customer interactions?
While these strategies have worked before and can bear some fruit, there’s always an advantage of coming up with something new. And with the loyalty programs, the fresher the strategy, the more customers get excited about it. Hence, keeping a balance of traditional and new strategies is probably the best way to do it.
How can they also use social media to build strong narratives around this?
Social media is the digital reflection of our world. Almost everyone is on social media. And there are groups, pages etc that enable hyperlocal and interest based targeting. Various social media channels also allow you to target people based on their geographical location, interest, age group and such demographics with ads, for which you have to pay per impression or per click. There are many ways businesses can leverage these features of social media platforms to acquire customers, engage with existing ones and grow their business.
