Up until recently, restaurants were hubs of social interaction, business meetings and romantic hobnobbing apart from the regular unwinding needs of white-collar workers who believed in living for the weekend. Enter COVID 19 and subsequent lockdown creates a tectonic shift where restaurants are perceived as online ordering centres for regular meals and occasional indulgences.
Food tech aggregators lapped up this long-awaited opportunity of phenomenal growth powered with significant overseas funding and growing middle income customer base. Food aggregators played the role of the lowest common denominator of Maslow’s hierarchy of needs delivering non-descript poorly packaged meals for value hunters. Table booking commissions and advertising revenues from strategically placed web banners became a thing of the past. They leveraged the lockdown situation well and scaled their delivery operations along with opening up of multiple cloud kitchens across the city powered by AIML (Artificial Intelligence and Machine Learning Data) for selecting the popular dishes and right locations.
Now everyone who loved to eat out had only one option, to get food delivered through these aggregators even though the experience part of the dining in was completely missing due to COVID norms. Restaurants and pubs soon realised, they have not focused enough on online brand building and don’t even have a proper CRM data to interact with their customers on a one-to-one basis to provide a direct-to-home service. They fell into the trap of high commissions, unreliable delivery service and a black box of end customer interaction – only open through the odd extreme reviews.
Is it too late not really?
The big players are now slowly rising up to the occasion and have started investing on their own delivery channels and CRM management. It’s a tough road ahead for restaurants because consumers are glued to the delivery apps whether through discounts or regular notifications. A stand-alone restaurant or cloud kitchen has little chance to fight the prowess of these tech giants. But all is not lost, here is my pill for the ailing restaurant industry
1. Build a parallel direct to customer delivery model through takeaway, home delivery and table booking site. It’s not only about technology but operational rigour, training and back to basics approach will help restaurants.
2. Invest in building CRM data across multiple channels including social media and own platforms. Communicate regularly with your customer through good creative content without being intrusive either through social media pages, email, SMS, WhatsApp even an odd call sometimes.
3. Stop spending money on aggregator platforms with offers but don’t log off from these aggregator platforms. Use it as a brand building channel rather than only revenue stream.
4. Have a strong conviction that a differentiated product with a faithful customer base can ride any storm. The best days for the industry are ahead of us, a tsunami of unspent consumer demand is going to take India by storm. Most large corporates across sectors are readying for this upsurge, F&B should get ready as well.
Some of the companies who are helping restaurants in their Direct to Customer model
Swiggy is piloting a direct ordering product, Swiggy Direct, in Mumbai and has entered into agreements with restaurant partners for the programme. If a new customer ends up on Swiggy using the direct ordering link, it will forgo commission along with flat fees for the next 30 days, according to the agreement. The direct link will take the customer to the restaurant’s page on Swiggy’s app, which will have a separate flow from the existing interface.
DotPe entered the Indian restaurant space two years ago to help hotel owners’ setup digital services without the need to sign up to the huge commissions of aggregators. DotPe asks for 1 to 3 percent commission per order, compared to 20 percent plus GST for the market leaders. Another big reason for restaurants to choose DotPe is customer data. Within a year, DotPe says it has processed over six million orders already for over 20,000 restaurants across India.
Bangalore-based Startup launches Helo Protocol App helping Indian businesses Go Online. Helo Protocol started out with a sharp focus on the F&B sector and now, after establishing a strong base in the same, they have now expanded to multiple other sectors. The startup has also raised a seed round from IIT alumni and renowned industry experts like Deepinder Dhingra (Founder & COO – Samya.ai), Sachin Maheshwari (Founder & CEO – EzCred), Prakash Sangam (CEO – redBus), Vinay Shukla (CEO – Conversenow.ai) LetsVenture and many others.
Bluchisel Business Solutions
Started in 2012, Bluchisel is Bangalore’s flagship service company in providing Digital Marketing and CRM Analytics service to F&B and Consumer Retail Business. Their community – ‘Secret Sauce behind a successful restaurant is coming up with new and effective ideas to survive the COVID scare and offer cost effective hyper local solutions as a community.