How a virus from Wuhan digitalised the hospitality sector
Remember the early days in 2020, when we first heard about Coronavirus in Australia? At the time we thought it was just another virus from the East. Like all others before it – SARS, Bird Flu, Swine Flu, Ebola. We naively thought this new Coronavirus would be confined to its country of origin and that we would escape the impact.
Remember when it then started to spread out of China and into Iran & Italy? We scoffed at these countries. ‘They’ve let it get out of control,’ we thought. Although at the time, we started to see weird things happen in Australia, such as people avoiding Chinese & Italian restaurants because they thought eating such foods would lead to contracting the virus.
Well, I, like many others, failed to grasp the severity of this pandemic until very quickly, on 16th March, Australia followed the rest of the world and took the steps towards a lockdown in an attempt to suppress the virus.
Those first few days that unfolded were surreal. Never in our lifetime did the quote from former Soviet Union Head of Government, Vladimir Lenin resonate more: “There are decades where nothing happens; and there are weeks where decades happen.” It seemed for at least that first week, things were literally changing by the hour. And they were. Tuning into our Prime Minister’s, sometimes two-times a day, press conference was the equivalent for many of us as when the British listened to Winston Churchill’s nightly updates of the blitz on England during World War 2. Rumours were flying around that the virus had taken over Australia, although we remained in denial.
Lockdowns forced the hospitality industry to adapt or die
Then suddenly, our denial was quickly replaced with fear, when we were all told that as of 11:59pm on Sunday 22nd of March, the country would be locked down. From the next morning, we could no longer go to our local cafe, sit down, read the paper and have a coffee. Congregating in a CBD food court on our lunch break was something we did last week. Even if food courts had remained opened, we couldn’t anyway because Scomo told us “if we could work from home, we must work from home”, which pretty much meant every office in the city closed as employees rushed to collect their laptops and access Zoom accounts so business could appear to be continuing “as normal.” And forget ducking out for a bite to eat in the evening. With these new lockdown measures, even thinking about enjoying a meal out was no longer a possibility.
What we have all come to learn over the years, is that whenever there is a crisis, usually economically driven, the first industry to be impacted is hospitality. Even if people wanted to go out for dinner or grab lunch on the go, the fear that presents itself when people’s livelihoods are threatened leads to that discretionary spend being halted, immediately.
Of course, it wasn’t just the economic hit impacting hospitality venues this time, the lockdown prevented people from going out to eat & drink at these venues. Those first few weeks were chaotic for everyone, and not just for people running hospitality venues.
Many hospitality businesses didn’t know what to do. In-between letting staff go and trying to ensure their produce didn’t go to waste, those in management were also trying to work out ways to transport their food & drink to people’s homes, without spoiling too much. And wait, how could they even communicate with their customers for takeaway & delivery orders? Some venues had already implemented some form of communications platform. Emails & SMS’s were flying out to customers with offers and incentives to get as many people as possible on the phone and ordering home delivery.
Remember that Lenin quote I referenced earlier? Well, for many of us in the hospitality industry, decades happened within weeks. In February, the general consensus may have been that the majority of venues would finally have technology to manage every facet of their business by 2030. By May 2020, if you hadn’t taken this step, the likelihood of getting through lockdown without impact was disastrous.
Online ordering platforms to the rescue
Businesses like MyGuestList came to the rescue, by providing an online ordering platform to venues. They waived start-up fees and helped venues join the digital world online in record time, so they could accept online orders. Staff at these companies were literally working around the clock to increase with the influx of enquiries.
And then, as soon as these venues were up and running, lockdown ended; almost as quickly as it arrived. The threat of the virus in Australia appeared to have subsided. Suddenly, we were allowed out again. Yes, there were restrictions on capacity limits on venues, but at least they could welcome back diners. Now, it was over to the reservation providers.
Because venues had capacity limits, it was more important than ever to finally do away with pen & paper diaries and say yes to online reservation providers. Suddenly, the number of bookable venues online increased dramatically.
From a diner’s perspective, if you wanted to turn up to your local Thai eatery, you couldn’t. The days you’d walk-in and ask for a table were gone. There was no guarantee that even if the venue looked half full, you would be allowed in, as the venue may have already reached its restrictive capacity.
Many venues had to retrench staff in 2020. So, unless you rang in the minutes before service began, the chances were, you would be directed to a polite answering message and you wouldn’t know for hours if your booking was secured. The only available option to dine-in, would be if you booked online, in advance.
And then there’s contract tracing to worry about. Initially, diners balked at the idea. What’s this for? Why are you asking for my details? Well Bill, if you don’t want to spend the rest of the year isolated at home, you have no choice but to share your details, so that if someone has Coronavirus and doesn’t know, while enjoying a meal at table at least 1.5 metres from you, it makes it easier for the authorities to pinpoint exactly where a positive case visited and get on top of an outbreak faster.
But hang on. This is a pandemic. We are told to “socially distance” from one another. We are encouraged to wear masks. And apparently, all those clean freaks that carry bottles of hand sanitisers are now no longer freaks. I may have been one of these people..guess whose time it is to shine?!
Hello 2020, hello QR codes
In 1994, a fellow from Japan, Masahiro Hara invented a new type of digital barcode. The QR code. For many a year, businesses attempted to implement the use of the QR code but it didn’t take flight. Masahiro Hara was a name to be forgotten in history, until 2020; 26 years later, when the QR code came back and with a vengeance. In pandemic times we can simply pull out our phones, open up our camera app and instead of taking another photo of the meal we are about to enjoy, we scan this funny looking image and just like that, a screen pops up where we can securely enter our contact data.
What does all this mean for venues? They are online for everything – takeaway orders, table reservations and contact tracing. Fortunately for the industry, the old cash registers are just about been done away with. Cool POS systems are in place now, ready to track orders & inventory.
Now the real battle begins. How to compete with delivery apps? In the years preceding the pandemic, delivery companies were on the up. During this time, delivery apps were rising faster than any other piece of technology to hit the hospitality industry. Despite the hospitality industry being laggards at embracing technology, consumers were all over it. We couldn’t get enough technology and the convenience that came with it. Gone are the days when one would need to roll out of bed on a Sunday morning, hungover, and head up to the local cafe for a bacon and egg roll. Nope, now it’s possible to stay in bed, grab your phone, load up one of several delivery apps and order said roll, fall back asleep for another 25 minutes and be woken to the smell of the roll at your front door.
So when COVID hit, consumers knew what to do: keep calm and carry on. Yes this is another reference to the British exploits from World War II, but, I’ll add to it: unlock your phone, open the delivery app and order delicious food and resume your favourite Netflix show. What a time to be alive!
Food delivery apps? High fees
However, fees as high as 35% on some delivery apps are going to kill venues. Before Covid, margins were already tight and taking a huge cut for deliveries now would mean some venues would essentially giving food away food. Not since Odysseus toiled in his mind of wanting to hear the beautiful sound of the sirens did a conundrum present itself quite like this.
As a venue, I need to provide food to my customers, but if I don’t promote myself through these delivery apps, how can I attract customers? Data. The power of these delivery apps isn’t the number of listings, it is their customer database. The only reason a venue chooses to list themselves on a delivery app is the lure of millions of active users. Who wouldn’t want a slither of that pie?
Gather and use your own data
But, what is the alternative? Well, here’s a start. Gather data for yourselves. “But we don’t have it,” I hear you say. Ah, but you do! Remember the online ordering platform you implemented in March & April last year? Look closely and there is your data. If you take phone orders from customers, their name & phone numbers are no doubt scribbled down on a piece of paper discarded. But your customers booking online means their name, phone number & email addresses are saved forever. And get this, their order is stored with those details. So when you want to move some last minute goose produce that is likely to spoil in 2 days, you know exactly who in your customer-base has previously ordered a roast goose roll and you can tell them what fancy goose concoction you have ready and waiting.
And the reservations platform that you finally succumbed too in May & June? The reservation platform, like online ordering, comes with the added benefit of storing everyone’s details forever and this includes not just who they were, but when & how often they dined. So if a regular customer suddenly stops coming, it is easy to send an enticing email or SMS with some sort of incentive to pry them back in.
And what about your QR code data? While it is illegal to use contact tracing data for marketing, it is not illegal to use a QR code. Again, in the spirit of limiting contact between staff & diners, venues can now display a QR sticker on a table for a diner to scan and view a menu, which can be updated daily, without the need to constantly re-print menus, or encourage diners to sign up to loyalty programs.
There is more data digitalised now than ever before. So, instead of succumbing to third party delivery companies, venues can fight back by collating and using their own data via online ordering, reservations & QR code systems.
CRM & marketing automation platforms can provide venue owners with the autonomy to access customer data as easily as it is collected. Have you heard the phrase, “data is king?” Well, guess what? YOU are the king now. Not the delivery companies. You have the most valuable tool in your arsenal to fight back with.
As a Melburnian, I only know too well what a lengthy lockdown looks like. When our friendly Premier locked us down again in July last year, the venues that adapted digitally could fear a little less than when we were locked down in March. By then, venues already had at least 4 months of customer data, could implement their communications platform and within minutes, send out an SMS to thousands of customers letting them know that they were still open and ready to serve them.
Lockdowns aren’t over yet.
But even when lockdowns are a thing of the past, that won’t mean that things go back to the way they were. Change is happening all the time. In 2020, we jumped forward 10 years digitally, in just a few months. Customers behaviours have changed and are well versed in using restaurant technology.
For those who think, ‘my doors are open again, consumers can dine with me whenever they want’, please do not be deluded. If you are not communicating with your customers online, your competitors are.
And remember, your biggest competitor is no longer your fellow restaurant next door or down the road. You are competing with big name delivery companies too. The ability to book online and immediately is expected, otherwise your customer will look elsewhere. And the ability to order food from a QR code at your table, pay digitally and walk out at your leisure, is no longer science fiction, this is reality.
Restaurant technology is here to stay
Technology stuff is not going away. If anything, it’s only going to ramp up further over the coming months & years. Take advantage of it. It’s not about replacing staff, it’s about putting your staff to better use and to place higher value on other tasks. Embrace it. Own it. Use it.
This article was written by Mark at MyGuestlist and Sprout. MyGuestlist is a powerful marketing automation and events management tool for the modern marketer. Sprout is a subsidiary of the MyGuestlist Group, which allows businesses to enhance their customer engagement through beautiful email and SMS communications.