“The Internet? We are not interested in it” said a visionary and a software guru in 1993.
Can you guess who this is? It might surprise you that it was Bill Gates. With a wealth of knowledge, experience and insight he failed to see the future. While he built an empire and became the richest man, he failed to see the future.
Paradigm Shifts & Fatal Failures
Symbian, the smart phone operating system had more than half of the global market share. Today, it’s down to 1%. Nokia had about half of the mobile phone market share in 2007 but in six years its share dropped to a measly 3.5%. There are many examples where businesses have lost market share, even gone bust but these two cases are relevant.
Microsoft and Nokia failed to see where the future was. How would a new generation of users evolve, how would this generation use its phone and what could the phone do. In 2006 when Google announced Android, it had the vision to dream up applications which would change the way a phone works. While Google continued to make the phones more user-friendly, developers to launch apps quickly, Microsoft continued to make it more difficult. These companies thought that the world wouldn’t change and continued to work the same old way.
And, there you have it – both Symbian and Nokia are history even though they had a head start on their competition.
Technology and the F&B Services Business
So, what does the above case study have to do with the F&B services business? Plenty!
Technology is changing the face of the industry completely. While the basics of location, quality and service are still important, these are not the only ingredients that are essential for a restaurant’s survival.
Let’s look at how technology has already impacted the industry. Online dining guides like Zomato have successfully created an army of consumers who must visit Zomato before they venture out to eat. Food Bloggers (or food/lifestyle writers as they like to be called) are visiting restaurants and writing about their experiences. And, they too have their small but very loyal following.
Swiggy has revolutionized the way the young order their food. In turn, this has strengthened and encouraged revenues through home delivery.
As technology evolves there will be better and more innovative applications which are likely to be adopted. Have you seen how Google Now gives you alerts on your mobile bills, flights and more? It simply gathers information from multiple sources like emails, SMSes, Google searches and tries to provide you with relevant information. In the very near future, there may be apps which glimpses into your appointment calendar and suggests options for your business lunch with an important client. There could be apps which could give you the best dining deals on your credit cards in your locality.
The possibilities are endless but it is certain that the F&B Services Industry will continue to benefit from technology in ways never imagined before.
Drivers and trends
India is changing rapidly in every possible way and it is one of the fastest growing countries with the youngest population. All of these contribute to the revolutionize the way we live, eat, socialize and work.
India is the youngest country (av age 27 years) and 50% of India’s population comprises those born after 1990. This is a demographic group which is impatient, experimental, dynamic and socialize on the internet or while eating out. They are working in MNCs or studying in top engineering and business schools. They have large disposable incomes. Most importantly, they are connected 24/7 to the internet and social media.
This is an important demographic group for all restaurateurs as they form a large chunk of the customer base. About 72% of those who eat out, visit pubs are between the ages of 20 and 40 years.
Home delivery and take-aways
Millions of professionals with large disposable incomes are leaving their home towns and working in large Indian cities. They party often and avoid the hassles of cooking. As this population grows, there will be increasing dependence on ordering in. Technology is a major enabler and can help grow business in this revenue stream.
In the Nineties and earlier the biggest reason for eating out would be family affairs. That has changed and likely to change even more. Today, the Fun-Seeker (25%), Discerning Urban (24%) and Socializer (15%) are out looking for exciting and innovative dining experiences. These groups are no longer satisfied with Chicken Tandoori, Paneer Butter Masala and Dal Makhani. Maybe they want to try Enchiladas while they sip Mimosas. They want to make the most of Happy Hours and visit Retro Nights or get a discount for taking out their friends on a weekday lunch. The internet has so many tools that can help target this behaviour. Websites, hyper-local sites and online dining guides can attract customers in both peak and off-peak hours.
Social Media - Our life is an open book
We are no longer shy. The millennials capture everything they do and share it on social media. There are hundreds of ways to use social media for your business – competitions, gifts, videos and photographs can help you build an army of followers. This is one of the easiest methods to propagate. And, the cheapest means too.
My Recommendations for adopting internet technologies
Expand your presence online
In the NRAI IFSR 2016 event in Bangalore (NRAI India Food Services Report 2016), Samir Kuckreja said that it is important for restaurateurs to be on all possible online platforms. The advantage of online platforms is that they cost next to nothing. Technology disrupts. What is good today maybe useless tomorrow. Something unheard of today could be a technology giant tomorrow.
Invest time. Tear yourself away from operational issues
I know that you have tons of things to do and you hardly get any time free. However, technology is your business’ future. It needs time from you. While technology itself is provided on a platter to you, you should align it to your business needs. Let me explain that. Suppose you have asked someone to create a Facebook business page and you ask that person to update it regularly. He might be posting regularly on the various cocktails that is served with beautiful pictures. Unfortunately, you want your restaurant to be considered as a family restaurant with eclectic dishes.
Set Marketing Budgets
NRAI predicts a 25% annual growth rate in chain restaurants. One thing that a KFC, Burger King, Barbeque Nation or any other chain have in common is a strong focus on marketing. Marketing helps build the brand, take new products and stores to the market and drive utilization of off-peak hours. Unfortunately, most stand-alone eateries can’t afford the lavish spend that chains indulge in.
Most stand-alone restaurateurs want to open multiple stores, be profitable, attract investments and have a flourishing franchising model. All these need a strong commitment to marketing. Therefore, set aside a budget for marketing. Within this budget apportion a part to online marketing. The best part of online marketing is that it is instant, can be changed at any time and is measurable. If you consider Google Ads; you can set a daily budget, set a limit for each click and target a specific geography within a neighbourhood. If you don’t like it, you can change or withdraw the ad any time that you want.