Customer Experience

Why is consumer loyalty within the UK casual dining sector so difficult to achieve?

The economics of a UK restaurant business are increasingly brutal.  To make profit restaurant operators are under more and more pressure to turn tables.  They must make doing so easier and without impacting the overall customer experience.  With little or no footfall growth predicted for the UK restaurant sector, except for quick-service providers, the real danger is that “Convenience and price will trump all.”

The very same conditions which have so tested the UK retail market over expansion and the power of e-commerce, as with online ordering, have created complex customer management, operational & technical challenges for restaurant operators to overcome.

While it is impractical for casual dining operators to lower prices, they have increasingly looked to technology to do more to provide customer convenience – which is to say, working with online booking platforms or delivery partners.

Unsurprisingly, food delivery is the fastest growing market within the hospitality industry.  A huge £4.2 billion is now spent on having food delivered in the UK annually.  The majority of this growth comes from aggregator platforms like Just Eat, and alternative delivery services like Deliveroo and UberEats, who have rapidly taken control of the entire ordering and delivery process.

These alternative services have raised customer expectations for their digital experiences.  What is more, since the aggregators control the experience, they have worked hard to ensure customers become loyal to the specific delivery platform rather than ‘the food makers’ themselves.

This kind of loyalty is very different from traditional brand loyalty programs.  Instead, they are driven by ease of use, value and convenience and as such, just like Amazon Prime, are extremely difficult to beat.  Customers today expect simplicity and convenience at their fingertips.  They have also come to expect a great mobile experience to enhance the in-restaurant experience.

Perhaps the inevitable conclusion for this evolution will be that tech giants will also be moving into this space; allowing customers to use those major apps which they already have on their phone to interact with restaurant brands.  Imagine being on Instagram, seeing a picture of food and ordering it for delivery on Amazon Prime, or chatting with a friend on Facebook Messenger and then paying your bill. This ‘future’ is where customers look to interact with restaurants in more ways (not less) and being able to do more within each channel.

Imagine being on Instagram, seeing a picture of food and ordering it for delivery on Amazon Prime, or chatting with a friend on Facebook Messenger and then paying your bill.

The fundamental problem with this ‘idea’ of the future is that it currently centres around an order pad connecting with the restaurant POS.  The result is the Front of House looking like the sales counter of an independent tech retailer.

The requirement to manually re-key orders from their order pad into the POS means that delivery providers have found this type of ‘non-integration’ slows their growth rather than speeds it up.

Imagine if the tech giants also begin to take the non-integrated route?  You could then also see multiple tablets from the likes of Facebook, Amazon, Google, Microsoft, and others all present just behind the counter.

For the operator, what should be a simple act of creating or changing a menu item now requires re-keying across multiple systems, each with their own logins and ways of working.  Then comes the pain of reconciliation.  Digital commerce is beginning to fragment the money flow that would previously have all come into a locations single Merchant ID.  Restaurant operator finance teams could end up being twice the size, just trying to work out where all the money is coming from, and if it all adds up.

The disconnect between the application of technology and an ability by both operators & service providers to create the optimal customer experience has become a real industry issue.

Only proper integration solves these issues; whilst also opening up possibility of doing so much more especially in relation to customer loyalty and enhancing the customer experience within the payment process.

The disconnect between the application of technology and an ability by both operators & service providers to create the optimal customer experience has become a real industry issue.

New POS aggregator companies are now starting to enter the market with the express goal of allowing operators and service providers to enable menu configuration and management; updating the menu once and then distributing it instantly across all providers.

If business is slow, the opportunity exists to change prices instantly, and across all providers.  Or to create a new menu item in direct response to a good news story or celebrity endorsement and publish it to social media for followers to buy instantly.

The UK casual dining sector is clearly in transition.  In response, branded restaurant chains have started to re-evaluate retention strategies for today’s customers.  With the prospect of all their digital commerce flowing to a single place, easily reconciled against their Point of Sale, operators are, for the first time, far better equipped, not only to keep up where their customers are moving digitally, but to unlock the real power of technology in creating and managing great personalised experiences.

Nick Chambers is Director of Mobile Loyalty Technologies Limited.

Why is consumer loyalty within the UK casual dining sector so difficult to achieve?
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