Restaurant owners are now struggling more than ever to drive sales, due to factors such as rising costs and competition, labor shortage, and weak consumer sentiment. Encouragingly, a vibrant tech scene continues to develop new ways to connect restaurants with potential customers and alternative sales channels.
So which F&B technology services will help you quickly achieve top-line sales growth? We have interviewed some of our F&B partners to come up with our top five picks, along with key insights, to help you evaluate what works best for your business.
1. Delivery services
Online delivery services provide meal ordering and delivery services through a web-based platform or mobile app, allowing F&B establishments to reach out to a wider customer base.
Increase sales: Estimated 5-10% increase in monthly sales, with the option to set prices higher than your in-store menu to offset steep commission rates.
Flexibility: Most services do not require upfront payments, exclusivity or commitment. You have the flexibility to partner with one, or multiple, delivery services.
Option to outsource logistics: You have the option to utilize third party services to manage delivery logistics.
High commission fees: Commission fees can be as much as 25-30% of your sales price. A deposit of $100 is also typically required for hardware (i.e. a tablet).
Potential disruption to operations: F&B merchants may find it difficult to handle a sudden increase in delivery orders during peak hours.
Food selection and quality: You may have to refine your delivery menu, as fried items, for example, meant to be served hot and crispy might not hold up well during transit!
2. Reservation platforms
Online reservation platforms allow customers to make table bookings in advance. Most platforms are now accessible through mobile apps and aim to increase sales through better seating management.
More effective promotion: Generate more effective promotion campaigns by teaming up with reservation platforms for greater awareness, conversion rate and extended customer reach.
Automate processes: Streamline restaurant operations using reliable digital interfaces.
Improve forecasting: Optimise cost management through better planning around inventory, staffing and seating.
Upfront costs and commission Fees: Monthly base fees can be as high as $150 per outlet listing plus a reservation fee per diner (~$2).
Yield management dependencies: Careful planning is required to maximise the value of each and every seat in your establishment. Over-reliance on reservation platforms could cost you significant commission fees.
Reservation cancellations: Make sure to report no-shows; if not, you will continue to be charged for the reservations.
3. Discounts & promotions
Today, digital platforms aggregate discounts and promotions and can connect your restaurant with customers by offering attractive promotions to help you increase customer traffic.
Drive trial: The Entertainer and The Good Life by StanChart help drive trial by offering deals such as 1-for-1 main entrées and other attractive incentives, increasing your potential customer base.
New customer conversion: With appropriately timed discounts and promotions, existing customers are likely to revisit their favourite restaurants. Consider incentives to convert one-off transactions into repeat visits.
Upsell, upsell, upsell: Some customers demonstrate an increased propensity to consume when they see a good deal or discount. Use this as an opportunity to upsell other products!
Reduced profit margins: Upfront activation or commission fees typically required. Prolonged promotions could also result in cannibalization of sales.
Potential displacement of regulars: A lack of terms and conditions (e.g. rate fences) could result in long wait times, potentially dissuading regulars from patronising your establishment.
Difficult customers: Discounts and promotions may attract entitled customers with unreasonable demands even though they are paying less.
4. Catering services
Online catering services connect F&B customers with local catering options. Restaurants can now offer their food and beverages to larger groups of people targeting a variety of occasions.
Extend customer reach: Increased exposure to larger groups targeting a variety of occasions such as office meetings, events and parties since some of these services throw in basic marketing support.
High-volume orders: Most services require minimum orders of S$250-S$500, which can drive up your daily/weekly sales.
Outsource labour-intensive tasks: Ancillary services required for catering such as the sales platform, licensing, food transport, and on-site setup and takedown are mostly provided by the catering services. This allows you to focus on preparing great food.
Commission fees: Most catering services require a commission fee of around 20%-30% of your total bill.
Stiff competition: You may face a competitive disadvantage if you are listed alongside traditional caterers, which are generally able to offer more competitive pricing due to economies of scale.
Constrained resources: Be prepared to have the space and manpower to handle high volume orders. However, most online catering services do offer a minimum lead time for orders.
5. Event services
Event services help F&B establishments list their space for meetings, parties, or any events with a twist. List your restaurant space on these platforms to drive greater customer traffic during off-peak periods.
Driving off-peak demand: Idle restaurants still incur operating and utility costs. Consider leveraging on any type of (legal) events to help you fill your establishment during the off-peak hours- so long as it does not interfere with regular operations!
No hidden costs: These platforms function as online marketplaces that facilitate transactions between venue owners and event coordinators. Apart from a small processing fee, you do not need to take on additional charges.
More attractive packages: Every event is bound to require more than just a venue. One-stop platforms that provide additional services present a more attractive package to consumers!
Stiffer competition: Specialized third-party platforms usually have hundreds of listings on their sites. Side-by-side comparisons are common and your restaurant will have to stand out from the rest.
Additional client demands: Events frequently require special arrangements, that in turn demand more resource planning and accommodation.
Displacement of walk-ins: Closing your establishment for private events on a regular basis may frustrate walk-in customers.
At Eunoia, we provide a universal, ready-to-use e-commerce platform for F&B businesses and technology providers to rapidly integrate and connect with each other, power innovation, enhance customer engagement, and increase revenue. Eunoia provides an open ecosystem which fosters cross pollination of ideas and cutting-edge solutions that aim to shape the future of the F&B industry. Learn more at www.eunoia.asia!