As we continue to see a shift and convergence of shopping and hospitality experiences, with an emphasis on this being an evening activity; retail, dining and hospitality brands must start to embrace new forms of customer engagement and technology solutions.
Without the technology in place to provide consumers with an entirely frictionless and hassle-free experience, those brands on the cusp of what we call The Experience Economy, won’t remain ahead in this competitive environment.
Figures supplied by analysts CACI indicate that retail outings where leisure was the chief purpose went up by 28 per cent in the last couple of years. The British Retail Consortium, meanwhile has attributed increases in high street footfall to the growing demand for the evening leisure economy. It looks as if the focus on the night-time economy that began in local government with the relaxation of licensing and planning regulations, may in some measure be paying off.
Whereas in the past there was clear distinction between when consumers shopped and when they ate, with a move toward the night-time economy and convergence between these experiences, the hospitality sector must work harder to compete for consumer’s attention. What is paramount for the success of hospitality brands today, is the ability to provide a technologically engaging and rewarding experience.
According to Omnico’s consumer research, the Retail Gap Barometer, 51% of under 35’s want to have a single loyalty programme uniting retail, leisure, food and beverage facilities. No longer is it enough for shopping malls or high street destinations to ‘house’ individual retail brands, dining options and leisure facilities like cinemas, ‘millennials’ today want these to be united. The under-35’s, or ‘millennials’ account for 20% of restaurant or mobile app downloads, according to CGA strategy. These ‘Trending Tastemakers’ are re-defining customer engagement, with 67% of under-35’s expecting some kind of new technology to be used by retailers in the next three years.
The food services industry is not shy to embracing new technology, with alternative Omnico research questioning 153 contract caterers and food service companies, revealing that 40% have already implemented ‘online booking’ systems, with 23% planning to implement ‘mobile payment systems’ and 15% ‘mobile booking systems’. The use of new technology solutions and mobile apps is clearly important in order to meet the expectations of today’s consumer. Specifically, the industry has an understanding that consumers today engage most prominently via smartphones when on-the-move. The most rated functionality of a potential consumer mobile app by the food services industry is pre-order (31%), followed by loyalty (25%) and customer recognition (21%).
The fast-food industries race to embrace mobile ordering and payment reveals a clear industry-wide strategy. In May 2017 it was revealed that Burger King had begun testing mobile-payment technology in the Miami area, looking to rollout further within months.
McDonalds is apparently also planning a nationwide debut of mobile payment by the end of the year. Interestingly Omnico’s Retail Gap Barometer research revealed that of the 55% of consumers who want to have more activities and facilities available to them in a single complex, it is fast-food outlets that are the number one additional activity / facility they desire. The need for fast-food to provide a quick and convenient experience lends itself to mobile innovation. Starbucks has had a mobile-payment feature for years, with 24% of Starbucks orders in the first quarter of 2016 paid for using the company’s app. Orders placed via smartphones will make up more than 10% of all quick-service restaurant sales by 2020, according to Business Insider Intelligence. At that point, mobile ordering is expected to be a $38 billion industry.
Mobile is the clearest step in convenience for hospitality brands today. Retail and food services brands embracing The Experience Economy must undergo an “Uber-ization” to remain ahead. If our high streets are to continue drawing footfall, enticing with their mix of retail and leisure, they must think more like technology and app companies. The additional benefit of a mobile-first strategy is linking the ordering and payment, to a rewards programme, creating a more personalised engagement.
Those brands without a mobile ordering, payment and loyalty system are passing up on an enormous opportunity. As the industry explodes, fast-food companies, pubs and chains need to look to early innovators like Starbucks, if they hope to stay competitive in the next decade.