The CEOs of Hungry Monkey (Mat Caldwell) and Preoday (Andrew White) are of the opinion restaurants should have their own apps, or that aggregators should allow companies to access customer data, rather than rely on middle-man aggregators like Just Eat.
Hungry Monkey is a food ordering app in Gibraltar and Preoday provides an e-commerce platform offering mobile ordering services (Hungry Monkey is a client, along with companies including bakery Greggs, which runs retail outlets across the UK, and Benugo, an operator of restaurants and cafes).
Their CEOs are critical of JustEat because, they say, it does not let restaurants access data about customers and orders – information which is crucial to improve marketing.
Mobile World Live asked them to explain their thoughts and also to share their opinion on the UK Competition and Markets Authority’s (CMA) concerns a merger of Just Eat and Hungryhouse may result in a loss of competition and worse terms for restaurants.
Why are restaurants better off having their own app rather than using a service like Just Eat, and how will customers benefit from this?
AW: The two key drawbacks are high commission fees and the way they block restaurants from accessing customer and order data.
Due to high charges many takeaways have had to raise their prices to keep their head above water. But with a commission-free app, takeaways can afford to offer their users app-exclusive discounts and reduced prices.
Just Eat exists in a space between restaurants and their customers and uses this position to claim online customer data is its property, not a restaurant’s. The restaurant will be told the food to prepare, but have no way to record, analyse or benefit from order information.
By using their own app, restaurants can gather customer data and analyse it to visualise behaviour. This knowledge allows them to create bespoke offers for loyal customers. For instance, they can strategise marketing for those that have ordered less in recent weeks and manage stock ordering by revealing sale patterns.
In short, having their own app can help them make better business decisions and improve revenue; they can keep their data and their money.
Added to this, when using portals like Just Eat, it’s hard not to become just another takeaway, where the businesses’ reputation is judged primarily by location and cuisine type, and how much the company pays to be at the top of the list.
With its own app, a restaurant can focus on the more important reasons for a customer to order with them: the food, the service, the brand.
All of this naturally benefits customers. They are supporting businesses that they are fans of. That support is returned in terms of customer service and personalised benefits. Where a restaurant isn’t having to pay high commission fees, they may even be able to pass that cost saving onto the customer via lower dish or delivery prices.
MC: As long as they can capture data, every restaurant should be analysing spending patterns to gain a greater insight into their business and customers. With very little effort they can learn what their customers are ordering, when, where, and how often, and they can form an image of their typical customer.
Knowing this, they can then create marketing campaigns ideally suited to that customer.
The ultimate result is improved customer experiences and engagement which then drives visits and leads to an increase in sales.
Restaurants can benefit from mobile ordering in terms of increased sales, basket size, market reach, customer loyalty, business data and operations.
Looking to one of our customers to provide an example: there’s a series of restaurants in Gibraltar owned by the Hunter Group. It believes mobile ordering has given it an advantage over competitor restaurants not yet offering pre-ordering and delivery. By feeding data it has collected through mobile ordering into fresh marketing and promotional campaigns it has been able to grow and diversify its customer base.
Restaurants have seen an increase in revenue alongside a rise in the average spend per order.
What are your thoughts on the UK CMA’s concerns that the loss of competition resulting from the Just Eat/Hungryhouse merger may result in worse terms for restaurants using either of the two companies?
AW: The CMA is right to be concerned. If the merger goes ahead Just Eat will move towards a holding a monopoly on the food mobile ordering market in the UK. A key concern of the CMA is that such a monopoly would allow the holder to trap its restaurants into a cycle, charging ever-higher fees. The current figure, somewhere between 12 per cent and 14 per cent, already cuts into restaurants’ slim margins. Raised fees would slash them further.
Just Eat’s aggregator service is seen by many as offering the most accessible route to online and mobile ordering. This causes restaurants to wrongly feel it is the only way they can be successful and profitable. In the event of a merger with Hungryhouse, those same restaurants will feel under pressure to pay whatever fees Just Eat sets.
MC: It will not be beneficial to the restaurant partners in the long term as competition is crucial here to maintain the best service from restaurants. The quality of food could be affected if the commission percentage increases.
What makes Hungry Monkey different?
MC: We identified an opportunity in Gibraltar to create a new mobile and online takeaway service. There were no existing providers yet but there was a high-tech population ready for one.
So far 32 per cent of the Gibraltar population has downloaded the Hungry Monkey app; at the start of this year approximately 41,000 orders had been placed through the system.
Our biggest differentiator is that we let our restaurants keep their order data. Just Eat never lets venues see that information, but we think it’s essential for them to help improve their service offering. With it, they can market the right products to the right people and make more money than they would without it.
We look to provide a service that is truly local. Every venue on our app is one that users can order from – there’s no searching to make sure they are within the right radius as with Just Eat.