Technology, digital and product innovation –

the perfect future blend

Michele Young, director of Foodservice Support Ltd (www.foodservicesupport.co.uk), an independent business which she set up in 2010 to offer creative and commercial solutions for growth to businesses in the food industry, shares with us her post-pandemic thoughts for the café sector.

NEW LANDSCAPE

“What does the ‘new normal’ look like?” It’s a question I’ve been asked frequently by those who are trying to get a grasp on what to expect when life resumes to some kind of normality, post lockdown. This time last year there we were, lounging on our comfy chairs in coffee shops, sipping lattes, laughing and joking with friends, listening to the beats of the background music and generally enjoying the vibe we’d come to expect from our favourite coffee haunts. Roll on twelve months and, suffice to say, we all know that the impact COVID-19 has had on our industry over the last year will be long lasting. We’re social animals and one of the things we all have been missing the most is the human connection, social interactions and experiences, which bodes well for the return to business for our industry. We already saw how people reacted last summer after the first lockdown and now that we head towards spring and summer, and hopefully a gradual relaxation of the current restrictions, we’re all hopeful that consumers will place an even greater value on shared experiences and join us in our venues for their daily cup of joe. Whilst we can’t wait to “get back to it” there is also a degree of caution permanently instilled in us all around what we expect our new experiences to look and feel like in the future. The public expectation for safe and clean spaces will still be highly prevalent in everyday life for quite some time and visits to coffee shop environments will demand that assurity for safety, just like any other sector of retail or hospitality. So one of the focus areas for many coffee shop owners and operators, whether large chains or independents, will have to be to find the best service solutions to minimise the number of interactions at every part of the customer journey, so as to answer the need for being ultra-hygenic at all times. Now that we’ve all become accustomed to social distancing, queueing patiently, an increased frequency of takeout and using various mobile apps to view, order and pay for goods, we realise that these are indeed some of the new behaviours that are starting to shape the future. The integration of these technologies in all types of businesses is here for the long-term.

DIGITALISATION

The whole eating and drinking out experience has been “digitalised” in the last 12 months and the number of businesses which have introduced mobile ordering, online menus, mobile payment options, cashless systems, e-commerce, CRM platforms and rewards programmes is endless. For an independent coffee shop owner/operator, the thought of introducing all the required technology for a hassle-free and contact-free sales and marketing solution can be a bit daunting, but it will certainly form part of the criteria for future business. I read a number quoted by Mastercard that 75% of all transactions across Europe are now contactless. The good news is that there are some very affordable new technology packages out there, even for independent operators. These are extremely user-friendly and offer a great first step into the digital ways of working and being able to hold a meaningful dialogue with your customers. For years I always looked at coffee shops as an evolution of the traditional local pub, where a regular customer would be greeted by name and in some cases the owner would even know his regular customers by name and by beverage order! I was in Nina’s Coffee Shop, an independent business in Kendal last summer and I lost count of the number customers who came into the shop and who didn’t even need to mention their order. Top service! Knowing your customers that well can add tremendous value and loyalty to your business or brand, but going one step further and being able to use artificial intelligence provided by some of these mobile apps - to predict and prompt your consumer behaviours - can ultimately help build sales even more. Customers want to feel appreciated for sticking with businesses and changing their behaviours especially during the lockdown periods. Now is the time start embracing these technology enhancements and integrate your loyalty or rewards programmes onto digital platforms in order to appeal to the new generation of digital first and digital savvy consumers.

ENHANCED

I’m working with a great company who provide a fantastic tech and app solution to a number of clients across coffee and sandwich sectors worldwide. These app set ups are low entry investment and have already demonstrated their worth in building a strong database of customer information and insights, have proven to deliver higher average spend amongst members and drive more frequent repeat visits.

The platform also offers the opportunity to digitalise all the typical local marketing engagement tools like coffee collector cards, scratch and win cards and other gamification programmes, reducing the need to print endless vouchers, cards and flyers that end up in landfill. It can also integrate reward schemes and point collector schemes and even offers a new monthly coffee subscription-based option – something Pret and Leon both launched last autumn – which were aimed at supplementing lost revenues with a mechanic to encourage brand loyalty.

At the end of the day, you want to be able to change your customers’ behaviours and reward them for something they are not currently doing – so using technology to gather this wealth of information about your customers’ buying habits and distilling the information can ultimately guide you to engage them with the right promotional messages needed to prompt a purchase. This kind of tech is no longer reserved solely for the big chains, it’s out there and anyone can use and benefit from it so it’s time to embrace this as part of your sales and marketing strategies. The other benefit is you can integrate payment solutions and click + collect into apps as well. This is another area where chains are starting to make infrastructure changes at unit level to accommodate contactless pick-up. I’ve noticed that Joe & the Juice in London have added ‘App Pick up’ shelves in some of their locations and I read that Starbucks in the USA will be opening “pick up/walk through” stores too.

So it looks like the contactless solutions and takeout trend are set to continue for some time in the coffee shop sector and the grab-and-go behaviours will call for a renewed focus on the portability of products listed on menus. With 61% of consumers currently making more environmentally friendly, sustainable and ethical purchases, it will also be important to keep an eye on packaging trends and ensure that your packaging solutions deliver against sustainability credentials and expectations.

DELIVERY

Whilst delivery was not even on the agenda for many coffee shop operators pre-COVID, last year it became a necessity for some to survive 2020. Personally, I cannot see how delivery can be long-term sustainable or profitable for traditional coffee shop operators who probably run on a lower average spend threshold than most restaurants. I think ultimately it’s the location which will govern how fast operators can return to profit.

A survey by YouGov has highlighted that 64% of people want to support local businesses and so locations in the out of city “suburbs” are now definitely reaping the benefits. These are the locations that use to rely predominantly on weekend trade, whilst the city fed and watered the busy workforce. That’s all been flipped on its head now with working from home becoming the norm. I think it’s only a matter of time before I start hearing coffee van chimes in my street with the amount of people working from home. I think there could be a new business model in there somewhere.

HABITS

Being at home all day has, of course, had a profound impact on people’s eating habits and the last 12 months has resulted in an increased awareness of physical and mental well-being. It has accelerated the wellness trend in the food industry even faster forward than previously anticipated, so expect to see a demand swing towards healthier food and drinks, healthful grazing and snacking and a preference for desktopdining for those returning to the office world. We’ve already seen the uptake in vegan and plant-based foods and an increase in use of functional ingredients to address mental and emotional health needs.

Consumers will be looking to find more of these types of functional food and drinks that claim to help people focus, relax, relieve or prevent emotional health issues, so it is important to start talking with your suppliers and reviewing the range options available so you can stock them on your shelves.

Seasonal opportunities still exist too. I live out in the Chilterns, where one of our smaller, independent coffee and sandwich shops, Crumbs Two, have been tapping into new opportunities like take-home afternoon teas, birthday party and Valentines and Easter packages and more additional bundles of coffee related merchandise for gifting.

I’ve noticed increased activity on social media platforms by quite a few local coffee shop operators as they harness the power of facebook and instagram to reach new and local audiences. These are great ways to keep your local community informed of special offers and new products, but need a well-thought through targeting approach to ensure cutthrough.

Part of the recovery phase for all café operators has to include some of these types of innovations, whether technology or proposition related. The good thing about smaller, independent businesses is they can take advantage of these new opportunities, react faster and be more flexible to try new things. If the last 12 months are anything to go by, then creativity will continue to thrive. I for one am excited to see what the next chapter brings.