R. It is not easy to talk about catering after these nightmarish months.
LV. The numbers are all too evident. Prior to the lockdown, in Italy, about five million Italians had breakfast at the bar and as many had lunch out and almost ten million dined at least twice a week at the restaurant. Now, according to the FIPE survey of August, more than two out of three Italians had not had a drink or snack away from home. And yet…
R. And yet?
LV. Retex’s Food & Beverage division had not suffered the effects of the downturn in the sector. I believe that our natural tendency to innovate has been rewarded, and that innovation itself has been seen, by some operators, as a lifeboat. If not for the immediate future, at least in the medium and short term.
R. But let’s get back to Italian catering before the COVID-29 outbreak.
LV. The growth in food consumption outside the home was relentless, reaching a total turnover in 2019 of €86 billion. Nothing to be surprised about. However, as many as 65% of Americans don’t know what’s for dinner by 5 pm that same day. Then there is an important phenomenon, the grocerant, merging restaurant and grocery store by integrating traditional shelf sales and catering in a single space. The experience we had at Iper Maestoso is significant: about a thousand customers a day.
R. After the health emergency, are we going to see a forced digitalization?
LV. The term may sound extreme, but there is no alternative to this. Also because, in Italian catering, there is still a structural factor that has nothing to do with COVID-19: i.e. low productivity. The work unit value is 40% lower than the overall national average. In the last ten years, the productivity or value per hour worked has dropped by 9 percentage points.
R. Are there trends to pay attention to?
LV. Many, and important, both inside and outside the restaurant. Some we have already intercepted, others are not yet clearly defined, at least in common perception, but we want to briefly anticipate their application.
R. I’m keen to hear more.
LV. In 2018 and 2019 we presented our manifesto of change with two public events. That’s precisely how it went and the results can be quickly summarised: activation of all digital channels, inside and outside the restaurant, from delivery to take away and from kiosks to self-ordering. The mobile-first approach is essential, as our goal is to reach the customers wherever they are.
R. Starting also from social media then?
LV. Social commerce is a nascent market with great potential, and even more so after the lockdown. In the Italian catering sector, in particular, we were able to propose the technological spin-offs tailored to the needs.
LV. Retex has a long-standing association with WeChat, the world’s most advanced digital services platform. This has enabled us to achieve significant results also in the catering sector with Iconic, the proprietary technology of Retex strongly oriented to social commerce.
R. Definite and sure advantages then?
LV. In this way, the restaurant owner has an expanded base of potential users who do not have to perform any type of search, because already present on the social network. In view of the consequences of the pandemic and changes in consumer behaviours, for those wanting to go to the restaurant, via Facebook, the solution is already at home.
R. Outside the restaurant, it is impossible not to talk about food delivery.
LV. The growth of food delivery services should reach its highest peak in the 2020-2025 five-year period. According to Statista’s estimates, it will increase from 21 billion dollars this year, to 29 billion in 2024, 9 of which in Europe. With our applications, we are already in the position to enable the use of these services. We do this well aware of the sensitive nature of the subject.
R. That is?
LV. Perhaps a bit of pride comes in to it, but when it comes to ethics and civil values, Retex’s standards are well above the market average. For riders, a few Euros per delivery under any weather condition, paid on a piecework basis and with safety at risk are not a small problem. A solution will have to be found, also through the greater awareness of the demand-supply forces.
R. After the certainties of the present, what’s in store for the immediate future?
LV. We are working on the voice recognition technology, which, for us, will be increasingly important also for restaurateurs. By the end of 2020, more than half of all web searches will be vocal. It is unthinkable that voice recognition will not be included as an integral part of the digital relationship with the customer.
R. In what way?
LV. By adopting automatic booking services in natural language, especially today after the reduction of seats and tables in public places. The customer will state his order over the phone, based on the menu just displayed, and automatically receive confirmation, always by voice or via any messaging system. Also the payment can be made by phone, once the audio fingerprint of the voice has been recognized.
R. Work in progress, then.
LV. Yes, even if not nothing can be taken for granted, otherwise we would not be talking about innovation. We are working on speech technologies based on artificial intelligence and machine learning, to operate in natural language, as we normally do in restaurants. And this is also very interesting for deliveries, given the small market share, compared to the rest of the world, of food deliveries mediated by digital platforms: only 18% in Italy, while all the rest is still done by phone.
R. And after that?
LV. The front of promotion and loyalty. It is a typical point of comparison in other Italian retail sectors, but not in catering. If I look at the United States in the days of COVID-19, several chains have ramped up their loyalty programs, and even launched new ones. Big brands like Wendy’s, Taco Bell and Panera Bread, show with their successes that it is the right time to focus on customer loyalty. Panera Bread’s case is particularly interesting in this regard.
We are talking about a chain store of bakery-café fast-food restaurants with over 2,000 outlets throughout the USA and Canada. By offering special promotions between 10 and 11:30 am, in the face of a marked decline in breakfast consumption, the response from new customers to the loyalty program was overwhelmingly positive. According to the company, which seemed as surprised as the specialist press, the desired results have tripled in just three weeks.
R. What is your opinion on this specific point?
LV. That technology should enable a higher and broader strategic view of the customer relationship. Even more important than the immediate result based on the individual transaction, it is the customer lifetime value that counts. In the case of the brand mentioned, loyal customers use their points of sale six to ten times more than the others. A loyalty application provides reliable information on the changing consumer habits and on the times and ways in which this occurs, facilitating better business decisions and the most appropriate initiatives.