The coronavirus pandemic has placed a great deal of pressure on UK industries. That said, seems that the hospitality sector has experienced far more than its fair share.
In mid-March, the UK went into lockdown, essentially freezing entire revenue streams for bars, restaurants and cafes, with the sector reporting almost £30 billion in lost revenue between April and June. Indeed, this will be extremely unwelcome news for the 3 million people relying on hospitality
businesses for employment.
Given the circumstances, it is hardly surprising that the government has stepped in stimulate sector recovery. VAT cuts, the launch of the Eat Out to Help Out Scheme and business rates relief have all been welcomed by the majority of the sector. However, it would be unwise to rely on these temporary measures alone to safeguard the future of bars, restaurants and cafes. Indeed, businesses must re-evaluate and innovate their own operations
if they are to survive in the long term.
Changing customer priorities
Consumer behaviour has changed dramatically in the midst of the coronavirus pandemic. Remote working, localised travel patterns and social distancing have all become deeply embedded in our day-to-day activities – and hospitality businesses must adapt accordingly.
First and foremost, the premises of bars, cafes and restaurants must be addressed to ensure the safety of customers and staff. In July, the Government issued new guidelines to help businesses adapt and extend their existing health and safety policies. Consequently, many venues have committed to removing tables and chairs to better facilitate social distancing, installing one-way systems, introducing hand sanitiser stations, and increasing the frequency of deep cleaning of the premises.
Additionally, we are seeing technology playing a leading role within hospitality businesses’ strategies. Contactless payments or digital loyalty cards, for example, are proving extremely useful in minimising contact between staff and customers. Likewise, the use of online booking systems has
increased amongst restaurants and bars, as they enable customers to safely reserve space in venues with limited capacities.
Use of databases, such as customer relationship management (CRM) systems linked to loyalty plaforms, also make it much easier to log client data. Such systems have certainly proved useful in collecting contact details of customers to comply with the Government’s Track and Trace efforts.
Positively, customers are welcoming these changes, with 96% of those returning to restaurants in July were satisfied with their experience. However, these changes only address short-term challenges. Indeed, if the hospitality sector is to safeguard its long-term survival, it is vital that businesses tackle a deeply entrenched industry issue; customer loyalty.
It is clear that the hospitality businesses are failing to effectively engage with their customer base. And this makes it near-impossible to effectively identify and reward loyal customers.
This is because the sector is relying on outdated strategies to attract and retain customers. They mostly rely on monitoring footfall and the memories of staff to recognise “regulars”, whilst online booking systems seem to be one of the few methods used to capture customer data. Meanwhile, they depend on paper loyalty cards to entice consumers to return to their venues.
Restaurants, bars and cafes can no longer afford to rely on outdated and flawed methods; particularly when they face the challenge of essentially rebuilding a strong customer base, post-Covid. So, it is time to overhaul their operations and investigate solutions which may seem unfamiliar at first.
Consequently, we are seeing more and more hospitality bosses looking to tech-based solutions to overcome the issue of customer loyalty.
Loyalty apps, for example, are proving to be extremely useful. They can be connected to an establishment’s CRM system, making it much easier for staff to log who is entering and leaving the premises. This, in turn, allows them to identify and reward loyal customers. It makes the dining experience much more enjoyable for consumers as well.
Whilst paper loyalty cards are often lost or damaged, apps on mobile phones are much more robust, and offer useful “pop up” reminders for when a user is due a reward from a certain bar, restaurant of café. Thus, they are encouraged to repeatedly visit the venue. Creating a more personalised experience for the consumer is absolutely vital to nurturing their loyalty; and it seems that loyalty apps are perfectly geared to do just this. Additionally, they provide
businesses with useful insight into their customers’ behaviours, thereby enabling them to adapt to customer needs.
The post-COVID era holds many challenges for the hospitality sector. That said, it also presents some exciting opportunities. It is therefore of the utmost importance that hospitality businesses look beyond the short-term issues, to see the bigger picture and understand how tech-based solutions can help them. Only then, will bars, restaurants and cafes be able to effectively engage with and nurture their customer base.
Tsewang Wangkang, CEO and co-founder, Embargo, a loyalty platform that allows restaurants, bars, and coffee shops to recognise and reward their customers through the use of pioneering technology