Fri 6th Nov 2015 - Friday Opinion
Subjects: Just Eat and the delivery opportunity, the Christmas opportunity, and the healthy food opportunity
Authors: Adrian Blair, Glynn Davis and Ann Elliott
Why major brands should work with Just Eat by Adrian BlairImagine a vast shopping centre with footfall ten times Westfield shopping centre, but where, instead of socks or stereos, every single person wants restaurant food. What would you do to secure a space? That is essentially what Just Eat has become over the last decade, transforming from a start-up into the world’s busiest digital high street for food delivery. At 59,000 outlets, was Just Eat a franchise it would rank ahead of Subway as the world’s largest.
We’ve done this by focusing on independents – in a few hours on a Saturday we send over 300,000 orders their way. But we are now open to working with major brands – and as Itsu, YO! Sushi and others have realised, there is an overwhelming case for brands to use Just Eat’s scale to accelerate top-line growth.
There are five big reasons to do this:
New customers: Just Eat gets over 700,000 visits a day to our apps and website in the UK alone (about ten times the footfall at Westfield London). It is essentially a busy digital high street, exclusively for restaurants. The vast majority of these visits occur at dinner time. In other words, people are not researching a future purchase – they are hungry and choosing what to eat right now. Only brands visible on the Just Eat digital high street are part of the consideration set for these consumers – and many of those that do feature find it their largest source of new customers.
Relevant demographics: Just Eat is now a mainstream consumer brand, used by one in ten adults in the UK. Contrary to the perception of some, they are not “downmarket” – over half of Just Eat users are A/B/C1s. People from social grade A (“high managerial or professional”) alone spend over £200m on Just Eat each year. 80% of target consumers see us as a mass-market consumer brand, and brand affinity is one of the main reasons people use the service. Because of this, our restaurants range from quick service to Michelin star. Whatever demographic a brand serves, a sizeable chunk will be using Just Eat.
Attractive margins: Seven out of ten customers who visit Just Eat don’t order through us. They use our site as a directory to browse menus and make their offline dining decision. Then they visit the restaurant in person, or call. We only charge our commission on orders directly placed through our products. That rate itself is far lower than other high footfall environments (many airports charge over 30%). And of course digital is an inherently high margin channel, with lower cost to serve and higher average order sizes than offline channels. All of that adds up to margin improvement as well as top line growth for brands on Just Eat.
Customer ownership: The delivery service determines how food is presented, whether it arrives hot or cold, how long customers have to wait, how they are spoken to, and who gets to brand the experience. So it is understandable that brands that are serious about growing delivery insist on controlling what happens to the food all the way to the customer (just as they wouldn’t dream of outsourcing front-of-house service). At Just Eat we embrace this – we love the diversity of our restaurant base, and have no desire to own the experience or impose our brand.
Flexibility: Our technology enables operators to control the days of the week and times of day when they feature on Just Eat – to avoid periods where kitchen capacity is constrained by eat-in customers, for example. Because we are big enough not to be dependent on any one brand, we’re comfortable with the idea that operators control when they drop on and off.
Aside from all the above, the defining feature of Just Eat at the moment is growth. Many of our 15 markets are expanding by over 100% year-on-year, some by over 200%. Customer growth is increasing far faster than the number of outlets – meaning the revenue each restaurant makes is constantly rising. So although the case for listing on Just Eat is strong today, it will only become more compelling over the years to come. As mentioned, daily UK footfall is the equivalent of ten Westfields today – but we plan to add many more.
Adrian Blair is chief operating officer at Just Eat. His email address is Adrian.firstname.lastname@example.org
The Christmas opportunity by Glynn DavisChristmas is still some nine weeks away but the other evening I had a taste of what is coming over the horizon. Having a post-work “meeting” on a Tuesday evening at the Old Fountain pub in Old Street would have been a relatively relaxed affair despite the place’s beer selection proving increasingly attractive to itinerant drinkers.
But it wasn’t, because a large group – part of an organised gathering – had shifted from the room they had initially commandeered into the main bar and made it nigh on impossible for anybody to get to the counter to order. This is what it will be like in many bars and restaurants in the run up to December 25. I know from my own diary that I’ve some early “festive” drinks already arranged for late November – so not exactly long to wait for that then.
Now, I’m far from being a Mr Scrooge and I reckon I enjoy Christmas more than the average adult but when it comes to its impact on the leisure and hospitality industry it certainly has its downsides and I’m now fully in preparation for the onslaught. My chief moan is to do with the customers. Christmas unfortunately brings out far too many part-time pub-goers and diners.
I find they have similarities to Sunday drivers who have the ability to get into the bar but then don’t quite know what to do once inside. There is often a total misunderstanding of bar etiquette (and I won’t even go near the issue of their alcohol tolerance levels) that can make the most typically calm of pubs a nightmare for regulars during the month of December.
The best example of ensuring your most loyal customers are not crying into their glasses at Christmas was delivered in a pub I used to frequent almost every lunchtime, when working in the City of London. The long-standing landlord of the East India Arms (then a Young’s boozer and now with Shepherd Neame) would distribute key rings during the month of November to his loyal regulars. Once you had one of these prized possessions in your hands it was your pass into the pub during the fortnight before Christmas.
It was like winning the lottery when you were given your key ring. This modest measure ensured this tiny pub could continue to deliver its exemplary service at its busiest time of the year. Looking back this might have been a bit harsh for the key ring-less who found no room at the inn but the landlord clearly knew that offending one-off visitors was far outweighed by the goodwill he generated among his regulars. ie the ones who ensured he could pay his rent all year round.
What also descends upon us at Christmas time is the decision by many venues to restrict their dining offer to set festive menus. I fully understand that it is a tough time for restaurateurs dealing with large groups and that limiting menus and insisting on pre-ordering your choices is not really a problem. What I do begrudge is when these menus seem to deviate too far from the raison d’être of the restaurant. This seems to make no sense because the opportunity for the venue to showcase its food to many people who have not visited before but who might do so in the future if they are impressed is completely lost.
The worst example I encountered was in a Spanish tapas restaurant (whose name I cannot remember because I’ve tried to eradicate it from my memory). Not only was it a restricted menu for group bookings but also it was traditionally English with turkey and all the trimmings along with other typical domestic alternatives. Not a sniff of any croquetas de jamón, chorizo or frittata alas.
At least the place had the sense to delay the food arriving at the table for so long that its customers had glugged so much cheap company-funded Rioja that they had forgot all about the food. The only thing to appear for a number of hours was hummus and baskets of French stick. At least it was consistent in delivering no foodstuff with anything whatsoever to do with Spain.
This is an example at the extremity but the reality is that deviations from the norm are undertaken by far too many restaurants around Christmas. Maybe a lesson should be learnt from the most high-end of venues, which change virtually nothing over the festive period – except for the décor. There are reasons that they are regarded as the best in the game – they know why their customers visit them and that’s exactly they give them Christmas or no Christmas.
Apart from that I can’t wait for December. Only 49 days to go until the big man makes an appearance.
Glynn Davis is a leading commentator on retail trends
My renewed appetite for healthy food by Ann ElliottI normally go trekking for charity every other year with past treks including Brazil, India, Patagonia, Costa Rica and Tanzania and Namibia and Kerala on the hit list. They give you time to think and to plan particularly when you are walking steadily and rhythmically listening to nothing but silence and seeing nothing but the land around you. And there isn’t a better way to start the day than camping out in the wild, in the middle of nowhere and waking up to a group of Masai children outside your tent singing, dancing and laughing in the sunrise.
This year however my girlfriend decided we should do something less strenuous and suggested a yoga retreat in Ibiza for a week. I should have resisted but sunshine won over cold, toilets won over long drops and flip-flops beat walking boots. And I thought we might have marginally better food than the vegan fayre normally served when trekking.
I was right about two out of the three. We had sunshine and walked around in bare feet but the food was vegan. No caffeine, no sugar, no dairy, no gluten and not much alcohol. I had the most awful headaches for the first three days and downed Solpadine as if it was Pinot Noir. Not quite the health drink I thought I was going to be enjoying.
After three days the fog and headaches started to lift. The 7.30am yoga class on the sundeck seeing the sun rise over the ocean became appealing. I started to think five hours of yoga could be a joy instead of a bit of a bore. And lemon and ginger “tea”, whilst not quite as moreish as a latte, began to taste quite refreshing. We had talks on meditation (where I fell asleep sitting up), a session on diet and a multitude of classes including Indian head massage, acupuncture and reflexology. And lots of time to relax and think (no clubbing).
I have been back for three weeks and have kept up a generally sugar, gluten, dairy (more challenging) and caffeine-free lifestyle (with the odd glass or four of wine) and whilst I wouldn’t go as far as to say I feel like a different person (it would take a bit more than a week in Ibiza for that to happen), I definitely feel much healthier and more energised. Going to bed more often at a decent time and actually going to sleep has been a bit of a revolution.
Now I look for food that will do me good and help me feel good and search for fresh, unprocessed and hopefully, organic, ingredients. All manageable if you shop at Waitrose and have a brilliant husband who cooks every night (Helmsley & Helmsley is a fantastic book to use for recipes and GUT! a fascinating book to read) but not so good if you are eating out, which I do quite a bit.
It’s proved a bit of a challenge. A glance at many high street pub and restaurant menus seems to indicate a high percentage of processed dishes. I don’t mind frozen food and don’t see that as a negative per se (actually quite the opposite) but many dishes feel as if they are sugar laden. And vegetarian meals are often heavy with either carbs and/or dairy – vegetable lasagne being a prime example.
PizzaExpress offers a superb leggera superfood salad with baby spinach with broccoli, beetroot and mozzarella. Ask to have a chef’s salad with smoked prosciutto, buffalo mozzarella, avocado and artichoke. Bella has a roasted butternut squash and beetroot salad. Last night I went to the superb new Oakman Inns pub in Cosgrove and had a brilliant grilled seabass with vegetable ratatouille – hot dishes are a bit harder to find but they are there.
Of course, offering vegan/vegetarian food is the norm now and I suspect meals with less sugar may start appearing on menus. Hopefully menu development will begin to focus more heavily in the future on food that does you good – I hope so.
Ann Elliott is chief executive of leading sector public relations and marketing firm Elliotts