Opinion / Don’t let your customers be strangers

JP Then, Founder, Crosstown Doughnuts and Slerp

Hospitality feels like it’s at an e-commerce turning point. Operators are embracing online ordering systems, but the options haven’t always been readily available.

When you’ve got the complexity of a multi-site business offering a range of order types like click & collect, on-demand delivery, future-day orders, catering – and each location needs individual settings – the traditional e-commerce providers, such as Shopify, WooCommerce and Squarespace simply aren’t built to handle such requirements of our sector. They were built for retail, so it becomes a square peg in a round hole scenario. 
 

I went down this rabbit hole journey back in 2015 in the early days of establishing Crosstown. We had a vision of building an omnichannel business and wanted to invest in our direct-to-consumer (d2c) digital channel to work in parallel with marketplaces as we believed it would be the future. But the technology wasn’t appropriate, so we went on a journey of solving a problem for Crosstown, with the view that this would also be useful for other operators as well. This became known as Slerp. 

Between 2016 and 2019, the Slerp journey commenced with a lot of research, testing and building. We did tens of thousands of orders with Crosstown, which gave us a steep but vital learning curve. Slerp launched to market in late 2019 so that other operators could use the platform, a few months before the world changed with the pandemic. 

One of the biggest learnings we’ve had, and a fundamental point that should drive your e-commerce strategy, is that 30% of customers make up 70% of your revenue. In fact, for coffee shops, it can be more like 20-80 or even 10-90. 

That’s why hospitality businesses must focus on keeping the 30% in their ecosystem. 

Rewarding with a loyalty scheme for digital orders becomes essential when you realise this. Yet offering loyalty is only one piece of the puzzle. 

Operators need to consider how they get to know who that 30% are. For example, our businesses really only have four revenue streams: 

• Walk-in (we don’t know who they are) 
• Bookings (we know via booking platforms) 
• Third-party marketplaces (we don’t know who they are) 
• Direct e-commerce (we know who they are)

Focusing your energy on building channels that provide customer data is key to a long-term digital strategy. It’s absolutely key. 
 

There’s a massive emphasis in the market about using customer data – a phrase that gets thrown around a lot. Having worked with hundreds of hospitality brands, from SMEs to large enterprises and international businesses, we’ve found that most don’t know who their customers are. So, the first phase is not about using data, it’s about gathering it and focusing on establishing the channels that allow you to get it.  
 

“As operators we need to focus on knowing who our customers are and communicating with them” 

Back to the loyalty point: customers are telling us they want them. Recent Slerp research with KAM Media found that 93% say the availability of rewards influences where they ordered. Eighty four percent said they were more likely to spend directly online if rewards were available and 80% said rewards would make them spend more. 
 

The biggest coffee chains in the UK – McDonald’s, Starbucks, Caffè Nero, Costa Coffee, Greggs – are all already embracing e-commerce technologies and investing heavily to enable customers to order direct and claim rewards. 

But the good news is that this capability is no longer restricted to large international businesses with deep pockets. SMEs and the midmarket can now achieve the same capabilities with technology like Slerp. 

In the next few years, I expect to see significant uptake of e-commerce technologies by operators, coupled with a change of mentality to being more data driven. Hospitality has traditionally only embraced functional, operational technology such as POS, payments and rostering. The industry is now starting to think about the end customer and what they want. 

A Crosstown store in Oxford, UK

As for Crosstown, we remain very much on the same journey of being an omnichannel brand. We are coupling our roll-out of locations with online ordering to capture the 30% that really matter. We have web-ordering via our website, a native app, both with integrated loyalty and all the order types from on-demand through to nationwide pre-orders – it’s an ecosystem that can scale with the broader business, and our customers. 
 

Our reward scheme is simple – £1, one point. Get 25 points, get a free coffee. Get to 50 points, get £5 off. It works, people love it, and they keep coming back. 

And we remain on the marketplace Deliveroo. It is an important channel for our business, but our d2c channel is bigger, gives us much more configurability, control and of course, data. 
 

“We’re habitual creatures, and most customers buy the same things every day”

Thinking back to the pandemic, having Slerp was key to our survival. Our store revenue dropped to zero, but we saw significant channel shift to d2c ordering. We managed to maintain our revenues despite having locations closed. Having a system like Slerp was key to our survival and remains a vital component of Crosstown’s omnichannel strategy. 

We’re habitual creatures, and most customers buy the same things every day, particularly when it comes to coffee. I’m a three-shot flat white and I get that every morning from my local coffee shop, Pavilion. 
 

What Slerp has created for operators like Pavilion is ‘PressPay’, which enables customers to repeat order their coffee without even opening their app, whilst also gaining rewards. 

There’s a long press feature on the iPhone that a lot of apps don’t use. If you hold down the app, it brings you to shortcuts and one of those is ‘repeat last order’ that then takes you straight to Apple Pay. 

It’s literally a five second checkout, which makes it extremely sticky to the end customer and they know they will get their points. Most importantly, it shortcuts the monotonous ordering process at the till and Pavilion staff can now start having meaningful conversations with customers when they walk in-store about new beans or products. Or the customer can simply grab the coffee and go.

Useful innovative features like PressPay will become more common – solutions that customers love that create repeat custom. 

As operators, we need to be focused on building an omnichannel presence and thinking about the channels that capture customer data. 

Focus on the repeat customers and gathering intel on who they are – don’t worry about fully harnessing the data yet, that is stage two and much easier when you are data rich. 

Most importantly, make sure you choose the right technology to build your omnichannel presence. Choose technology that can scale as you scale, that enables the order types that you want, and helps you keep those loyal customers coming back for more. You’ve got to think long-term, so choose wisely. 
 

This article was first published in Issue 13 of 5THWAVE magazine.

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