Since the turn of the millennium, Just Eat has done well to bring new customers to restaurants and takeaways online, but now restaurants need to take the next step to claim these customers as their own. Some businesses are starting to realise this, which may be one reason behind Just Eat’s slowing growth, as seen in last week’s Full Year Order Update.
As an aggregator it has helped restaurants take a first step to engaging with customers online and through mobile. Before, too few hospitality businesses had a mobile ordering offering, even though almost all consumers nowadays have smartphones and expect to be able to interact with their favourite companies through it.
However, it does not go far enough. We see Just Eat as the first generation of digital solutions for hospitality businesses, established during the dot com boom, but the industry is now ready for the second generation. Businesses are under pressure to find an alternative to using aggregators. This is where a proprietary mobile and online ordering solution becomes the logical next step.
Where Just Eat falls down compared to an in-house solution is both its business model and the lack of insight and control it offers to clients. Paying commission to Just Eat, as a way to grow your customer base and encourage diners to discover you, works, but it severely cuts into margins in the long run. Moreover, aggregators like Just Eat don’t help companies grow sustainably through making their customer base loyal. Most people don’t remember the brands they interact with on Just Eat, they only remember Just Eat.
A proprietary solution, on the other hand, means that the company can gather and keep its customer data. Having their own platform is more financially sustainable for restaurants, either by building it themselves, or paying a monthly subscription for the platform and support service. Realistically, many organisations do not want to spend the money and several years developing a platform and this is when an external provider with a tried and tested platform can provide an ideal solution.
Of course, many businesses will still want to use Just Eat to attract customers, but they should also consider what the alternatives can bring. Soon, online and mobile ordering will be the norm for the hospitality industry and those without will be left behind. The retail industry has made the transition from analogue to digital and while the hospitality industry lags behind, we expect that due to customer demand in a few years it will have caught up. Now is the time for brands to get ahead of the competition.