I have been pondering on this question all week.
Like take-out order aggregators, there is an ever growing river of these types of aggregators for catering as well.
It’s so interesting, if you really think about it. Why is it that the aggregators can begin to differentiate themselves amongst each other (takeout vs catering) yet, operators cannot internally differentiate their services between the execution of catering vs. takeout orders, at the unit level? They just are not there.
The aggregators understand that the consumer wants a relationship with a real person, when it comes to catering. Selling happens at the personal level while service, well, in catering they want a predictable, reliable and repeatable experience.
I decided to ask our multi-unit customers what their view is regarding the “value-add” of aggregators for catering.
No two answers came back the same. What did come back was that any brand with a clear catering strategy across their infrastructure remain uncertain if aggregators add value or not. In addition, Technomics suggests that consumers do not trust aggregators and when possible, for catering, they want to deal with the brands directly.
So I thought to myself, (as sometimes I do) that the power of our brands, once strategically aligned, will not necessarily see the value of services that aggregators might bring.
Any brand that has a catering strategy and assets, may want to just handle sales and service themselves. They may not trust aggregators for their brand.
Saying that, if a “catering aggregator” can find a way to differentiate by adding value added services, it’s possible that they might stand a chance in the long run; but, they really would have to define services. Here is a list of some items I would focus on if I were a catering aggregator (which I am not!)
1. Handle direct sales for the brand. I do think the bigger brands will not go this direction in the long run. However, there are almost 1,000,000 restaurants in the US and 87% of those are independents. I would focus my efforts there.
2. Call centre services. This can be a good value add. Again, I believe most big brands will want to do this internally, or they may outsource to a super sophisticated provider. That’s going to be tough to compete with. Independents cannot afford these services, and so for them it makes sense.
3. The restaurant vendors on the aggregator site will have to be of high quality. I would stay away from brand names and focus my vendor list in local markets on high volume, high quality, independents.
4. I would value add by extending training to the unit operators. All things Catering.
5. To be successful as a Catering aggregator, you will need to drive site traffic. Only then will you be able to justify the revenue model of advertising.
6. You need to create visible conversation on your site amongst consumers.
7. You will need good technology to create a streamlined service process.
The long and short of it is that the days of taking commissions off the top of the order, will run dry. It’s simply too expensive for operators, cuts into their margins and is not a sustainable revenue model.
My opinions. You don’t have to agree. I’d love to hear your comments. Below you can see my thoughts on why catering is not an add on business. This is the reason, I believe, that catering aggregators at the multi-unit restaurant level will not be sustainable as a service in the long run.