18th Apr 16
Bryan Menell wrote very interesting article on Techcrunch today titled “The Greasy Underpan Of Restaurant Tech”. Bryan takes a look at individual problems that startups are trying to solve in the restaurant space and explain why the large value proposition is not there.
We completely agree ! Now, that might seem surprising from someone who is playing in exactly the same field, but we believe a large number of startups are fighting the wrong battle.
Let’s look at the individual problems that are tricky to solve from a value standpoint - POS integration (value to POS vendors ?), Ordering (value to end customers?), Payments (value to restaurants?) and Loyalty (value to restaurants vs customers simultaneously) . Bryan hits the nail on its head when he points out that solving these pain points individually is of no use.
But let’s put it together - POS integration + loyalty + payments.
Value to POS vendors - a cut on transaction sales happening through their POS. This could be a big revenue channel for the largest vendors out there.
Value to restaurants - payments by itself is not sexy, but when you combine payments with the ability to seamlessly integrate bank funded discounts, lean time discounts and cashbacks… what the restaurants gain is new customers. For customers, the value is bloody simple - <span>you dont compete against a debit card… you compete against the cashier</span> (who invariably does not know which discount to apply, whether you are eligible for a discount, does your credit card entitle you to cash back)
Value to customers - painfree applications of discounts and ability to earn rewards for loyalty. customers want an easy mechanism of discovery, payment (with benefits already applied seamlessly) and repeat incentives.
Value to customers + restaurants simultaneously - Loyalty is the big problem here. How do you generate a non-dilutionary behavior amongst rewards for merchants (which means a non-coalition, standalone loyalty), yet not have customers disappointed at lots of individual points at individual locations ? Well, you build a P2P Rewards Marketplace - you now enable customers to exchange the rewards that they dont want for rewards that they want… and for merchants, it is as good as a free new customer !
We at RedCarpet believe disruption in this space will happen through a seamlessly integrated process and a product that customers will love. Solving payments by itself isnt good enough (P.S. Read Mobile Payments is a twist on identity rather than transactions)