Month: September 2021

How to's

Marketing your resto in 2021: Why commission fees hurt your profits

Sep 22, 2021 by jan@zap.com.ph

Two years into the pandemic, we have already become more or less accustomed to the changes COVID-19 has ingrained in our way of life. While these changes are not always easy, today, the conversation has shifted from merely surviving for the time being to thriving under these circumstances in the long term.

For many food entrepreneurs and restaurateurs, the first layer of their pivot involved embracing digital and making their take-out and delivery operations more robust. This often included partnering with third-party delivery apps so their businesses will be “discoverable” on the respective platforms.

However, we are realizing now that while third-party providers served a purpose early in the pandemic – apps were a good way for one’s food business to remain relevant – it is not exactly a sustainable strategy. Third-party apps help you survive but not exactly thrive.

How app fees damage profits

Admittedly, when we were all grasping at straws to find quick ways to save our food businesses amidst months of lockdown, joining a reputable delivery app was a godsend.

For one, they already had the tech in place to automate processes. They already had riders. And most of all, they already had people using their apps, meaning there was an assurance that hungry customers were bound to encounter your food business, in one way or another.

However, third-party apps demand commission fees ranging from 20-25% in exchange for the short-term comfort they provide. For a small food business struggling amidst a pandemic, this isn’t exactly a friendly rate.

Let’s put things in perspective. In pricing menu items, food entrepreneurs already factor in a profit. The strategy here is to charge enough to earn but make the price friendly enough for your target market. However, add a 20-25% commission fee from a third-party service, and chances are you’d have to choose between who’d take the blow: the customers or your profit? Would you raise your prices or take a cut from your earnings?

This is a crucial decision for many restauranteurs and food entrepreneurs. But this doesn’t always have to be the case. There are alternate paths to thrive under the current challenges that do not demand you pick one over another.

Customer service leading to greater returns

As we mentioned, while third-party providers do serve a purpose in helping your food business’ discoverability, ultimately, it shouldn’t be your be-all-end-all strategy. We’re not saying you should cancel your partnership altogether. However, It shouldn’t be your primary source of sales too; this way, commissions wouldn’t eat too much into your profit margins.

Think of delivery apps as merely the top of the funnel. They are middlemen that lead people to your business. You don’t want your customers to build a relationship with the middleman! They should only serve as an introduction. After being led to you, it should be your responsibility to keep them coming back. Make the service personal – because personalization is the one thing a business couldn’t achieve via a third-party provider.

You can look into creating promos and discounts unique to your business and not reliant on the mandate of the apps. Building a loyalty program is also another way to keep your best patrons engaged, that is not available via a delivery app.

E-stores are the solution

In your digital transformation journey, having an E-store strikes a balance between automation and personalization. 

A service like ZAP E-store can handle both the set-up and integration of your e-business, whether you have an existing app or not. It reduces the need for manual coordination by streamlining processes, from order taking to inventory management. It also gives you the flexibility to accept both online and manual payments.

What makes having an E-stores truly special, though, is that it shifts the control back to you and away from a third-party provider. An E-store is the closest experience to running your restaurant, albeit online. 

You get to integrate your own promos and discounts in whatever way you want to, whenever you like to. You get to actually see who of your customers are the ones that keep coming back and reward them in the process. And, you can do all this without the stress of thinking of exorbitant commission fees. 

All these lead to higher profit margins altogether.
If you want to learn more about why 200+ F&B stores trust Zap, visit their website via this link.

Photo credits: Background photo created by benzoix | Background vector created by rawpixel.com

Food Industry

How these restaurants made it big despite the pandemic

Sep 22, 2021 by jan@zap.com.ph

There is still no concrete data on how many restaurants were severely affected or closed down due to the COVID-19 pandemic. However, walk down any Metro Manila pre-pandemic food spot – whether that be Poblacion, Kapitolyo, or Maginhawa – and the number of “For Rent” signs you’ll come across would be enough to paint a picture.

“Our brands, King Sisig and Bulalo World, were hit hard by lockdown,” said Rafael Nemeno, owner of Royal House Food group. “Our business was primarily based in malls and relied heavily on dine-in revenue,” he explained.

Nemeno’s story is just one of many. The government’s closing of public venues during the early days of the pandemic, as well as the consumer preference to stay indoors even when safety regulations were finally relaxed, forced entrepreneurs to pivot. It was an “evolve or perish” scenario. And this evolution, for the most part, involved embracing digital.

Digital transformation pain points

According to Forbes, globally, 6 out of 10 businesses digitally transformed their businesses. This ranged from accepting online payments to setting up their own websites and e-commerce platforms. 

For Rafael Nemeno, at least for his group, their digital transformation had to go back further. It also required them to rethink things from the ground up; they had to adjust their menu. They came up with frozen food pack versions of their best-selling dishes like bulalo, sisig, crispy tawilis, and kare-kare. Of course, these pivots would be all for nothing if they didn’t use technology to make their food available to the people.

Nemeno, now operates ayosbusog.com, an E-store powered by Zap, which allows Filipinos to order their favorite Filipino food for pick-up or delivery.

Amare La Cucina, a famous Italian restaurant located in the Kapitolyo food district, found themselves in a similar predicament. They also had to switch operations to focus on deliveries and pick-up since dine-in was not allowed during the pandemic.

However, their pain points came in their chosen method of adaptation. Early into their journey into digital transformation, Amare La Cucina took orders via phone and Facebook Messenger. According to Tristan Tio, co-owner of the Italian resto, this led to frequent back and forths between their representatives and customers.

Tio and his business partners also tried their hand at the delivery app route, but they found a huge chunk of their income going into the apps’ fees.

Today, both owners still use food delivery apps but mainly just to boost customer discovery. They found better success in doing in-house deliveries.

“[When we set-up our own E-store] we got a lot more in-house deliveries. This saved us a lot from the commissions that the apps get,” explained Tio. “Since we posted about our site on social media, most of our orders would go directly to the website.”

Success in E-stores

Both restaurateurs Nemeno and Tio attribute their success to their E-stores. For Nemeno, the convenience of removing manual processes like inventory management and delivery coordination helped their efficiency, boosting the overall customer experience.  

“Zap E-Store helped us build this website. Powered by their technology, our customers are able to conveniently schedule their orders with complete delivery addresses and details up to the hour,” explained Nemeno.

On the other hand, Tio couldn’t hide his happiness when talking about Amare La Cucina’s website. “I think the site being user-friendly was a come-on for most guests, and perhaps that resulted in additional orders,” he expressed.

Coming from their stories, both restaurateurs agree that they genuinely enjoy the benefits of customizability with their E-stores. They get to exercise ownership in how they want to operate their shops. Aside from the efficiency and higher profit margins, they can implement their promos, discounts, and loyalty programs.

For them, an E-store feels more than just a website. An E-store is the closest thing to running your own actual restaurant online.

For restaurateurs looking to digitally transform their business in a way that’s efficient and effective in building loyalty, you can check this link to learn how to set up your E-store: https://www.zapestore.com.