Netflix For Restaurants?
Image credit: NordWood Themes
Jamie Mah @grahammah
“I think that we’re all here to service the consumer, right? And the eater. And I think eaters today want convenience, they want value, they want flexibility, and they want choice. And delivery offers all of those things. And restaurants choose to participate in delivery. And so if they don’t believe it’s valuable as a channel to connect to their consumers, or maybe new consumers, or reach new people with their brand, then that’s okay. We’re here to provide a conduit between the two. Not to tell them how to run their business.” — Uber Vice President and Head of UberEverything, Jason Droege speaking on the Eater Upsell podcast
If you can connect choice, the greater the opportunity is.
One of the things I’ve come to admire most about technology and more specifically the smartphone, is how they’ve come together harmoniously to make our lives easier. Communication and access with the touch of a button has led so many of us down a path of convenience and accessibility. Information at your fingertips is what many might like to call it.
Facebook tells me how friends I haven’t spoken to in years are now devoted parents. Instagram gives me the insight into how drunk my cousin Dave was last night. Airbnb lets me pick an apartment in the nicest part of Paris. Uber just picked me up in the time it took me to load the app. These are some of the marvels of our new age and how the smartphone, that thing you can’t put down, has made us addicted to the possibility of more. We scroll forever on Netflix before we choose something to watch. Sleep can wait as I watch one more stupid Instagram story.
Connection has given us access to the greatest amount of information the world has ever seen. But then I wonder, with all this service — is the restaurant community missing out on a key opportunity to owning consumer demand? For an industry of thousands, how do restaurants keep up with a world that just might pass them by? Doordash and Uber Eats are small steps but they only cater to one part of the industry. How should restaurants connect with an audience who eventually will long to do everything on their phones? All these questions aside.
Is a Netflix model the only thing restaurants are missing?
Ina recent column I read by Ben Thompson on his blog Stratechery, he talks about Uber’s business potential and how the company is looking to charge its growth with a new model, one centered on the idea of bundles.
**If you’ve never read Ben’s stuff, I strongly urge you to do so, it’ll blow your mind how smart the guy is.
As the article unfolds, Ben pulls an interview from Uber CEO Dara Khosrowshahi on how the company is looking to bundle it’s ride sharing service with other forms of transportation. The quote I put above, from Uber Vice President Jason Droege showcases how the UberEverything division is looking to push in the same direction with Uber Eats. As Ben goes on to state how he sees the market for either of Uber’s businesses developing, his view is one I found interesting and one with a possible opportunity for the restaurant industry.
“This is very much a bundle, and like any bundle, what makes the economics work in the long run is earning a larger total spend from consumers even if they spend less on any particular item. To that end, as Khosrowshahi notes, the real enemy is the car in the garage; to the extent Uber can replace that the greater its opportunity is.” — Ben Thompson
Now think with me about this idea of enemy. For Uber, as Ben illustrates, it’s the car in the garage. For the restaurant industry, what’s it’s enemy? If you ponder that question for a few seconds you’ll quickly realize it’s choice. What Uber wants to do is limit the amount of options their consumers have so that they eventually feel compelled enough, in a good way, to use their service all the time. In achieving this goal, Uber is looking to put themselves in as many useful positions as possible, so that if you’re in need of transportation — anywhere! — they’ll be there to help. Now if you’re a restaurant, your biggest obstacle is what?
Choice. Choice. Choice.
Consumers have way too many options and thus a strong incentive to not pick you. Garnering loyalty the way Uber, Facebook and Google have, has been one and the same — make it so that you’re indispensable and they’ll never leave. They’ve taken choice and bundled it so that you’ll always come back to them. Google could write a book on how to do this. Finding a platform** which helps all restaurants is a good thing. We just need one which brings them all together.
**Yelp is not it.
Cornering the market is the best way to do it. For decades, the restaurant industry has been run the same way. You do good work, they will come. Word of mouth and a good review from Jonathan Gold was generally all you needed. That worked up until about ten years ago.
In 2018, you need more. Uber Eats is one example of a business which couldn’t have existed ten years ago. Same can be said of Instagram. Back then, maintaining a strong social presence meant saying hello to your regulars when you saw them out at the grocery store. Today your Instagram account is a full time job. Staying active and present has become the norm. And it’s only just beginning.
In a different post, Thompson talks about this idea of the internet revolution, one which has and will come to change how we do business moving forward.
“The nature of assets changes as well, and not just hotels: as more houses — and rooms — are offered as a service, the definition of ownership begins to shift. This will clearly first play out in automobiles: the long-run promise of Uber is a world where few own cars and few cars sit idle. This will impact not just auto-makers but insurers, dealers, repair shops, and more. More profoundly, it will affect people. We will be less tied down, more willing to move, especially if our work becomes just as transactional as our possessions.” — Airbnb and the Internet Revolution, Ben Thompson
The key part here is the last sentence. It invokes what we’re beginning to see already, a more aggregate world where service will be offered and the role of assets as ownership lose their value. If, like Amazon and Uber have done already, the restaurant community could develop a third party food service platform where they bundle the nuisance of choice — the growth potential for such a company could be staggering.
Let’s say a food-as-a-service restaurant business model were developed where it deployed real time information for consumers on the choices they had infront of them, saving them time, while helping them choose faster and more efficiently, wouldn’t that be a turning point for the ailing restaurant community?
What if you used a restaurant app similar to Netflix, where it told you who to visit now, what they offered, while also giving you the ability to order ahead of time, and all you paid was a fee to use the service. Would this not be something consumers would desire? You could even pick your table ahead of time, similar to how you would on a plane.
All in real time.
The app and the restaurant working in tandem. The best part is that, like Uber, payment is done with your credit card. No need for a bill. You walk in. You dine. You walk out. As Uber currently does, ratings on both sides of the aisle could take place — game changer for all!
This is only the beginning. The app could offer you so many more incentives, one’s which bundling could help the overall restaurant community. Again, the service could be done in a variety of ways, either in a pay as you go model or like Spotify and Netflix, a flat monthly fee for access.
How convenient would it be to have every restaurant in a city laid out before you like Netflix? You pick. You choose. The more popular the platform, the more restaurants will look to join. Similar to Instagram, they’ll eventually have no choice. But then, is that such a bad idea?
One of the best traits of Netflix is how it helps get your eye balls on those random independent films and tv shows, the one’s you might not have known existed. For a small mom and pop italian joint, this service could help to make their business more prominent. Win-win all around.
The key to all of this is something CEO Dara Khosrowshahi** lays out in an interview he gave to Kara Swisher earlier this year at the Code Conference:
**Her Recode Decode podcast is great by the way. Highly recommend.
“…Just like Amazon sells third-party goods, we are going to also offer third-party transportation services. So, we wanna kinda be the Amazon for transportation, and we want to offer the BART*** as an alternative. There’s a company called Masabi that is connecting Metro, etc., into a payment system. So we want you to be able to say, “Should I take the BART? Should I take a bike? Should I take an Uber?” All of it to be real-time information, all of it to be optimized for you, and all of it to be done with the push of a button.”
*** Bay Area’s transit system
Should I eat here or here?
The app will tell you. All optimized and done with the push of a button.
The internet revolution is here and I see an opportunity for the restaurant community. Could this work for every restaurant style? Maybe. Maybe not. I’m not sure. But the idea is one that needn’t be thrown out. One of the reasons we love Walmart, Amazon and Netflix is how they bring everything we want together. If I want to buy anything for my home, I can probably find it at Walmart. Need a book or an air filter? Try Amazon. Want to watch a movie or a tv show? Head to Netflix. These companies have made themselves indispensible solely based on their ability to make our lives easier. Will it be an opportunity missed or just a matter of time before someone changes the wheel on the restaurant community? I’m not sure. But Uber Eats is a start. Doordash is another example. The bundling of services for Uber is smart model. Innovation will be the key to our futures. Soon the machines will be doing a lot of the jobs we’ve been doing for decades. It’ll be on us to find new ways to keep ourselves busy. I see restaurants as a service as only a matter of time.