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Killing two birds with one stone: How to sell retail solutions to hospitality

For companies focused on selling their software solutions into the retail sector it seems like an obvious opportunity to extend this into the hospitality industry, which undoubtedly shares many of the same customer-facing characteristics, so what are the pros and cons of taking this multi-sector approach?

For Oli Johnson, co-founder of on-demand staffing platform Catapult, it seemed like the most obvious thing to do: “We believed we could impact both sectors – with 2.7 million part-timers combined – with only little changes to our product so why would we not do it?”

Although Catapult found that its customers in the two sectors required people with many of the same skills, there are specifics related to each sector and these have had to be built into the solution. “You need service-oriented people in both but we identified specific ‘hard’ skills required in hospitality like pulling a pint correctly and having food safety certificates that are not necessary in retail,” he explains.

Merging of retail and hospitality

Catapult has benefited from the fact that as many as 30% of people on its books work across the two sectors – with customers including Clarks, Topshop, Paul and Japanese restaurant chain K10 – so having a product combining both opens it up to a significantly greater audience, which clearly attracts more retail and hospitality customers.

Another upside is being able to apply the learnings from one sector to the other. “Hospitality has led the way in the evolution of labour productivity and retail is catching up so we’ve been able to be ahead of this trend for our retailer clients,” says Johnson.

Applying the learnings from retail to companies in the hospitality industry is very much where PCMS Group finds itself as it builds-out solutions for businesses that want to incorporate the forward thinking customer-centric approach that retailers have been successfully adopting.

The connected customer

Steve Powell, director of sales, EMEA at PCMS Group, says: “Hospitality has traditionally been driven by front-of-house selling their [food and drink] offer to customers in the restaurant or pub but the mind-set has shifted. They now want to take the learning from retailers and treat customers in more connected ways. They’ve seen us focused on retailers, with connected customers, and they’ve wanted a system to not just sell goods in an outlet but to also better connect with people.”

Working initially with the likes of Krispy Kreme, Whole Foods and John Lewis with their retail/hospitality hybrid models, PCMS has been expanding into pure hospitality with companies like Marston’s.

What the software firm is offering is the likes of loyalty programmes, apps to order at the table, and click & collect where not only can food orders be collected from the outlet but goods from other retailers could also be picked up – which helps attract people onto a site who then might be tempted to have a beer.

PCMS is currently in the middle of roll-out of a solution to a major hospitality company that needed an upgrade to its old system but wanted to adopt the same mind-set as retailers and so it has avoided the regular hospitality system providers and gone with a solution that will give it a differentiated positioning in the marketplace that potentially helps it provide the same level of service as John Lewis.

Powell admits that moving into the hospitality sector has had its challenges and this has been reflected in the changes that have been made to the core retail solution. A notable difference is the way stock is handled: “Systems need to be very accurate on stock levels with recipes, portion sizes, and pints taken out of barrels all involved. This is very different to retail.”

Troughs and peaks

For delivery firm Stuart – which works with restaurant chains as well as Ocado, Sainsbury’s and Krispy Kreme – it decided to adopt a multi-sector approach in its early days.

Nicole Mazza, commercial director of Stuart, says this has enabled the company to better build-out multi-faceted products whereas other vendors who have very much specialised in retail such as Metapack would now find it more difficult to add on a new vertical.

One of the benefits it has enjoyed has been the smoothing out of the demand curve – with retailers typically requiring couriers for daytime deliveries while restaurants will be hitting their peaks of demand in the evening. This in turn has helped Stuart attract better quality couriers.

There have inevitably been different requirements across the two sectors but, according to Mazza, this has not been a problem: “There is never a one-size-fits-all solution for any sectors. It is impossible. You always have to tweak for each client anyway.”

Among the differences has been the fact that for retailers such as Nike and Zara it is all about lowering the unit costs of delivery and having huge coverage whereas for restaurants it is much more about the handling of hot foods as well as having a cold chain in place that will be servicing deliveries within a comparatively small radius.

Having a broader spectrum of customers has undoubtedly helped Stuart more easily extend its reach into new cities and countries and recruit the necessary couriers. It has been a similar scenario for Catapult, according to Johnson, who says: “We are not just an online business as we are also about bricks and mortar. When we go into smaller towns it is much better to launch with multiple employers across multiple sectors.”

However, he is wary of venturing into sectors that are less symbiotic than retail and hospitality. “We’ve been asked about adding logistics and warehousing as sectors but we’ve not seen any overlap with retail and hospitality. When it’s very different industries you need to make wholesale changes [to your systems] rather than purposeful, small changes,” he explains.

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