Three payment trends for foodies to keep your eye on
Fri Sept 21 2018
The food and drink sector moves at such a furious pace it can be really useful to have experts on hand to keep you up to date on the latest trends.
We spoke to Barclaycard Payment Specialist Kat Marangos to find out the most important trends she's identified from her conversations with small businesses in London.
Tell us a bit about yourself.
Kat: I’m Kat Marangos. I’ve been working at Barclays for over 11 years and within Barclaycard as payment specialist for the last four of those.
In my spare time I love practicing hot yoga and exploring the vast options that my fabulous city of London has to offer.
What food and drink trends should we look forward to?
Kat: This is an industry that has evolved massively in the last few years, particularly in four areas:
With third-party takeaway apps booming, restaurants have to adapt to this new way of ‘dining’. Those that in the past solely focused on dining-in services now have to offer these delivery services, otherwise they risk going out of business. And although they have to pay commission to these companies (anywhere from 15% to 40%[i]), they happily take on that extra cost in exchange for access to the massive customer base and advertising reach that these companies offer.
Additionally, newer and larger corporate chains are able to offer speedy ordering and payments through apps, ordering via tablet at the table, etc. These services are required more and more to meet customer requirements for speedy transactions.
As with most industries, food and drink businesses are expected to take cards and offer other, more advanced ways to accept payments and orders (as mentioned above in ‘technology’).
A huge number of restaurants (in Shoreditch especially) are already entirely cashless and proud of it. It sets them apart from cash-only competitors, can offer increased security because they hold little to no cash on site, and makes sure the payment part of a dining out experience is seamless and quick for customers.
Customers tend to do a lot of research on review sites before selecting a restaurant or bar[i], so businesses really need to ensure their customer satisfaction is on point and payments are a big part of that. If it’s the last interaction you have with a customer, it needs to leave the right final impression so that customer is more inclined to visit again and recommend to friends.
On top of that, consumers in the last 10 years are more likely to hunt for a deal or special offer before booking a restaurant. That means the businesses I speak to often feel like they need to offer regular deals to stay competitive. This is true even of high-end restaurants that you might not normally associate with special offers.
4. Pop ups and other innovative concepts
Pop-ups are everywhere these days, especially in London. And consumers now look for something different or exclusive to entice them to book. Restaurants need to keep up by regularly introducing new ideas to entice customers in.
There are businesses making a living by building parks dedicated to food, fashion and arts pop-ups and they’re doing a roaring trade. For some businesses, these sites offer a fantastic way to set up quickly, establish a brand, test new ideas and then stay and open other locations, or move on, either to other pop-up locations or to permanent premises. Brixton legend Brian Danclair, owner of Caribbean restaurant Fish, Wings & Tings, is a really great example of growing a food and drink business in this way.
These days, more and more people are focused on healthier living, and restaurants have had to respond by offering healthier options on menus. Additionally, consumers expect to be able to find out the nutritional content of the food easily and quickly. Most restaurants/pubs/coffee shops now clearly display calories and nutritional information on their menus. But equally there are more and more apps designed to find out the nutritional content of your food in a simple scan of the barcode, or even by taking a picture of your plate.
Corporate chains like PizzaExpress are investing heavily on increasing their healthy or low-calorie options, with more and more healthy/vegan/gluten-free restaurants opening. I’ve definitely noticed that a lot of businesses that can’t keep up with this demand are struggling.
Why do you think more and more street food markets are popping up?
Kat: For brand new food and drink concepts, pop ups are ideal. They offer an opportunity to test the market and discover customer responses to their food. It’s initially cheaper, too. Rather than raising a lot of money to pay rent, fit-out and marketing costs, these talented entrepreneurs can invest more in their menus, ingredients and unique selling points. It’s much easier for a business to take a risk with a pop up than with a permanent site with huge overheads.
Consumers are changing the way they shop and eat, especially the younger generation. They want something new and fresh, and are generally less loyal, so will very quickly move on from one place to the next.
The larger pop-up locations, which we’re seeing more and more of in London, allow multiple businesses to share customers. These places tend to have lots of customers who will spend several hours floating about from one pop up to the next. I guess that’s why collaboration between businesses has become such a trend.
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Do food and drink businesses understand how payments fit in to giving people a great overall experience?
Kat: Opinions have changed dramatically in the last few years when it comes to payments.
Historically, businesses begrudgingly offered card payments, usually with minimum spend requirements or a surcharge so they could cover their costs. Now that cash is actually more expensive to take than cards, I’ve seen that mindset change hugely.
Often it’s a simple matter of if they don’t offer card payments, the customers will go elsewhere. I personally don’t remember the last time I carried cash on me in London.
Also, if a business has no minimum spend requirements, customers are more likely to come back and spend with them again (assuming they got a good service and product, of course).
What conversations do you have with food and drink businesses when it comes to payments?
Kat: Conversations are now heavily focused on speed and reliability of equipment, innovative ways to take payments and how to gather customer insights from payment solutions.
Businesses of all sizes are so savvy to the power of data for marketing, branding and personalisation – this isn’t just the domain of bigger food and drink businesses with larger teams and budgets.
It’s been a really fascinating shift to this, from simply discussing what payment solution is the cheapest.
When speaking to customers who don’t understand the importance of payments or how they fit into giving customers great experiences, what makes them start to understand the importance?
Kat: I don’t come across this so much in the food and drink industry now, but when I do the main focus area is how much business they are potentially losing. How the average Londoner might no longer carry cash and expects to be able to pay by card, as quickly and as easily as possible. And how much more business they could generate by being able to offer card payments to customers.
I would also go through figures in more depth. Not all businesses really understand how acquirers actually charge them, and equally how much it now costs to bank cash into your business account.