Food for thought – A new road for F&B
As the preferences and lifestyles of their customers shift, F&B operators everywhere have been forced to shatter the veneer of traditional retail. Today’s consumer is busier, has a shorter attention span and heavily dependent on technology – opening up a new, phygital landscape where physical and digital experiences intersect.
09 Apr 2020
The start of 2020 has brought with it headlines flooded with downgraded figures across most sectors – so it doesn’t take a rocket scientist to understand how the spread of COVID-19 across the globe has hampered the retail industry. But, when we look at F&B in particular, what’s been promising to see is how individual operators have maneuvered the situation, rethought and reconfigured – in fact, this new journey started long ago. From our perspective, there are several key trends which will stand the test of time and remain in place once business activity normalizes.
As the preferences and lifestyles of their customers shift, F&B operators everywhere have been forced to shatter the veneer of traditional retail. Today’s consumer is busier, has a shorter attention span and heavily dependent on technology – opening up a new, phygital landscape where physical and digital experiences intersect.
Marks & Spencer (M&S) standalone food stores across Hong Kong and, just recently Singapore embody the intersecting worlds of physical and digital (“phygital”) retail. Here, there is no shortage of choice. Aside from M&S branded groceries, these stores offer on-the-go coffee, breakfasts and lunches, and everything from the menu to the payment process is digitized. M&S also partnered with their financial services partner to create a chatbot function where customers can pre-order coffee and pick-up on arrival. A digital payments system is then used to complete the order. The digitization of ordering and paying is not only useful in helping us comply with today’s social distancing requirements – it will transcend the current crisis, cutting waiting times and giving vendors more insight into their customers.
The phygital infrastructure also increases the visbility of data, creating opportunities to offer new products and unveiling new market segments. For example, having access to purchase history data allows vendors to understand the psychology behind their customer’s purchases – creating benefits not only for inventory management but also in tailoring products to customers (e.g. based on information about allergies and other preferences). Likewise, food delivery platforms can tap into data in a similar way to understand which of their vendors is outperforming, and better understand trends relating to peak hours, order quantities and more.
Phygital F&B is not only about digital ordering and payments though, there is a larger development at play which will reshape the logistics sector in years to come. Online grocery shopping is another hallmark for phygital F&B. The world where items from the supermarket shelf can arrive at your doorstep without there being any exchange of cash or human interaction, for that matter, is already a multi-billion dollar industry steered for further exponential growth. Its footprints will be largest here in Asia Pacific – with China and India leading the way.
To illustrate the resourcefulness of online grocers during the COVID-19 outbreak and its ensuing labour and delivery bottlenecks, delivery trucks would deliver goods to pick-up points in residential areas by HKTv mall, a key e-commerce platform in Hong Kong. Elsewhere in Singapore, the loosening of taxi and private car regulations has allowed these cars to provide food delivery services – maximizing their utilization rate during this period and alleviating any shortages in delivery staff. Drive-thru services have also performed especially well during these times. Going beyond F&B, there is room for community shopping malls to provide similar solutions to serve their residential catchment. Phygital retail is an expanding sphere, and creative operators who can adapt to change will stay ahead of the curve.
In the F&B industry, the shift to online ordering, pick-up delivery services will be pivotal in maintaining quality. During peak hours, processing online orders in store may hamper quality and spread labor too thin. For casual dining and fast food operators, centralized kitchens can be setup to handle peak hour orders. Products catering for delivery-only purposes could also become more prominent. The success of these new features will hinge on vendors’ ability to ascertain the preferences of their client base – and vendors in Hong Kong have been keeping a pulse on their end users by offering recipes and cooking kits, providing another channel through which they can gauge customer tastes.
The future of retail will see stronger partnership between the F&B world and digital payments systems. The resumption of normal business activity levels will not be met with the disappearance of omnichannel F&B – it is ingrained in our future.
Disclaimer:
The views and opinions in these articles belong to the author and do not necessarily represent the views and opinions of CBRE. Our employees are obliged not to make any defamatory clauses, infringe or authorize infringement of any legal rights. Therefore, the company will not be responsible for or be liable for any damages or other liabilities arising from such statements included in the articles.
As the preferences and lifestyles of their customers shift, F&B operators everywhere have been forced to shatter the veneer of traditional retail. Today’s consumer is busier, has a shorter attention span and heavily dependent on technology – opening up a new, phygital landscape where physical and digital experiences intersect.
Marks & Spencer (M&S) standalone food stores across Hong Kong and, just recently Singapore embody the intersecting worlds of physical and digital (“phygital”) retail. Here, there is no shortage of choice. Aside from M&S branded groceries, these stores offer on-the-go coffee, breakfasts and lunches, and everything from the menu to the payment process is digitized. M&S also partnered with their financial services partner to create a chatbot function where customers can pre-order coffee and pick-up on arrival. A digital payments system is then used to complete the order. The digitization of ordering and paying is not only useful in helping us comply with today’s social distancing requirements – it will transcend the current crisis, cutting waiting times and giving vendors more insight into their customers.
The phygital infrastructure also increases the visbility of data, creating opportunities to offer new products and unveiling new market segments. For example, having access to purchase history data allows vendors to understand the psychology behind their customer’s purchases – creating benefits not only for inventory management but also in tailoring products to customers (e.g. based on information about allergies and other preferences). Likewise, food delivery platforms can tap into data in a similar way to understand which of their vendors is outperforming, and better understand trends relating to peak hours, order quantities and more.
Phygital F&B is not only about digital ordering and payments though, there is a larger development at play which will reshape the logistics sector in years to come. Online grocery shopping is another hallmark for phygital F&B. The world where items from the supermarket shelf can arrive at your doorstep without there being any exchange of cash or human interaction, for that matter, is already a multi-billion dollar industry steered for further exponential growth. Its footprints will be largest here in Asia Pacific – with China and India leading the way.
To illustrate the resourcefulness of online grocers during the COVID-19 outbreak and its ensuing labour and delivery bottlenecks, delivery trucks would deliver goods to pick-up points in residential areas by HKTv mall, a key e-commerce platform in Hong Kong. Elsewhere in Singapore, the loosening of taxi and private car regulations has allowed these cars to provide food delivery services – maximizing their utilization rate during this period and alleviating any shortages in delivery staff. Drive-thru services have also performed especially well during these times. Going beyond F&B, there is room for community shopping malls to provide similar solutions to serve their residential catchment. Phygital retail is an expanding sphere, and creative operators who can adapt to change will stay ahead of the curve.
In the F&B industry, the shift to online ordering, pick-up delivery services will be pivotal in maintaining quality. During peak hours, processing online orders in store may hamper quality and spread labor too thin. For casual dining and fast food operators, centralized kitchens can be setup to handle peak hour orders. Products catering for delivery-only purposes could also become more prominent. The success of these new features will hinge on vendors’ ability to ascertain the preferences of their client base – and vendors in Hong Kong have been keeping a pulse on their end users by offering recipes and cooking kits, providing another channel through which they can gauge customer tastes.
The future of retail will see stronger partnership between the F&B world and digital payments systems. The resumption of normal business activity levels will not be met with the disappearance of omnichannel F&B – it is ingrained in our future.
Disclaimer:
The views and opinions in these articles belong to the author and do not necessarily represent the views and opinions of CBRE. Our employees are obliged not to make any defamatory clauses, infringe or authorize infringement of any legal rights. Therefore, the company will not be responsible for or be liable for any damages or other liabilities arising from such statements included in the articles.