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The catering industry under the special group buying: the platform makes money by watching dramas, and merchants and customers love and kill each other

author:Titanium Media APP
文 | 餐观局,作者 | 杨泽

"Before you find a seat, find a group purchase package in store. It has become a standard action for migrant worker Xiao Zhang to eat at noon.

From 9.9 yuan for two hamburgers, 9.9 yuan for a set meal with meat, vegetables and drinks, 9.9 yuan for a bowl of noodles to a 44.9 yuan meal for three dishes and one soup for two, 99 yuan for all-you-can-eat meat package, 128 yuan for Xinjiang cuisine with roast lamb leg and large plate of chicken, Xiao Zhang, who has not been on fire since 2022, relied on the 100 family meals purchased by the special group, and lost 10 pounds in the restaurant.

In order to compete for Xiao Zhang, even McDonald's and KFC have begun to lower the price of the main burger and fried chicken, and the ubiquitous 9.9 yuan McSpicy Chicken Leg Burger, Grilled Chicken Leg Burger and even Big Mac Coupons have replaced the original cheap and high-quality 13.9 yuan with 1+1 package, which has become the biggest motivation for migrant workers to enter McDonald's.

According to the rhetoric of the two giants, they contribute a lot of traffic, do not charge money, and even take out huge subsidies to help catering merchants use "special group buying" to attract traffic online, so that hundreds of consumers can walk into the store, taste delicious food, and fall in love with the brand, so as to achieve a win-win situation for catering merchants and consumers.

However, while consumers are enjoying it, the platform has also benefited a lot. Meituan's financial report said that the rapid growth of its special group purchase orders has helped it further strengthen the mentality of consumers with "low prices every day". It is also reported that in the first quarter of this year, the sales of Douyin life services before the write-off exceeded 100 billion, and such a business volume was quickly achieved by relying on huge traffic and low-price subsidies.

The caterers seem to be the victims of this game. If you don't participate in group buying, you can hardly see the flow of customers. Is special group buying really a restaurant nightmare, or is there another solution?

01 Why do you do special group buying?

In a sluggish consumer environment, many F&B brands are struggling to find opportunities to ensure that no deal is missed and no opportunity is missed.

For example, aiming at consumer demand to increase categories, setting up "poor ghost packages" that do not make money or even lose money as promotional offers, capturing the traffic dividends of short videos and live broadcasts, building a membership system and private domain community to maintain old customers, and acting quickly under the guidance of platforms and catering KOLs.....

These strategies are not affordable for every merchant, especially those who lack the time, energy, and capital. For them, engaging in price wars may be the easiest and quickest way to achieve results.

In particular, some beginners who are new to the catering industry enter the market with a "bottom-buying" mentality, only to find that the recovery dividend quickly fades and the balance between supply and demand is broken. In the face of insufficient customers, they can only be coerced and dance with the price war.

At the same time, the platform has also begun to exert force, with the number of users overlapping between Meituan and Douyin as high as 320 million, with an overlap ratio of 81%.

Middlemen and agents are also adding fuel to the fray, luring F&B people to set up special packages for impulse in order to earn commissions in a short period of time.

In their words, the catering market is undergoing a traffic reshuffle, and it is very important to seize the opportunity, it is necessary to use special packages, or even at a loss, to build up popularity, and then make money.

So, the fire of special group buying burned like this. Some unreasonable special group purchases that fall below the "bottom line" have begun to appear frequently.

Some Hunan restaurants do group purchases of less than 5% off to attract customers, and barbecue restaurants have a barbecue package for two people at 19.9. There are also hot pot restaurants that launch 9.9 to 100 yuan coupons.

False propaganda is also beginning to emerge. For example, the quality has shrunk if it is not worthy of the name, and the dishes purchased in the group are "special", which is obviously different from the normal order. Some group purchase coupons cannot be used normally, or invisible consumption thresholds are set.

Not only that, ultra-low discounts attract too large customer flows, often exceeding the service capacity of merchants, which not only causes more than 1 hour of waiting during peak hours, but also affects the quality of service.

Is the special group buy "out of control"? Some caterers are unmoved. They believe that doing special group buying at a loss will basically attract the wool party, and may not necessarily bring new customers.

There are also some who integrate special group buying into their business, and some restaurants will take the initiative to inform the reviews that there are discounted packages after entering the restaurant. There are also stores that build the ordering system directly on the Meituan Dianping system, which is convenient for consumers to purchase and deduct.

No, special group buying is not always a flood of beasts, they are using group buying strategically to increase exposure and foot traffic. The point is that the caterers should settle their own accounts.

02 Catering people should settle their own accounts

The income of most catering businesses comes from the sale of one meal, one dish, one soup and one side to consumers, which is a diligent door in itself, and what they earn is hard-earned money. Internet platforms such as Meituan and Douyin are just a choice of drainage channels and marketing, whether they participate and how to participate, and catering people must have their own accounts.

In fact, some successful cases of special group buying are often supported and created by the platform to demonstrate and attract more merchants to join, and large catering companies have the ability to create content, be able to bear operating costs, and be able to try different ways of playing and combining, which has the opportunity to produce phenomenal effects.

However, for the vast majority of small and medium-sized catering people, it cannot be replicated. It may be necessary to cooperate with a third-party operator, but in the process, it may also encounter the erosion of interests, as happened in the agency operation services in the field of food delivery and live broadcasting, facing the risk of "selling one order, losing one order".

So what should a caterer do?

First of all, in the face of the temptation of platforms and agency operators, it is important to maintain concentration, and at the same time, it is important to avoid falling into unnecessary anxiety when you see your peers on the street doing special group buying and your own turnover is declining.

The one who does a special group purchase may be a new store, in order to accumulate customers, solve the problem of menu rotation and employee morale. It may be that he was in a hurry to go to the doctor, and he was "cut leeks" by the operator. It may also be that the profit is not in the store, but to maintain enough customer flow and build itself into a prosperous store, in order to do "quick recruitment" and "technical teaching", or it may be a "last battle", continue to operate if you do well, and sell it if you don't do well....

Therefore, if you blindly follow the trend just because you see the activities of others, you are likely to step into the trap of group buying.

The decline in store revenue is actually not a big deal. In the case of economic downturn, it is natural for turnover to decline in the face of competitors taking turns. Special prices can bring traffic and turnover, but traffic is difficult to become retention, and turnover may not necessarily generate profits.

Secondly, catering people need to be more aware of their own position and do a good job in expectation management. Meituan and Douyin are both marketing tools and drainage channels, which are more icing on the cake than carbon in the snow.

The success of large companies is difficult to replicate. They have a large network of stores to take on online traffic. For small and medium-sized catering enterprises, it is more necessary to maintain three-kilometer old customers, retain users by products and services, and let users enter the store for secondary consumption.

Special group buying, but mainly to increase additional market exposure, should not be regarded as a master key to solve all sales problems, and the proportion should be strictly controlled when used.

If it is not restricted, relying on special group buying will often attract new customers who can't beat the eight poles. While it can increase traffic in a short period of time, this group of new customers can be difficult to repeat, staff will be exhausted by the surge in customer traffic, and it can also affect the dining experience of regular customers, which can damage the restaurant's long-term reputation and customer loyalty.

Third, any special group purchase requires precise calculations, and not all platforms need to do it.

The setting of special group buying also needs to be balanced, balancing store profits, price incentives for customers, and platform commissions. We need to build a mechanism that "can make money". Once a consumer gets used to unreasonable "specials", he is less likely to accept normal pricing.

By improving efficiency, eliminating waste, cutting overhead, creating value-for-money products and menus, and ultimately increasing turnover, the right path is to do so. Rather than simply selling at a reduced price at the beginning.

At the time of launching, different local life platforms were good, but they weren't suitable for themselves. Some platforms have high conversions, and some platforms have strong presentation. But it should not be done at a loss, nor should it be dependent. Instead, it is necessary to carry out actuarial calculations within the scope of one's own ability according to the stage of development to ensure that it can make money.

Otherwise, it is easy to fall into the quagmire of special group buying, and fall into the vicious circle of "Twitter prices only have customers, there are customers but do not make money, and want to make money and reduce quality".

Han Dong, chief consultant of the Catering View Bureau and catering opinion leader, believes that in today's group buying war, restaurant owners are a real vulnerable group.

Dr. Cao Jianhai of the Chinese Academy of Social Sciences argues in his theory of over-management that if two of the following five conditions are met, it can be considered that the industry has produced excessive competition. Second, a large number of enterprises lose money or are lower than the rate of return on social funds. 3. Difficulty in exiting. Fourth, the supply of the industry is greater than the social demand. Fifth, the price war and advertising war of enterprises mostly adopt the characteristics of "suicide" and "destruction".

In the current competition for catering group buying, almost all of the above five have appeared, which is a typical "excessive competition" industry, which is not a good thing for society, industry and practitioners. The causes are complex and mostly structural. From the perspective of the industry, the conditions for cracking this vicious game situation have not appeared at present, and there is no possibility of it in the short term, which is both a reality and a cruel environment. This is what everyone calls what is commonly referred to as "volume".

From a microscopic point of view, we are in such an environment, and there is no way to change the external environment, but to work hard! Change ourselves! Become the one who survives, for this reason I suggest the following four points:

1. Catering enterprises must create their own unique competitive advantages, products, services, environment, convenience culture, etc., at least one to two directions to break through.

2. It is necessary to have the basic ability to undertake traffic, and if there is no repurchase of the traffic that is bought with money, it is definitely suicide.

3. Will calculate ROI, the catering industry is generally empiricist, will not calculate ROI scientifically, and cannot calculate the income after investment.

4. Keep your cash flow. Once you are in a state of negative cash flow, it is necessary to solve this problem quickly and save cash flow.

In the most painful circumstances, the rest must be the strongest.

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