F&B industry needs to fight flash sales sites
President and CEO of HeBS Digital (Hospitality eBusiness Strategies, Inc.) Max Starkov explains why restaurants need to fight back against flash sales sites with their own robust online and mobile strategies....
Restaurants are an interesting bunch as far as adopting internet marketing is concerned. Today, after 17 years of commercial internet, a vast majority of them have no idea how it works.
A number of restaurants still do not have websites, and those that do have old, tired, unappealing ones with stale content. Their common flaws include:
• No interactive features like contests, sweepstakes, quizzes or promotions.
• No ‘fresh’ content in the form of recipes, wine introductions and pairing.
• Very few restaurants have mobile website and very few have real-time online reservation engines like OpenTable on their websites, desktop or mobile sites.
• Most have no search engine optimisations or inbound linking programs in place. Google does more than 500 updates on its search algorithm every year – the latest Panda and Freshness updates require websites to have deep, fresh, unique and intriguing content if they want to be considered for a top ranking.
• They have no local search and local directories optimisation in place.
• Most have no SEM (Search Engine Marketing, or paid searches) campaigns.
• They have no email marketing in place; they do not have a blog, blog posting or blog seeding or any social media marketing.
• They have no mobile marketing in place.
• They have no checking (eg Foursquare) or NFC (Near Field Communications) marketing campaigns in place.
• They have not optimised their profiles on customer review sites such as Yelp.
Because of the above, restaurants are easy prey to what we call social buying or flash sales websites.
Restaurateurs should understand that the main reason for the explosion of social buying and flash sales sites is the recession, which has brought the restaurant industry to its knees.
Desperate restaurateurs are easy pickings for flash sales sites, but I stand firm on my assessment that social buying and flash sales sites are a recessionary phenomenon, and not some kind of new, emerging distribution channel that is here to stay.
There is no doubt that as the economy improves, some of these flash sales sites will go away and the remaining players will have a severely diminished role in the restaurant business.
Why? Social buying and flash sales sites such as Groupon and LivingSocial are an integral part of the economy and the supply-demand market equilibrium. For social buying and flash sales sites to exist, there must be market equilibrium between the demand (quantity of engaged social buyers) and the supply (quantity of fresh, intriguing deals).
As the economy and consumer demand improves, restaurateurs are becoming reluctant to participate in these sites because of their ‘open discount’ business model, and are not providing the supply side of the equation with fresh, intriguing restaurant deals.
The result? Both sides of the equation suffer and shrink.
Consumers, disappointed by the lack of fresh deals, will revert back to the traditional restaurant search and reservations via search engines, reservation and review sites.
Therefore, the main focus and priority for any restaurateur in 2012 should be to establish a robust presence of their restaurant in the desktop and mobile internet worlds: enhance or launch desktop and mobile websites; install online reservation engine on both; optimise for SEO; launch paid-search and local-search programs; enhance and maintain your business’s social media profile; optimise its listing on Yelp and other review sites; establish profiles on location-based social networks, and be ready to catch the falling customers.
Max Starkov is president and CEO of HeBS Digital (Hospitality eBusiness Strategies, Inc.), a leading hospitality internet marketing services and strategies consulting firm. Max is a recognised ‘thought leader’ for internet marketing strategies in hospitality.