The new digital normal for F&B operators

Ooi Boon Sheng, Web Bytes CEO

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Food and beverage (F&B) outlets cannot rely on takeaways alone but in the new normal that requires social distancing until the Covid-19 virus is brought under control, many will have to do just that. To survive, they will have to adapt their businesses and pivot quickly, says Web Bytes Sdn Bhd CEO Ooi Boon Sheng.

He tells Enterprise in an interview that it will be hard for F&B operators to survive on takeaways alone as they are still required to pay the normal rentals and order volume is not sufficient to enable them to break even.

Rather than waiting for or even expecting a return to how things used to be, they are going to have to leverage on technology and change the way they operate. For instance, says Ooi, the concept of pre-ordering, doorstep delivery and drive-through pick-ups will be more common as people will want to spend less time waiting in a restaurant for their food.

“We believe that the new normal will stay even after there is a Covid-19 vaccine. This is because people are already adapting to the new technology of ordering via the contactless method,” he says.

In fact, F&B operators will have to change the way they do everything. “In terms of human resources, they will probably need to focus more on customer service delivery staff versus waiters and waitresses as more people will prefer takeaways. They will need to train people to handle online enquiries and food preparation efficiently.”

Look and feel of the actual outlet will also matter less. “Previously, F&B establishments focused a lot on creating a nice ambiance for their shop. This will need to change too. Now, they need to focus more on creating an easy and convenient-to-order online shopfront for their customers.”

And instead of relying on food marketplaces, he says, which are flooded with many competing options, they should think of investing in developing their own online presence. “Furthermore, marketplaces generally charge between 25% to 35% commission on the total food price which leaves the F&B operators with very thin margins.”

The smaller F&B establishments which relied heavily on walk-in customers and did not already have an online ordering platform, took a big hit when the Movement Control Order (MCO) started. “We realised that they do not have the digital reach and their food pricing does not make it worthwhile for them to go on platforms such as Grab or Foodpanda due to their high merchant fees.”

This is why Web Bytes, which has been around for the past 15 years and pioneered cloud-based point-of-sales (POS), came up with Xilnex Live, where they don’t have to invest in any POS system hardware as everything can be done by the customers themselves using their own smartphones.

“The solution comes complete with a payment gateway that can accept e-wallets, credit cards and online banking. The bonus is that the F&B operator does not need to pay the payment gateway merchant fees as this is absorbed by Web Bytes. The only need to provide their bank account number for settlement,” says Ooi.

This model, he adds, enables them to go digital at zero cost. “If they need a delivery partner for their food orders, Xilnex Live is integrated with a delivery partner network they can tap into. They only need to pay actual delivery cost and not a percentage of the price of their food.”

Ooi says another thing F&B operators can do is to encourage pre-orders. “Time-based pricing encourages people to buy earlier, spreading the demand throughout the day. To cater for this, the ordering system needs to have the ability to configure different pricing and promotions based on time and days, which is again an advantage that only cloud-based POS has the ability to do quickly.”

What about if they go back to dine-in customers? “That’s not a problem. The F&B operators just need to display a QR code at the entrance. Customers can then order just by scanning the QR code using their smartphone before entering the restaurant or café. Important information such as contact details for contact tracing will also be recorded during the ordering process.”

Ooi adds that the system can be converted to ordering at the table too, where each table has a QR code for ordering and payment. “It is basically a solution covering all types of ordering scenarios in an F&B business.”

But this is not all. Ooi believes that we will see the end of traditional printed menus. “Even when shopping malls return to normal (maybe in the next 12 to 18 months), people will probably prefer to browse restaurant menus or reviews on their phones before entering the restaurants. They will no longer be standing outside a restaurant flipping menus before they enter as all this will be done on their smartphones.”

In addition, the government is pushing for the adoption of e-wallets, which he says completes the whole digital experience. “Previously many people still preferred to use hard cash for payment, especially among the older generation. However this pandemic has forced more people, both young and old, to adopt e-wallets and online banking, for payment. Instead of it taking three to five years to catch on, we will probably see a huge jump in the adoption rate in the next 12 months.”