Cloud-based restaurant management platform POSist has introduced an online ordering system for restaurants and cloud kitchens to enable direct-to-consumer (D2C) channels through the in-house websites and mobile app.
The latest offering will be an add on to the restaurant management system already offered by the company. The company believes that it will help in incremental revenue and give a strong retention factor to customers.
POSist’s offering is set to help repeat and loyal customers of restaurants and cloud kitchens and for large brands that can pull customers through their own direct marketing. The D2C channel will also allow POSist’s clientele to set up their own digital storefront, customise the guest experience, manage online orders, and open new revenue streams in addition to third-party networks like Zomato, Swiggy and other aggregators. Ultimately the platform will enable restaurants and cloud kitchens to adapt to the new normal of dining, the company said.
Talking to Inc42, POSist’s cofounder and CEO Ashish Tulsian added that its clients had been looking for such a solution as an alternate revenue stream. He elaborated that before the pandemic, restaurants had capital flows from online ordering and dine-in. However, the pandemic has stripped restaurants from dine-in revenues almost completely.
Online Ordering System To Enable Alternate Revenue Stream
The restaurants are currently catering to the online orders facilitated by aggregators like Zomato and Swiggy majorly, but the hefty amount of commissions charged by them does not fit in the restaurant’s business economics. Therefore, POSist’s online ordering system will help them create an alternative stream, where they don’t have to shell out any commissions.
Tulsian has highlighted that the POSist does not think that its online ordering system is a replacement to online aggregators, but an add on value service. “We are not generating business, this is very very important to understand… We are enabling the customers to generate business, we are enabling the customers to generate business which has better margins,” he said.
We are not the reason why they’re generating business. The reason is the customer themselves, their marketing, their brand etc. And aggregators generate business for their customers, they help restaurants get discovered.
Besides, these restaurants and cloud kitchens can either set up their own logistics units or rely on third-party delivery companies like Dunzo, Dominos, Shadowfax and others. Tulsian highlighted that the delivery solutions offered by these third-party platforms are actually more economical than the delivery service offered by Zomato, Swiggy and other aggregators. He also noted that relying on these services would be much better as third party platforms, including Zomato and Swiggy’ logistics services, have managed to win the customers’ belief in more hygiene delivery service.
Business Model Of Aggregators May Give Better Business To POSist
Last year, several restaurant partners backed by associations like the National Restaurant Association of India (NRAI) and the Federation Of Hotel And Restaurant (FHRAI) had launched a #LogOut campaign urging restaurants to delist themselves from the premium services offered by the aggregators like Zomato and Dineout.
The restaurants and hotels had also raised concerns over the commissions charged by these platforms, deep discounting, preferential treatment to certain restaurants and other predatory practices followed by them. The movement had forced Zomato to shut down its Infinity Dining, rethink Zomato Gold services and give away the discounts completely.
Commenting on the same, Tulsian added that the sentiment against the aggregators is definitely one of the factors that will push POSist’s online ordering system because of better profit margins and lead them to a 100% recovery. He noted the restaurants cannot afford to get 100% of their online order through food aggregators as they end up paying a large percentage of their revenues as commissions.
Besides, it will also make the restaurant more accustomed to manage its digital services and get used to this new reality of online ordering. Tulsian also spoke about what’s up next for the restaurant industry across the world.
Are Cloud Kitchen’s The Next Step For Restaurants?
“Everyone will have to move to a brand, every restaurant will have to think of their product as their menu and their name as the brand. That brand will have different manifestations, and one of them is going to be cloud kitchens,” Tulsian said. He believes that no restaurant is going to do a dine-in only model again, there will always be a hybrid approach.
He noted that this is one of the reasons why restaurants need to engage with their customers directly so they don’t end up completely relying on the aggregators to generate business. This is where POSist’s online ordering system becomes more of a value addition for its customers.
“This is going to be an era of trustworthy brands, and cloud kitchens are going to be on the top of it,” he added.
According to Inc42+ estimates, the projected market size of cloud kitchens is expected to reach $1.05 Bn by 2023. The report ads that cloud kitchens are usually dependent on platforms such as Swiggy and Zomato for delivery, awareness, reach and customer experience.
Therefore, the major operational costs such as marketing, discoverability and delivery are being borne by these food aggregators, which does help the brand in the short term. But the pandemic has brought the problems in this system as well. In anticipation of the same, existing prominent cloud kitchen brands like Hoi Foods, Rebel Foods, Box8 and more have also set up their own websites and apps to enable ordering.
Speaking Inc42 cofounder and CEO Vaibhav Vardhan at “Ask Me Anything” webseries, Tulsian had previously added that businesses need to utilise this time to build muscle and develop their products to stay put for whenever the market recovers.
POSist is a leading point of sales solution provider to restaurants with operations spread across six countries and 100 cities.