Partner Article

Discount dining: the future?

Neil Rafferty, founder and CEO of nibblr.co.uk, looks at the discounted dining sector, and asks: is it short term opportunity or the future?

We all love a good deal - and what’s wrong with that? In an economy such as our own, hell, even in times of prosperity, we all look for ways to save money. With the coming of the ‘collective buying power’ of the web, restaurants have jumped on the band wagon and are finding new ways to harness this purchasing clout.

But how can this benefit the restaurant industry? Well, you or I may not want to buy 50 meals – we just want one - but if you can use the internet to find 49 other people who also just want one, then you can buy 50 meals and enjoy the benefits of the economies of scale. The economics of a restaurant means it is ideally suited to discounting as its overheads remain essentially consistent, with staff, lighting, heating etc remaining regular most of the time that the restaurant is open. So the more tables being used, the better!

However, with recent performance issues at Groupon and LivingSocial, one has to wonder if we’re already seeing the novelty of big discount sites wearing thin. Perhaps it’s the persistent email marketing, or the fact that the economy has improved a bit, but most likely we’re simply seeing a fatigue in the trend towards online discounting.

That said, discounting in restaurants is here to stay. The nature of the industry, and the nature of the web, means that the two will continue to work together effectively in the long-term. With the saturation of restaurants, and the rise of online reservations, logic dictates that online book services that also offer discounts, like toptable will continue to flourish.

Branding and style shouldn’t be belittled in this space – think of the garish, impersonal approach of a Groupon, compared to a more sleek and social toptable. These brand values speak to the difference to the consumer of ‘cheap’ versus ‘value’. As austerity eases, and spending on luxuries, such as eating out, increases, so too will brands have to be wary of their offering.

The full potential of restaurants discounting online has not yet been reached, with many only beginning their foray onto social media recently – lagging behind retail, where success on social media and online sales has been long established. Restaurants should start getting wise to the huge possibilities awaiting them in the world of online discounting, which can guarantee full tables and a busy kitchen long before opening time. Promoting the social experience, and the value of spending time ‘offline’ with friends and family, differentiates the approach from that of impersonal and increasingly C2DE-focused discounting sites.

Eating out will never go out of fashion, but the way we book, pay, and approach the experience will dramatically change as the industry becomes more digitally proficient. The question will inevitably be, who will find new and brilliant ways to improve on the dining experience for consumers and restaurants alike? That’s certainly what we’re trying to do at nibblr!

This was posted in Bdaily's Members' News section by Neil Rafferty .