Dealing with dining apps and the discount dilemma

Customers love apps that give them dining discounts. But do these go down well with restaurateurs?
Customers love apps that give them dining discounts. But do these go down well with restaurateurs? PHOTO: EATIGO

SINGAPORE (THE BUSINESS TIMES) - Getting 50 per cent off your meal always sounds like a good deal - after all, it is not about dining cheap, but about dining smart, as eatigo co-founder Judy Tan puts it. That may explain why discount dining apps like eatigo, The Entertainer and new entrant EatPlayLive are growing in popularity here.

Since its launch in 2015, eatigo has seen around 400,000 app downloads, and get about 30,000 new downloads every month.The Entertainer on the other hand, has had "triple digit growth every single year" according to Singapore's country manager Keith Jaggard.

While these numbers prove that consumers still love their discounts, the whirlwind popularity (and subsequent fading out) of the American e-commerce company Groupon - which has recently rebranded after being acquired by the Fave Group - begs the question as to whether such apps are healthy for the restaurants offering them.

eatigo started with about 40 restaurants on their platform in their first year in Singapore, and has now hit about 300. Restaurants range from chains like Swensen's to high-end establishments such as Equinox at Swissotel The Stamford. They focus on bringing customers into restaurants during off-peak hours, with a discount of up to 50 per cent across a restaurant's food menu at certain pre-set times of the day. The service is also available in cities such as Bangkok, Kuala Lumpur and Hong Kong.

Ms Tan recalls that because Groupon gained a reputation for putting restaurants out of business, restaurant owners were much more wary when she first approached them in the early days.

"Once you mention giving a discount, you're thrown out (of the restaurant). Nobody wanted to give discounts. Some said they were running on a tight margin because rental was going up, manpower was getting expensive. The higher-end ones were concerned about looking cheap," she says.

But, as they say, "the proof of the pudding is in the eating".

"There's a big difference between yielding and promotions," she says. "Promotions can cheapen your brand, but not yielding. Singapore Airlines does yielding by having different prices on different days a week. But is it a cheap brand? No, it's not. And an empty table is the same as an empty seat on a plane. It's perishable. Once the plane takes off, you've earned $0 from it."

For Mr Jaggard, The Entertainer's role is straightforward. "We're a marketing platform for restaurants to be introduced to new customers," he says.

"The one-for-one is to get people in. When you've got a discount, the likelihood is you're going to spend more money. Think of us as a vehicle to push that member to that outlet. Once they step inside that door, it's all about them having a great experience and wanting to come back. We can help drive traffic, but it's on the restaurant to do well, too. It's a two-way thing."

The Entertainer started in 2001 as a publishing company in Dubai, selling coupon booklets for local restaurants, hotels, and attractions. It launched in Singapore four years ago, and charged members a S$60 one-year (from January to December) subscription fee which opens up three one-for-one deals on main courses at each of its listed merchants. It had about 150 merchants on board in the first year, and charged S$125 for access to over 400 merchants in 2017.

"Every month, restaurants have overheads like salaries, aircon, lighting. If your restaurant has only  three people in it, how are you paying for your fixed costs? That's what we're about -  incremental sales. We help you put bottoms on seats," says Mr Jaggard.

Some of the restaurants on board The Entertainer include establishments such as Fat Cow, Meat Smith, as well as cafes such as The Bakehouse by Carpenter and Cook.

Emmanuel Benardos, group general manager of the Unlisted Collection finds that The Entertainer does drive volume to the restaurants that use it, such as Meat Smith. "We can measure the number of guests in the restaurant and the number of guests using The Entertainer. It cannot be used on public holidays, so while we do get full-paying people on those days, we also notice a decline in the total number of guests visiting the restaurant. It does affect us."

The challenge however, is maximising redemptions so they are made during the right periods, adds Sofie Di Donato, Unlisted's business development and marketing manager. "Meat Smith is open seven days a week, and mostly these redemptions are made during peak periods. We find that promotions work well, and encourage other diners to order big-ticket items. However it's always a balancing act, with additional pressure on our kitchen team and also the number of discounts given out."

That is why Benjamin Ng, business development manager of the Singapore Marriott Tang Plaza Hotel, explains that they work with multiple platforms - The Entertainer, eatigo, as well as reservation-focused platforms such as Chope. It all comes down to the individual restaurant's needs, and how each platform can cater to them.

For instance, "eatigo targets your low peak hours, and excels at that. We introduced it at our Pool Grill last August after it had undergone renovation. We put the brand out there, and converted most of them to regulars," he says.

You have to understand the apps themselves as well, he adds. "The base that distinguishes eatigo is that it's a free app, while The Entertainer is something you buy. So people on The Entertainer are buying a ticket to going out and discovering new food. Whereas eatigo is an everyday app. You use it when you're going home from work and don't feel like cooking, so you are looking for whatever is convenient."

Creative Eateries' director of marketing and business development Bonnie Wong feels that  these apps have come a long way since the days of Groupon. Though it is difficult to measure whether app-users do convert into becoming regular customers, "we do see eatigo customers come back regularly at off-peak timings, so it's still good."

"For The Entertainer, you cannot choose when customers come, but the discount is not too extravagant. It's capped and usually only one person at the table has it. The rest still pay full price. They're more controlled, so it's a much stronger proposition than past apps."