So, as On-Trade works towards the complete lifting of restrictions during the summer, we sat down with our Head of Partnership Development, Lindsay Thornhill and Strategy & Marketing Director Gordon Neil, for an in-depth interview on what brands can do to support the On-Trade this year.
We asked them four questions:
Read on for their responses and insight...
Lindsay comments, “I'm not sure if these outlets will make changes that will necessarily entice consumers in. I think they'll have to make changes to replace lost income streams, so they might look at new ways to generate additional income streams. That might be through food or some sort accompaniments like bar snacks etc. This might, in turn, entice other people in but I don’t think that will be the main reason for making the changes.
I think there are challenges ahead, and the biggest challenge will be that there will be less people going into pubs and restaurants, so these establishments will need to make more money per customer than before. So, these places need to find ways to do that and do increase the dwell time of consumers.”
Gordon interjects, “I agree. I think that aside from social distancing, we’ll see a continuation of the things that we were already seeing before the last lockdown, which is technology driving the ordering and payment process. Even when the restrictions end, I think that use of technology will be here to stay.
Another thing that we might see is more of increased use of people at the front door, in host/hostess style roles, with these people being used to bring customers in and engage them with conversation. It’s like Lindsay says, when restrictions allow, outlets will try to increase the dwell time in their establishments.
Places will try to optimise the spend of each person in their outlet, and they’ll be able to do that if they can make people stay longer. That can also include having bar staff doing more table service roles, meaning that they have more of a chance to speak to people to get them to stick around and spend more time there.
It’s this combination of technology and engagement that will be the driver.”
“Yes. As a consumer myself, saving money by not going out every month has become quite attractive.,” says Lindsay. Adding “I think there will be a lot of people who, like me, have gotten to a point where they realised how much money they were spending going out and they'll curb that spending because they now have other things they want to divert that money towards. So, this ties back to the point I made earlier in that pubs and restaurants will have less custom, and I think they’ll have less custom because people's mindset and behaviours have changed.
Initially, in the first quarter after reopening, there will be a big boost as people will be more excited to go out, but I do think that will pass. The only thing I can see pubs being able to do is capitalise on the fact that the nation won't be going on summer holidays this year, or at least it’s unlikely they’ll be travelling abroad for holidays. Outlets should try to capitalise on this theme and encourage people to swap their beach holiday for the pub or the restaurants because they might have a bit more income due to the fact they aren’t travelling like before.”
And Gordon agrees with Lindsay here, “I think that’s right. If people are going to go out, they’re going to go out for an experience and that means it needs to be a premium experience. People will want to spend money on something that they really want to do. You don't just spend money to go out and have a couple of pints because you can do that at home. People want some kind of experience, and I think that will be a driver for change.
Like Lindsay says, the economy will be a driver too, particularly the amount of disposable income people have. What’s the overall situation with the economy, and how does that impact on people’s pockets? That’s a factor.
I do think that the On-Trade has to offer something to consumers beyond making them feel safe in pubs and restaurants. All restrictions are due to end in June, but we don’t know how people will feel about them ending. How would people feel if they walked into a pub and it was packed out the door? It’s hard to say right now. Similarly, how would they feel about going to a pub where they can sit down and have their order brought to their table? That provides a different experience than before, and outlets will need to get the balance right for those who still feel conscious about staying safe, at least for a few months during that initial surge when things fully open again.”
It seems clear that summer will be a big time for the On-Trade, as Lindsay explains, “Summer sporting events like the European Championships and the Olympics are something brands need to factor in. For brands in the On-Trade, they want to create these ‘euphoria moments’, where people go out and engage with each other again and establish social content with one another during seasonal events. Pubs and restaurants need to focus on that kind of event led or occasion led activity. They need to provide people with an experience.
There will also be a requirement for quite clever marketing around these ideas too. Back to Gordon’s point about people feeling comfortable enough to go to these outlets, brands will need to couple the message of safety when they’re marketing these euphoria moments.”
Building on that, Gordon added, “I think if I were a brand right now, I would be thinking about how I could frame the position of reopening. It doesn’t start from the position of “how do I capitalise on the opportunity”, it starts from the position of “how do I support the pub trade in the best way, and how do I help them deliver what the customers want?” If brands approach it by thinking about how they can capitalise on reopening, they will fail because they’re not supporting the people who go to the pubs, or the pubs themselves.
This is actually something that Stella Artois have been doing more lately, creating a campaign called “Stella Tips” where £1 from each pint is put back into the bartender’s tip jar. This is a great example of brands supporting outlets to help them get back on their feet.
Because we’re talking about a trade that’s been impacted more than almost any other sector, and it has been hard worn time for these businesses and for the people that want to go into them. So, brands need to start from the position of “how to I support the best way I can?” and if you can do that, you’ll win.
Think about it from the perspective of the customer – what do they want? As Lindsay says, they’re going to want to be safe, they’re going to want an experience. They’re also going to want to stay in one place for a period of time, if they can. Whereas pubs just want to get back on their feet again. They’ve been hit hard in the pocket for a year. Both the owners and the people that work in them. They want to get back on their feet and have a business again.
If brands help pubs and restaurants do that, they’ll also be helping to bring customers back.”
It’s about adaptability, Lindsay thinks, “They bring the flexibility to adapt at pace to the market and allow brands to be able to upscale and downscale their operations as needed. It also allows brands to be dynamic too.
I think the ability to be dynamic and to be able to upscale and downscale at pace is quite important, particularly when you hear reports around third waves coming. There is no doubt we will hear about a fourth wave and a fifth wave as the year goes on. So, there's still uncertainty for brands in that marketplace, but they need to do something to be able to leverage the opportunity when it exists, so that’s being able to do field sales, but to also be adaptable when the situation calls for it. This will be important as we go through to the end of the year.
Brands need the flexibility to be able to win when there’s an opportunity but equally to redivert investment when they need to.”
And Gordon agreed, “I totally agree. This is about flexibility and efficiency. This is a trade that is not going to be the same size as it was a year ago or even a year and a half ago. It's going to be smaller. Everybody knows that. There are going to be less pubs. There are some projections that say that in two years' time the sector might return to the scale it was a year and a half ago, but that’s two years from now, and that's a prediction, not a guarantee.
There’s no question that brands are going to have work in the On-Trade in a more efficient way. There are two different variations of brands operating here right now:
They only way for brands to scale up and scale down as required is to do it efficiently with a lot of flexibility, and the best way for them to do that is to outsource their field teams.
I think there are some big brands in this space that need to get over the hurdle of outsourcing in the On Trade. Big alcohol brands have traditionally kept their salesforce in house, but they need to cross that mindset barrier because outsourcing is a great way to approach this marketplace.”
We’d like to thank Gordon and Lindsay for taking the time to answer our questions.
With many pubs and restaurants looking to start their year off on a good footing, it’s important that brands support these establishments so that together, they can best serve the needs of the consumers.
That’s the key question, and to that end our next webinar will seek to answer the question of what brands in non-essential retail, Away From Home and On-Trade sectors do after lockdown. Gordon will be hosting this session and he will be joined by Stuart Sims, the CEO and Founder for Caterlyst, as they look to the data and share hints on what your brand can do to sell more this year.