‘The mobile app is proving to be a big intervention to promote brands’

Changing habits of people and the resultant convergence in the consumption of food is helping the beverage category grow, BIDISHA NAGARAJ tells Sangeeta Tanwar

Unlike in the case of burgers or pizzas, the ticket size of every consumer purchase at a coffee shop is small. How does one tackle this challenge? A café in the consumers’ eyes is essentially seen as a hang-out zone. People don’t go to a café with particular food in mind unlike a quick service restaurant chain. People visit a café for different reasons — it could be for meeting somebody, having a conversation or for a business meeting. While the ticket size for a purchase at a coffee shop is not comparable to that at a food outlet, we are bringing in larger volumes. Coffee happens throughout the day and depending on the day part there is a snack that goes along with it, so here the average ticket size for us too tends to be quite high.

To give consumers a wider variety we have introduced new offerings in the area of heavy snacking. The outlets now have on offer toast pizzas, nachos, whole bunch of garlic bread, samosas etc. We have also launched a freshly assembled food segment — where customers get to choose their own bread and filings. This will help us introduce new seasonal offerings and change our menu from time to time. But with the number of hang-out options for youngsters growing rapidly what are you doing to get more people to a coffee shop? Who is your real competition? For a café chain there is no single competitor. It’s a very wide category. For us, anyone who has ~250 in her pocket is a potential client. We are focused on getting that ~250 from the consumer’s wallet for a visitation to CCD as opposed to it being spent somewhere else.

To get more people into the café, we are doing a lot of things on the engagement front. For instance, we have started providing free Wi-Fi at cafés. Wi-Fi gives some consumers a reason to walk into our café, sit for a while, sip a coffee and quickly download a video or two.

We have recently introduced our mobile app. One of its big features is the loyalty programme. Depending on the time spent in a café, a consumer gets beans which she can exchange for special offers. Such offers are helping us keep our coffee shops sticky.

The mobile app is proving to be a big intervention for promoting our brand. It allows for data mining, better customer profiling and helps us in coming up with customised offerings. We have just launched our home delivery service creating a completely different revenue stream. Currently, we are providing this service through a third-party home delivery aggregator. We will soon be starting it through our own mobile app.

In the next few months, we are going to introduce our pre-order service which will allow a customer to pre-order her beverage and food. Even as the consumer parks, if need be her order will be ready for pick-up and takeaway. With the mobile app we are even looking at a feature like the Jukebox which will allow a consumer to play music of her choice from the playlist. All these initiatives go a long way in creating multiple engagement points with consumers. Overall, the ambience that our cafés offer — besides food and beverage — urges consumers to come back to us.

Further, the yesteryear phenomenon of people actually doing breakfast, lunch and dinner typically at 8 am, 1 pm and 10 pm is changing fast. Today, people are actually snacking through the day. We are now seeing a lot of convergence in mealtime leading to convergence in the consumption of food. Depending on their lifestyles people choose to go slow on breakfast or lunch with an intention of picking up a burger or wrap on the go. So the changing eating habits of people are helping the beverage category grow. Especially for cafés, finding the right location is make or break. With the emphasis on premium properties, many coffee retailers are finding themselves saddled with high rental costs and scaling down their expansion plans. What are the key considerations for you when you select locations? We have been early movers in the industry, so to that extent we have an advantage in having blocked off premium sites at very aggressive rentals with a higher lock-in time. We have been able to do this because of our long-term commitment to the business. This helps us in bringing down the overall rental costs. While going for new properties, we go for ones that have larger frontages. Such frontages help us better than smaller frontages simply because larger and wider frontages appear more welcoming to consumers. Also, nowadays we are relocating few of our stores. For example, we are relocating a few stores in Mumbai because earlier spaces are small (600 to 800 square feet). Now we are moving into bigger spaces (1,000 to 1,400 square feet) with big frontages.

What is going to be the next level of innovation in the coffee retail space?

What started off 25 years back as pure cafés serving only coffee is going to change. Consumers today have on an average two and a half hour of what we call dwell time. Also from the consumers’ point of view they want everything in one place. Earlier they would have coffee at one place and prefer eating at another. This no longer holds true. And that is why companies that are only into food are also getting into beverages as they want to capture the consumers’ dwell time. So, the next level of innovation will come in the convergence of food and beverage space and how we are sort of reacting to that and giving consumers the edge they are seeking.