Swiggy taps customer data to help restaurants scale up
Sudhakar Vempalle, cofounder of a fast food restaurant chain here called Leon Grill, plans a fourth outlet in the upmarket locality of Koramangala that also houses a large number of start-ups.
His decision is partly instinct but also based on data shared by online food ordering platform Swiggy. Over half the orders from Leon Grill’s first outlet near Indiranagar here are now routed through Swiggy, making the online platform a formidable ally in the chain’s growth.
Even at its two newer outlets in HSR Layout and St Mark’s Road, online orders make up 35 per cent and 15 per cent, respectively, of the orders.
“Initially, we went with our gut instinct and opened the first two outlets. When we asked for data from Swiggy, they told us there’s a lot of demand from Indiranagar and in Koramangala. So, in the next seven to eight months, that’s where we’ll be going,” says Vempalle.
Swiggy, which over recent months has set up a data science team, is looking to help restaurants like Leon Grill expand their base. In doing so, the online company hopes to kill two birds with one stone — increase supply and cut more lucrative deals with restaurants which will boost its own earnings.
Margins have always been an issue for India’s online food technology sector, where customers are reluctant to pay for the convenience of having food delivered home. The practice of undercutting delivery cost to win customers blew up when companies ran out of cash and investors suddenly became unwilling to fund losses any further. Several shut shop in 2015 and 2016, due to unviable business models.
The year 2017 has finally seen a resurgence of food tech companies but there are far fewer of these. And, those still alive and kicking are largely turning to restaurants to pay for their service.
“We have to help restaurants become more efficient and the restaurant owner more intelligent about where they should place their next bets,” says Anuj Rathi, vice-president of products at Swiggy. “We are now bringing tools for them to enjoy a disproportionate amount of growth on not onlyt our platform but their own platform.”
Swiggy has emerged as a leaders in this space by focusing largely on making deliveries, one form of income for restaurants, more efficient. For its second phase of growth, the company wants to delve deeper into improving the efficiency of restaurants themselves.
It has already begun delivering insights to restaurants on how they can modify menus to serve more customers. And, with its understanding of demand, is able to give more actionable data on how many orders they could expect. This has helped restaurants like Leon Grill better prepare their inventory for the day and even what they could do to boost business in specific hours.
“Technology is helping shape the menus of these restaurants and their physical locations. Restaurant owners need to decide how to use these different channels to work with Swiggy and get more growth,” added Rathi.
Leon Grill wants to expand to 10 locations across the city by the end of the year and data insights will factor out some of the risk in this expansion. Only, while Swiggy might be able to accurately predict what food customers in a given area want, it’s not always what customers who walk into a restaurant might want.