5 ways the food and beverage industry changed in 2020
If the last few years taught us anything, it’s not to underestimate the ability of people and businesses to adapt to their environments. The hospitality industry did just that, facing a number of unforeseen challenges and coming out on the other side with new learnings and technology to help businesses work better. After the launch of our Retail Report, we set off to dig into more focused insights on how the hospitality industry in particular is shaping up. You can find these in our 2022 Hospitality Report.
The learnings from the report were twofold: they gave fresh takes on old truths (hospitality still remains an exceedingly customer-centric industry) and surfaced new, compelling data on why businesses are investing big and aiming high to reach operational excellence. Here’s what we found:
Navigating a complex payments landscape is nothing new to hospitality businesses. The nature of a service-driven industry means businesses have to accept and aggregate payments across a number of different systems, agencies, and third parties. Without centralizing these payments on one platform, operations can be fragmented and costly.
While businesses experience these challenges firsthand, customers can feel it too. Siloed back office processes can cause friction in the many moments a customer engages with a business: from check-in to check-out, from booking a table to settling the bill.
We found that one in five hospitality and retail businesses connected payment systems to other parts of the organization with the goal of improving operations. This investment in digital transformation is seeing results: 71% of travel and hospitality businesses who connected their payment systems grew by at least 20%. And if the industry continues to grow as much as it expects (76% of travel and hospitality businesses expect to grow this year), it could amount to a $7.7 trillion dollar opportunity.
“Automation is not just about convenience or the personnel you can save on, it makes the whole process and customer experience better. Because manual tasks are taken away from staff, they simply have more time to talk to customers.”
It can take days, months, or longer for a business to build enough trust with a prospective customer to get them through the door of their business. And once they’re there, the experience is paramount to whether that person becomes a loyal customer. However, every business is unique and the same goes for the experience they offer: luxury hotels have the challenge of catering to exclusive repeat guests, while resorts want to design an effortless experience with multiple touchpoints, and businesses with budget-friendly clientele want to streamline processes with faster check-ins and check-outs. The thing all these businesses share is the need for connectivity throughout the customer journey.
Our report finds that 55% of consumers think hotels do a good job of linking online bookings with the customer experience on premises, while 56% think restaurants, bars, and cafés need to link their online platforms with their physical locations to improve booking and ordering.
As hospitality businesses prepare for an influx of customers in the coming years, the importance of bringing multiple channels together on one system becomes clear. One system that connects and manages payments from multiple channels: online, in app, and in store (a unified commerce approach) could set businesses up for success. Unified commerce synchronizes disconnected payment channels, allowing for more efficient processes and a more convenient and intuitive experience for customers.
Customer expectations are at an all-time high, and businesses who give their customers choice will be at a major competitive advantage. We found that 56% of consumers like to have multiple payment methods at check-out, meaning customers are looking for the method that’s tailored to their needs. This includes choice of card schemes, but also payment choices that allow for multiple languages, currency options, and even the preference to transact through wearables. These customers also expect a seamless payment experience.
Tokenization can be a tool for designing a convenient payment experience for customers. Tokenization is when sensitive card information is replaced with a piece of nonsensitive information called a token. This equips businesses to store a customer’s payment details and allow for subsequent transactions, automatic top-ups, and a faster check-out experience while keeping sensitive data secure. Hospitality businesses, and hotels in particular, know the importance of keeping guest payment data safe across the many channels and systems they interact with. Tokens can help accomplish this, while contributing to a more intuitive customer experience for repeat guests.
The hospitality industry has, and will continue to use insights to improve how customers interact with their businesses. It’s not just about measuring the frequency of customer visits to your location. Real-time data insights, like those that come from payments data, can grant businesses a new understanding of who their customers are and how they’re spending. Payments data can be used to analyze purchase patterns and average transaction values. The more you know about your customer, the better you’ll be at building loyalty.
We found that this is an untapped opportunity, with only 28% of hospitality and retail businesses using payment data to understand user behavior and improve the customer experience.
“Delivering bespoke and sincere service is always at the core of our legendary Raffles experiences that guests have come to love and appreciate. We believe that the guest journey with Raffles Hotel Singapore needs to be seamless from the start to the end and payment processes are key to achieving this."
The hospitality industry has faced its share of challenges in the last few years, but the steadfast adoption of technology in the sector has primed businesses for a new way of working and serving customers. The role digital solutions play in how hospitality businesses serve their customers will become increasingly important in the coming years.
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