COVID-19 may permanently change the way many pubs interact with customers, writes Patrick Clover
IT hurts to walk past rows of closed pubs, bars and restaurants, but it’s also difficult to imagine these locations bustling with life once again, given how quickly the world has adapted to new guidelines around social distancing and travel.
The truth is that no one really knows when the hospitality sector will get back to normal, or what that even looks like.
Despite the devastating impact of the COVID-19 pandemic, I have been heartened by the way people in the hospitality sector have reacted. We’ve seen business owners pivot their services in unexpected new ways in response to lockdown measures, to stay profitable or stay afloat. Venues that have always been at the centre of local social life are finding new ways of servicing their communities and staying relevant to the lives of their patrons – whether that’s a Michelin Star gastropub chef cooking for the NHS, or Brewdog making hand sanitiser as well as beer deliveries.
Many parts of the industry have shifted to new digital models out of necessity, but it’s likely that we will see these trends continue in the years ahead. More pubs and bars will look to diversify their revenues and embrace elements of e-commerce that are proving successful during the lockdown.
Here are just some of the changes and new digital business models we’ve seen during the pandemic.
Many pubs and bars have resorted to crowdfunding sites for charitable donations. However, despite some success stories highlighted by these sites, most venues aren’t so lucky, especially latecomers only considering donations now. There are far more businesses seeking money than there are people willing or able to provide financial support, such is the devastating economic impact of COVID-19 worldwide.
Furthermore, these charitable donations are little more than a band aid for a bullet wound. A short-term cash injection won’t keep a venue running for long, nor is it a stable means of income. It’s worth creating a crowdfunding account, but it’s important to consider ways of continuing to provide services in exchange for money. This is the best way to stay engaged with customers and ensure future business.
Deliveries and storefronts
The priority of all pubs and bars will be fixing immediate cash flow issues. I’ve seen venues do this in a variety of ways. Some have set up shop selling produce and takeaway food like a local deli/newsagent – usually local produce that they would purchase and use anyhow. Others are still selling food, draught beer and cocktails online as their own e-commerce operation or through delivery services like Deliveroo and Uber Eats.
The benefits of these sales models are that they create a continuous revenue stream, allow key staff members to keep working, and avoid food and drink waste (which can be incredibly costly). Meanwhile, this helps venues stay engaged with customers, ensuring that they stay part of people’s day-to-day routines and remain at the forefront of people’s minds when the hospitality sector opens its doors once again. It’s hard work to pivot from being a purely physical business to offering digital services. However, it may yield rewards long after the lockdown measures are relaxed, especially if your competitors are already doing so.
Gift cards and loyalty programmes
A more effective long-term solution to crowdfunding sites is the use of gift cards. Making these vouchers available for purchase now, redeemable at a later date, is a great way of ensuring that cash and customers keep coming in. You can guarantee customers will return to claim their voucher, usually spending more on food and drink when they do finally visit.
Online services eg. virtual pub quiz, beer / brewing courses
What people miss about a thriving hospitality sector is about more than just the great food and drink on offer, it’s about the social experience and the routine. People miss their weekly pub quiz, after work drinks and date nights at their favourite bar.
While it’s not possible to provide these experiences in full, many pubs are experimenting with virtual versions of their pub quiz nights (teams are trusted on the honour system not to cheat) in exchange for a small entry fee. Everyone simply has to pour their own pint. Likewise, it’s difficult but not impossible to stream a virtual wine/beer tasting session. Beer 52, the Edinburgh-based beer subscription service, recently hosted a sold out digital beer festival. It’s an idea that would’ve sounded ridiculous six months ago but says a lot about people’s appetite for social engagement and activity during these difficult times. These kinds of events are certainly a trend I expect to continue for the foreseeable future.
Social media and email databases
With no passing trade, no events and no impromptu after work pub trips, the value of social media and email databases has never been greater. Venues with good customer comms have been able to stay engaged with customers and inform them of their digital events and services much better than others that rely on more traditional approaches to marketing.
While social media and email marketing are not new ideas, not every pub took them seriously or did them well. Many have relied on the same old and outdated customer contact info for years. Others have not seriously considered how to update this data post-GDPR. These venues are suddenly without a means of updating their customers, and I expect a lot of venues to revisit their social media and email database processes once the world returns to normal.
Not all predictions for life after COVID-19 will come true. Maybe businesses won’t embrace remote working, maybe air travel will go back to pre-lockdown levels and maybe urban house prices won’t crash. It’s anyone’s best guess right now, but my belief is that the hospitality sector will see significant reform. Pubs and bars will surely embrace digital platforms as they have never done before, to stay in more regular contact with their customers and ensure their future prosperity during any future hardships.
Patrick Clover is founder and chief executive of digital consultancy Stampede.