Many clouds, many thunderstorms
I predicted on this page a few years ago that the home delivery business would explode. It did. We are all getting so many more things delivered to our homes now. Not just meals, but also drinks, groceries, medicines, books and much more.
It was obvious that this would happen. As more women enter the workforce; as traffic jams worsen; as a new generation very comfortable with online shopping and very uncomfortable with cooking comes onstream; it was easy to see that old-fashioned bricks-and-mortar dining and shopping would take a major hit.
There is one element in this trajectory, however, that I did not spot – and that is the cloud. No, not the one denying you sunshine, but the one storing all your data. The fact that clouds know everything about us is very interesting – and very worrying.
Consider this: if you are a regular buyer of takeout meals through apps on your device, a great deal is now known about you. Which dishes and cuisines you particularly favour; which days of the week and times of day you are likely to order them; and what your average spend is.
If these data are aggregated, a fascinating map of a particular city or area can be created: one that shows the most popular dishes, when they are most often ordered, and for what budget. That’s a goldmine right there. A savvy entrepreneur can create a business that creates and supplies exactly those dishes at those times, knowing very well that demand is assured.
But there’s a problem. Who holds that data? Not the restaurants who create the nice food that you love. Those guys have not been smart enough to think about data. In fact they didn’t even pay much attention to delivery systems. They simply signed up with home delivery apps who collect the food and deliver it on their behalf. But they also collect all the data…
And so, we are about to witness the phenomenon of the cloud kitchen. This is a centralised, stripped-out kitchen that produces only the most popular dishes; and produces them only for delivery – no dining tables or waiters. It locates itself in a place that is at the centre of its delivery market, not in expensive locales. It uses cheap labour on cheap bikes to move the food around for now – and may cut costs even more if delivery drones become a thing.
It does not take a genius to see what a threat this is to the established restaurant industry. Who will create these kitchens? Why, those who own the data, of course. It is already happening in many cities around the world this year: the delivery companies are integrating backwards into food production.
So there you were, a nice local restaurant who got worried a while back by the home-delivery trend but didn’t know what to do about it. When a delivery service came to woo you with a small commission for delivery, you signed up quickly. And gave away a power you didn’t even know you needed in future – your customers’ data.
What should you do now, as someone with a good restaurant that is your life’s work? Option one is to be the one to set up centralised kitchens and partner with the delivery network guys. But that’s not in everyone’s capabilities; nor is it to everyone’s taste.
Option two is to weather the storm and focus very much on the things you are (hopefully) good at: fresh, tasty food served in a pleasant ambience. After a while, the trend of very efficient kitchens delivering food quickly and effectively will reach its peak. Eventually, some people are going to come back to wanting good food prepared and served with spirit and character; they will miss the experience of coming in person and enjoying an outing with friends and loved ones. But that’s only if you can make that experience convivial and exceptional, and worth the extra cost and trouble.
If what you are producing today is mediocre food served mediocrely, you won’t survive this cloud and this thunderstorm. You will neither be efficient enough nor distinctive enough to command a following. I fear many quick-service eateries are going to face a big squeeze.
And that’s true of many other products and sectors that are going to find data clouds unleashing thunderstorms on their turf. If you don’t control the data, you’d better control something that’s distinctive and needed. Otherwise, it will be game over soon.
(Sunday Nation, 14 July 2019)
Sunny Bindra’s new book, The Bigger Deal, is now on sale.
More Like This
- Are you stuck in a 'BS' job?November 24, 2019
- Welcome aboard the Education Express, kid...December 8, 2019
- How meaningful is the work you do?November 17, 2019
- Are you working on anything that will outlast you?December 1, 2019
- To recognise yourself, look downSeptember 22, 2019