‘Desperate to find answers’: Hospitality sector turns to apps for help

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This was published 5 months ago

‘Desperate to find answers’: Hospitality sector turns to apps for help

By Jessica Yun

LinkedIn largely caters to a particular demographic: the urbane, ‘white-collar’ professional, most likely tertiary educated, and looking to take the next step on the career ladder in their office-based job.

But product designers and managers Elliott Gibb and Jascha Zittel – who themselves had worked odd jobs in call centres, retail and hospitality, and understood the struggle of job hunting – noticed there wasn’t a similar platform for those in ‘grey-collar’ professions, like baristas, hairdressers or forklift drivers.

“This is what we call the network gap,” Mr Gibb said. “If you work in an essential profession, where you don’t have an extended network beyond the people that you know, there is quite a large asymmetry in the opportunities that are available to you … versus those available to people that have grown up with a network through the course of their life.”

Co-founders Elliott Gibb and Jascha Zittel created Sample, a professional networking app designed to be the LinkedIn of ‘grey-collar’ professions.

Co-founders Elliott Gibb and Jascha Zittel created Sample, a professional networking app designed to be the LinkedIn of ‘grey-collar’ professions.

So, they created Sample, a professional networking app. “We really believe in democratising access to opportunity,” Mr Gibb added.

Freshly launched and backed by venture capital firm Sequoia, Sample helps people connect with others in their niche industry (specialty coffee lovers can find fellow peers); help ‘stability seekers’ pick up an extra shift during lockdown, or understand how their transferable skills might apply in a different industry; or help ‘progression seekers’ find mentors to coach them for their next step.

Sample is just one of an emerging cohort of new players entering the marketplace to take advantage of the sector’s newfound enthusiasm for tech solutions amid the dearth of hospitality workers.

A brutal crisis

Across the nation, Australia is hiring some 20,000 hospitality and tourism workers, according to Seek data provided to the Sydney Morning Herald and The Age. Job ads in this sector have grown the most by far, up 76.3 per cent in November 2021 since this time last year. We’re most in need of chefs and cooks (5,200+) as well as wait staff (3,300+). Demand for kitchen hands and sandwich makers has more than doubled, up 150 per cent. Top Sydney restaurants are so desperate for dishwashers, they’re willing to pay $90 an hour - yet still can’t find people.

“There is an absolute labour crisis in this industry that’s brutal, and ripping [it] apart,” said mobile table ordering app me&u founder Stevan Premutico, who also founded Dimmi (now TheFork).

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The pandemic forced a rethink - and a ‘fight or flight’ response. “What we’ve observed over the past couple of years is that the laggards, the ones who normally would’ve taken 10 years to come on board - the dinosaurs - they jumped on board early.

“I think people were honestly just desperate to find answers.”

me&u founder Stevan Premutico says the mobile ordering app was embraced by the hospitality sector after lockdowns ended.

me&u founder Stevan Premutico says the mobile ordering app was embraced by the hospitality sector after lockdowns ended.

Mr Premutico sees the me&u app going some way to helping restaurants get around the labour shortage. Thanks to our new pandemic-born habit of mandatory check-ins, consumers have become very comfortable with QR codes. And if service staff can spend less time taking orders and processing payments, they have more time to do what they do best (be “magic makers”, he says).

He observes that Australians have been eager to open their wallets to cafés and restaurants struggling to find their feet after being struck by a succession of lockdowns over the last two years. “We’re tipping a lot more as a gesture to say thank you to the industry,” he said.

Upon payment, the me&u platform gives diners tipping options of 5, 10, or 15 per cent. After the most recent spate of lockdowns ended, Mr Premutico said tipping via me&u ticked up by 27.5 per cent.

Diners have become accustomed to ordering and paying from their table at the push of a button.

Diners have become accustomed to ordering and paying from their table at the push of a button.

“We proved that if you get rid of the barriers and the friction, and you allow a customer to sit at the table, push a button and get a beer and a burger to the table, you will spend significantly more.”

Yet not much is seen of what goes on behind the scenes, in the early hours of the morning when chefs and kitchen staff are busy preparing for the day ahead.

The unsexy operational back-end needs revolutionising, too. Ben Lipschitz, managing director at food wholesale marketplace FoodByUs, says the pandemic has been the catalyst for businesses realising that their cost management and efficiency processes needed a drastic overhaul.

“Many people don’t realise that your average burger joint or pizza shop actually has between 10 and 15 individual suppliers that they must order from almost daily. That’s one for fruit and veg, one for seafood, one for meat and one for packaging,” said Mr Lipschitz.

“There’s no such thing as Coles or Woolies for the wholesale side. It’s all very specialised individual suppliers.”

FoodByUs co-founder Ben Lipschitz wants to help cafes and restaurants boost their bottom line.

FoodByUs co-founder Ben Lipschitz wants to help cafes and restaurants boost their bottom line.

FoodByUs, which recently completed a $10 million Series A funding round, streamlines this fragmented system by bringing together thousands of local suppliers in an online ‘one-stop shop’ platform so that small-medium sized cafés, restaurants and caterers can order all their supplies in one go.

This gives chefs and venue owners visibility over market prices - something they didn’t have before. “Wholesalers will give restaurants a unique price, a unique product list per restaurant, so the ability to compare and say ‘what is the cost of a lemon across five or six fruit and veg suppliers?’ … just doesn’t exist.”

But when you have a marketplace with several product options and their prices listed clearly, venue operators can better plan their menu and seasonal specials and reduce costs. The transparency also hands some market power back to independent restaurants.

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The difference this can make to a typical restaurant’s bottom line is not insignificant when you consider that costs are typically split between rent, wages, and supplies. “Food cost tends to be where they make their profit,” says Mr Lipschitz. “The ability to say, ‘right, this is on special, I’m going to make more margin on it’ … it’s a huge back-of-house profit driver.”

The biggest obstacle, according to Lipschitz, is convincing hardened chefs to do things a different way. But once they do, they stay with it, even when they jump to a different job.

“The changed behaviour always leads to them sticking for life,” Mr Lipschitz said. “We’re really encouraged by the fact that a little bit of hesitancy and changed behaviour in the beginning always works in the end.”

The next challenge is for those at the helm of these technology-driven solutions to get better at working together as an ecosystem. “Are they meeting together? Are they building their tech to integrate with one another?” Mr Lipschitz said. “And no better market to do it than in Australia.

“I think it’s the ideal market for hospitality tech players to show collegiality and help.”

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