There has been a proliferation of international franchise brands entering South Africa, including brands like Krispy Kreme, Domino’s and most recently, Starbucks. While some may be cynical of these brands making it in the local market, it does have a pronounced effect on franchising locally. Firstly, it creates new awareness about a category. When Starbucks launched, other local coffee brands made headlines with creative promotions, which raised awareness of the coffee category as a whole. New brands also bring novel concepts to our shores. Domino’s is famous for its dessert pizzas and other pizza brands are following suit with sweet offerings. Consumers end up having more choice as the brands on offer expand. These new brands also create new job opportunities, not only as part of normal operations but also in the supply chain. Additionally, international brands are focused on convenience. Again, the consumer wins as 24/7 service becomes available along with innovative delivery models.
New frontiers in food franchising
While there is an increased focus on health in the QSR (quick service restaurant) market internationally, it’s interesting to note that fast food purchases are growing significantly. According to AMPS data, the purchase of fast food went up from 66% in 2009 to 80% of consumers surveyed having purchased fast food in the preceding four weeks. Busy lifestyles, increased traffic and urbanisation all contribute to a need for convenience. Also, fast food operators are increasing their presence in rural and developing markets as they pursue growth opportunities, and many are now setting their sights on Africa as the next frontier.
Mass customisation is also prevalent in the QSR market, where the “build your own burger” concept started and manifested locally with the Rocomama’s brand taking the lead. There is also a focus on “real food” with brands increasingly coming under pressure to report on organic origins, local sourcing and healthy options. Gourmet food is becoming common place with the popularity of foodie TV shows, food markets and pop up restaurants. Locally, Col Cacchio pizza caught on to the trend by collaborating with guest chefs.
Uber your food
Technology remains the ultimate disrupter as it changes the way consumers transact and interact with brands. Uber has taken South Africa by storm, and many fans are looking forward to the launch of Uber Eats, where a variety of food offerings from different restaurants will be available on the app. Fast food franchises and restaurants could broaden their reach considerably by latching on to the Uber delivery network. Uber Eats also has the cashless facility that Uber users are used to. Other cashless apps like Zapper and Snapscan also eliminate the need for cash, and may drive consumer behaviour towards restaurants and establishments offering this service as it enhances convenience and speed of settling a bill.
Apps like Zomato and social media in general necessitate a social media strategy for brands. Word of mouth has never been stronger, to such an extent that consumers will trust the opinion of strangers on apps like TripAdvisor and Zomato, which may have a significant effect on patronage. It also offers an excellent opportunity for marketing, due to the visual nature of platforms like Twitter, Facebook and Instagram. Food can be pictured and shared, permeating pop culture. The ability to react instantly also gives brands the opportunity to be at the cutting edge of trends. Success is a Twitter campaign going viral!
Franchise brands have to stay abreast of trends in their category and also trends that may influence consumer behaviour. Technological advances can lead to the demise of a whole category, such as DVD/video rental franchises falling by the wayside due to the rise of online streaming services. Consumer behaviour is changing all the time, but this may also create new markets. Uber opened up the use of taxi services to new markets in South Africa, from picking up children at school to increasing visits to restaurants and entertainment using a safe platform. Similarly, Uber Eats may open up the delivery market to brands that didn’t have their own infrastructure for this service or that didn’t think of themselves as convenient options. This may in turn have an effect on menus and offerings. As Philip Kotler famously said, if you keep doing what you are doing now, you may be out of business in 5 years.
If you want to learn more about disruptive trends and technologies impacting franchises, don’t miss the Franchise Leadership Summit featuring speakers such as the Uber MD for Sub-Saharan Africa and Carlo Gonzaga of Taste Holdings on the Starbucks launch in SA. The event also features experts on technology and viral marketing. For more information or to book now visit www.franchisesummit.co.za