So you're considering getting into restaurants? Godspeed. The restaurant industry can be tough but like any business it's got both ups and downs. But it's also one of the most rewarding, especially for those with a deep passion for food and the art of hospitality. The first year of your new food restaurant will be the hardest of all - but this guide will help fortify your launch. In both boom times and downturns, a proper restaurant business plan is an important piece of a successful business and your roadmap to success whether you're launching a fast food concept or a fine dining restaurant. The business planning process will help you further define your concept and sharpen your approach so that you can stay focused during build out and maintain competitiveness after opening. New restaurant owners should be especially committed to this process so that they can learn as much as possible about the industry and their potential concept -- and be prepared for the road ahead. Yes, it takes a bit of work and time investment to write a compelling business plan. But that’s the whole point! Whether this is your first restaurant or your hundredth, a great business plan structures your concept to give it the greatest chance of success. To put yourself in the best position to achieve your dream of owning a restaurant -- or building an empire -- here's everything you need to write a winning restaurant business plan. A great restaurant business plan doesn't need all 10 components; however, if you omit one of these you should be able to explain to investors why you chose not to include that section. 1. Cover Page 2. Executive Summary 3. Restaurant Team 4. Concept Overview 5. Market Analysis 6. Operations Plan 7. Marketing Plan 8. Financial Plan 9. Investment & Capital 10. Business Plan FAQs Why You Need A Restaurant Business Plan First and foremost, your restaurant business plan should answer the question: “Why does the world need this specific food-service concept -- and why now?” The planning process helps you refine the concept, clarify priorities and catalyze the opportunity within the context of the broader market. Beyond that primary objective, the business plan functions as a blueprint for building your vision. It's a framework for moving forward that keeps you on track and prevents you from drifting away from your vision. That drift can be significant: you’ll make hundreds (if not thousands!) of decisions during the build-out and pre-opening phases, each of which can contribute to gradual drift absent a clear and shared framework. Your restaurant business plan is not just a critical operational tool. It’s also a sales and marketing asset. The average restaurant startup cost varies by concept and geography, but ranges from $1,808 per seat for casual quick serve with smaller footprints to over $6,000 for high-touch fine dining and larger establishments. With that kind of money on the table, you need to do your homework, create a realistic and comprehensive business plan and show investors that you know what you’re doing. “You have to show any potential investor that you have an actual plan, you know what you’re talking about, it looks professional, and you’re not just screwing around.” Charles Bililies, owner of Souvla Above all, remember that the majority of restaurants fail within the first few years. It's an incredibly challenging business! Your plan should address this head-on and emphasize any unique competitive advantages that insulate your business and make it more resilient. Investors will be looking for these types of competitive moats that can make or break a restaurant! What You Need To Include In Your Restaurant Business Plan Restaurants aren't the place to use the Lean Startup framework. There's no Minimum Viable Product. We're talking about a physical space that can't easily be adapted to serve new customers or do new things. You're quite literally limited by the dimensions of your space and the types of equipment you've installed in your kitchen and bar areas. That doesn't mean that you can't evolve your business over time; on the contrary, it's important to build that flexibility into your plan and how you design your space. You just need to be confident and what you're doing because it won't be easy (or cheap) to change directions if it doesn’t work out! And that confidence should come across throughout your business plan -- your confidence in your product gives investors confidence too. Every statement you make should be backed by data (including the reason for choosing your concept and target market) and all challenges should be called out. Alongside data and research, honesty and directness go a long way in a restaurant business plan. Cover Page Make a great first impression by putting your logo front and center. Don't have a logo? Your plan may suffer because the logo gives potential investors their first impression of your concept and its marketability -- as well as a basic test of your professionalism and vision for the concept. You'll also want to add your contact information and any relevant social media handles that can provide more background as potential investors do their due diligence. Executive Summary The Executive Summary or company description introduces your concept and provides a brief overview of what’s to come. Resist the temptation to over explain or cram everything in. It should fit on a single page! The objective of the summary isn’t to give investors everything they need to make a decision; it’s to capture their attention so that they want to read more. We recommend the “6 Ws” framework that underpin the Lean Six Sigma management technique. Briefly answer the following questions, using bullet points to make it easy to digest: Who We Are: Introduce yourself and any partners, as well as any key hires already attached to the project and your chosen business structure. What We Sell (And To Whom): The concept and the target customer segment When: The timeline for the plan, from build-out to pre-opening to opening. Where: If you already have the location selected, show this information. Otherwise, offer a brief explanation of target neighborhoods. Why: Your vision for this concept and highlight your hopes and dreams for the future. Is it expansion? Franchising? Sticking to a single location? Close out the executive summary with a high-level financial summary, including estimated pre-opening costs and gross revenues in the first three years. Team This section is all about what makes your team the rockstars that are going to execute this vision! Using brief bios (with photos) of management, operating partners and key hires, you’ll carefully construct the narrative around why this is the right management team to not just bring this concept to life but to build it into a profitable business. Keep it brief but impactful by focusing on the most relevant experience for this specific concept. The Restaurant Concept This is arguably the most important section. It's your chance to showcase your vision, expertise and unique approach. In it, you’ll share the inspiration behind the concept, what types of food will be serving, the service style, and a sample menu. The objective of this section is to clearly explain what's unique about your restaurant and what makes you the one to bring this concept to life. Be sure to include the following: A mission statement. Mission statements certainly can come across as fluffy and high-level. If that’s the case with yours, you’re doing it wrong! your mission statement should encapsulate what you hope to accomplish with your business, and give you a North Star to guide your decisions. A well-crafted mission statement can do wonders at keeping you focused -- especially amidst the avalanche of decisions to make during build out. Here's a list of restaurant mission statements to get the juices flowing. A sample menu. This menu is extremely important for three reasons: first, it's a tangible representation of the concept and what you plan to serve. Second, the menu informs the design of the kitchen and bar areas; without a menu, you can't select kitchen equipment and thus can’t accurately estimate the cost of the kitchen. Finally, it should show that you have adequately costed out your menu items (using what's known in the industry as menu engineering) to ensure the viability and profitability of the concept. Bonus points if you can show the estimated profitability per item within the sample menu! The draft Shake Shack menu, as scribbled on a napkin by Danny Meyer. The legendary restaurateur keeps the sketch framed in his office next to a sign “The bigger we get, the smaller we need to act.” Concept design. At the very least, include an architect's rendering of the space. Even if you don't have a specific location selected, this helps investors visualize the concept and its atmosphere. Take some time to explain the service style and how the guests will experience the space. It never hurts to get into the weeds here: the types of glassware, the lighting, the seating choices. Concept location: If you already have a location selected, explain the nuts and bolts of the build-out phase, especially any costly renovations such as adding a hood venting system. Add as much detail as possible about the specific location, including photos, blueprints, etc. Startup costs. A quick overview of what it will cost to open your first location. You'll provide a more detailed look at startup costs in the Financial Plan section Finally, we recommend doing a SWOT analysis of your concept, which is an honest appraisal of its strengths, weaknesses, opportunities and threats. Good investors are not easily swayed by smoke and mirrors, so use data/research to back it up! Answer the following questions in your SWOT to round out this section. Strengths: What makes your concept stand out? Weaknesses: Where could you potentially fall short? Opportunities: What makes this the right time, the right team and the right location for this concept? Threats: What is the competitive landscape that may hinder your success? Market Analysis In this section, you'll make the case for why this concept is filling a hole in the market. The key here is to do your research. Instinct and expertise only go so far at convincing investors that this is a sound investment. You need to drive home the opportunity using as much research and data as possible -- especially when it comes to high risk investments like restaurants. Industry Analysis. Start with a high-level overview of the current market trends when it comes to restaurants at the macro-level. Keep it brief; restaurants are inherently local so these wider trends aren’t as useful as the local market ones. Local Market Overview. Next, zoom into your local market to highlight the opportunity in the city and neighborhood that your restaurant will occupy. Do a thorough analysis of the area’s competition, as that heavily influences your success or failure. You need to be very clear about what differentiates your restaurant from others in the area so that consumers have a clear reason to patronize your restaurant over others. You’ll need a crystal clear differentiator in a cluster of similar restaurants. Images work well here, as do graphs and other relevant visuals. Guest Segmentation. Be specific about what types of people will frequent your restaurant. Use personas to show a deep understanding about who your target consumers are and why they would frequent this restaurant. You'll want to tie this segmentation into your earlier Market Overview. For example, if there are new developments in your restaurant's neighborhood that could contribute additional demand from a specific demographic, mention that. When it comes to research sources, you have a few options. The National Restaurant Association not only has nationwide data (such as the 2020 State of the Industry report available free to members) but also has local chapters that can assist with market-specific information. Your local Chamber of Commerce and/or Economic Development agency can provide local market statistics around regional growth and even neighborhood-specific data. Neighborhood associations are also useful sources of information -- not to mention eventual allies for your new restaurant. Operations Plan Once you've established the concept, and how it fits into the local market, it’s time to detail your plan to build and operate the restaurant. Staffing. Your personnel plan should clearly lay out how many staff members you anticipate needing for daily operations. You’ll also want to include any other talent that will influence your success, such as your attorney, accountant, bookkeeper, architect, designers, general contractor and/or marketing consultant. Briefly introduce them and highlight any relevant accomplishments or expertise. Training. How will you train your staff? Make a clear plan that outlines not just pre-opening training but also staff training for regular operations. Remember that turnover in restaurants is quite high, so you want to have a very complete Employee Handbook and Training Plan that aligns with your service standards. Suppliers & Vendors. To show preparation and organization, identify your chosen suppliers and vendors. The list should include (but isn’t limited to) the following: POS, payment processor, printers, kitchen/inventory management system, accounting, staff scheduling and labor management software, payroll processor, food safety, digital marketing agency, website builder, and delivery, if applicable. Crisis and Business Continuity. Recent events have reminded us all about the power of planning. Extra credit for those who include a section around planning around businesses continuity in crisis situations: staff illness, food poisoning, natural disasters, and unexpected economic headwinds could all potentially impact your business. Some may only attack your reputation while others threaten your very existence. Preparation is key. Marketing Plan A restaurant is only as good as its marketing. Ok, well, that’s not entirely true -- the food, service and ambiance matter too! After all, the most delicious food, the most exceptional service, and the most inviting ambiance mean nothing if no one walks through the doors. Marketing can also be a clear competitive advantage over competing restaurants. So, if that's the case with your restaurant -- and it absolutely must be if you are planning to open in an area with fierce competition -- make that case here. Elements of a successful marketing plan for a restaurant include: Website. Potential guests often use search engines to find restaurants. In fact, “restaurants near me” is an extremely popular term. Your website is your calling card for those guests. It also helps those who add a reservation or NovaSure restaurant to find your address. Your website should be easy to use and put the essential information up front: the address and the menu. Organic Social Media. Restaurants are one of the easiest business types to market on social media -- the content is always rich, colorful and engaging! Foodies can be found all over social media and the platforms are naturally built for the images and videos that restaurants create. Demonstrate your grasp of the power of social media by showing how you intend to use this free marketing platform. Or mention your impressive digital marketing agency that will help you build your brand online by finding and nurturing a community of passionate followers. Paid (Digital) Marketing. Organic visibility is only one part of your marketing strategy. You must supplement that work with strategic paid digital marketing that amplifies your message and gets your restaurant in front of people deciding where to eat. Your digital marketing may include: Search ads, social media ads, and potentially Yelp/TripAdvisor. Certain types of restaurants also do well on radio and TV. Loyalty. It's so much easier to keep a customer once you have them. What's your restaurant strategy for building a loyal customer base and not relying on paid advertising to get people to the doors? Outline strategies for getting online reviews (and improving your ratings), building a database of customer information for regular promotions (such as email newsletters) and encouraging your best customers to show their experience with friends to build word of mouth. Loyalty programs can help bring back happy guests in higher frequencies but if guests don't have a great experience at your establishment - a bad first impression can turn loyalty into an uphill battle. Public Relations. It's not realistic to just expect that your restaurant will capture the attention of journalists once it opens. You'll need a detailed PR strategy that puts your restaurant in front of relevant local food press and national food press. Another great way to build PR and give back is to engage with community events and charity galas. best intimate events give you a chance to meet your customers face-to-face outside of the restaurant and so your commitment to the community. Financial Plan Restaurants require a lot of upfront investment. From rent to insurance to permits, printers and POS terminals, there’s an endless list of expenses. Even if you’re acquiring an existing property, it's not a cheap business to start up. As you create your budget, refer to the Uniform System of Accounts for Restaurants, the gold standard restaurant accounting. Not only will it show you how to set up your own books but it may also give you an idea of common expenses you may be overlooking. Although these projections are created long before you open for business, they still matter greatly. A thoughtful approach, backed by explanations for the numbers, highlights your professionalism and expertise to investors. Start up costs. Include anything and everything required to get you to opening day: build-out costs, equipment cost, licenses and permits, architects fees, rent, insurance (business interruption, liquor liability, general liability) and labor (pre-opening management salaries and training new staff prior to opening). On top of the total startup costs, add at least a 10% buffer for contingencies, or unexpected cost overruns. And don’t forget working capital -- You should assume that you won’t fully break even until a year too, and have enough working capital to sustain your business as you work toward profitability. Profit and Loss (P&L). Combine your revenue forecasts with your costs to show your potential for profitability over the next 3-5 years. Include both your fixed costs (things that won't change often, such as rent and insurance) and variable costs (things that change such as labor and food costs). If you’re not comfortable with numbers, lean on your accountant for help. There are also vendors that offer business plan creation software that greatly simplifies the complexities of financial projections. The right software can make a world of difference. It will track your business progress over time to benchmark against projections -- and save you time from spreadsheet hell! Additional Analysis. In addition to the other analysis, include a break-even analysis and cash flow projections. These detail what it will take to get to break even (where your revenue covers your expenses) and show your expected cash flows (and that you’ll be sufficiently capitalized to make it through the early years of the restaurant). Investment & Capital Required Close it out with a clear breakdown of the investment required to get this restaurant off the ground and support its operations until it can sustain itself through cash flow -- and ultimately profit. You have to be careful to avoid directly asking for an investment, as that could be seen as a solicitation for investment. Every country (and locale) has its own Rules regarding how and where companies can solicit investments. So be very careful to abide by those rules and avoid breaking the law in your jurisdiction. One way to go about doing this is to break down how you would use the potential capital. It can be as simple as the following: Total Capital: $400,000 Build Out Cost: $300,000 Contingency: $30,000 Initial Inventory: $20,000 Marketing: $10,000 Working Capital: $40,000 Restaurant Business Plan FAQs To close out this guide to writing a restaurant business plan, here are answers to common questions. We hope these help you as you start the long but valuable process of building out a plan for your new restaurant concept! Why do I need a restaurant business plan? The business plan process puts structure around your idea and makes it more marketable. Since restaurants are not simple or cheap to start up, it's likely that you will need investors. Structure and marketability will come into handy as you talk to potential investors (such as family, friends, and angels). if you're seeking financing from Banks, then you will be required to have a plan that goes into very clear detail on all aspects of your business, especially the financials. If you find yourself balking at the thought of building out an entire plan, at the very least you should do the One Page Business Plan. While we don't recommend these short plans for Investments as complex as restaurants, they may help you collect your thoughts What are some sources for researching my restaurant idea? Successful restaurants are rarely built on hope and instinct. Putting some third-party research into your plan will help you sell the idea. And talking to potential customers will help you show why your idea is filling a gap in the market. Here are a few resources: National Restaurant Association (U.S). The NRA has nationwide data (such as the 2020 State of the Industry) as well as has local chapters with market-specific information. If you're outside of the United States, look to your country’s own association for additional information. Local organizations. Many cities and communities have Chambers of Commerce and/or Economic Development agencies that exist to facilitate new business activity. Reach out to these entities to see how they may help you with research and other support. Google Forms. It's never a bad idea to talk to potential customers. You can do this face-to-face or send out a survey with a free tool like Google Survey. Neighborhood associations. Restaurants are community businesses. Engaging the local neighborhood association will not only introduce your concept to potential customers, but it will also give you critical insights into your restaurant’s neighborhood. Where can I find restaurant business plan templates? There are several business planning software tools that allow you to both build your business plan from a template and model your financial projections. Restaurant business plan samples can also help speed up your planning. There’s a major time savings to using software that includes financial modeling; without it, you're stuck with a spreadsheet that doesn't always adjust to any changes. It's just much easier and a better experience when you can easily change numbers and see the impact of various scenarios. A quick search for restaurant business plans give you options to evaluate. Why do restaurants fail? There is no way to sugarcoat it: owning and operating a restaurant is a difficult enterprise. There are easier ways to make money! More often than not, restaurants fail due to two things: owner/operator burnout and undercapitalization. Since restaurants are such intense businesses, it can be exhausting over time. In addition, the razor-thin margins of most restaurants means that they need a healthy capital cushion to weather head winds. Other common failures include a poor location, bad food/service (and resulting reviews), unscrupulous owners (tax evasion) and poor cost management (out-of-control labor and food costs).
Hotel Food & Beverage Software Articles
Even in the age of eCommerce the retail industry is thriving and innovating. Think about the last time you went shopping online or in a brick-and-mortar store. Maybe you were wowed by the brand’s focus on sustainable hospitality or your interest was piqued by an ad for an in-store event. Maybe you even interacted with the brand on social media before or after you made your purchase. In the last few years, retail brands have faced fiercer competition as many consumers shift to online shopping, especially via marketplaces like Amazon which charge hefty commissions. Sound familiar? Perhaps your hotel is under pressure too - from short-term rental competitors, OTAs, and guest review sites. If your hotel wants to add some creativity to your marketing campaigns, reach new guests, and book more rooms, let’s look to the retail industry from some inspiration. Comparing the retail industry to the hotel industry might not seem like the most logical pair at first, but as we dig into the intricacies of these two customer-focused verticals, the overlap becomes more clear. In fact, the line between retail and hospitality is blurring as brands like Parachute Mattress, Restoration Hardware, and even Taco Bell are opening hotels of their own. So how does the retail industry find success in today’s ever-changing marketplace? Let’s dig into five best practices. Focus on direct-to-consumer strategies Years ago, if you needed a new pair of jeans or a new washing machine, you would go to your reliable local department store. Department stores made sense back then, since smaller, specialized brands might not have had the marketing power to reach consumers directly. Fast forward to today, when the internet makes it possible for customers to follow brands on Instagram, retailers don’t necessarily need department stores - or any marketplace, for that matter - to sell their products. While some brands do rely on marketplaces like Amazon, others find success with no middleman whatsoever. If you’re a hotelier who’s trying to reduce your hotel’s dependence on OTAs and drive direct bookings, you can look to retail brands like Glossier as masters of the direct-to-consumer business. Glossier, a cosmetics company, only sells their products online, and, just recently, through a handful of their own boutiques. The company doesn’t distribute via Amazon, Sephora, or any department stores. Because selling directly to the consumer allows Glossier to have full control over the purchase experience, they can build a stronger relationship with their customers, and, as a result, Glossier built such a cult following that it opened its first brick-and-mortar storefront in 2018. In their stores and online, Glossier solicits feedback from customers and integrates that feedback into new products and improvements to current products. Their website is user-friendly, and loyal customers often receive freebies or access to special sales. Rather than trying to build a distribution network, Glossier invests in its direct relationship with customers and reaps the benefits of customer loyalty. Add personality to your social media channels Those department stores of the past didn’t need to have a catchy personality because consumers had much less choice then. Today brands need to have a distinct brand persona in order to stand out in a crowded marketplace - especially online. One way for customers to get acquainted with brands is via social media, and some do a great job of conveying their personality online, like Casper, Warby Parker, and Charmin. These brands, which sell mattresses, eyeglasses, and toilet paper, prove that you don’t need to sell the most exciting product to cultivate a personality that consumers love. Casper is known for its playful social media posts that often include kids and pets snuggling on one of their mattresses. Warby Parker is another brand that started online with no physical stores, but has since expanded to include brick-and-mortar shops around the country. Their social media personality is down-to-earth and lighthearted, and they often incorporate their employees in photos and videos. The brand recently posted a video showing employees reading funny misspellings of “Warby Parker” which come up in Google searches. And Charmin, a longtime toilet paper company, has gained social media fans with its signature potty humor. Emphasize sustainability Though it might seem counterintuitive for a retail company to encourage people to consume less, many brands understand that today’s consumer wants to support sustainable business practices. Consumers are shifting their preferences toward sustainable products, from food to cleaning products to clothing, and sales of products labeled as “sustainable” grew nearly 30% between 2013 and 2019. This trend is creating entirely new business models and encouraging retailers to use sustainable materials, especially in the clothing industry. While the environmental consequences of “fast fashion” make headlines, Rent the Runway is in the news for an entirely different reason - its sustainable business practices. This clothing rental service lets consumers rent high-end apparel that they wear and ship back to the company to be dry cleaned and shipped off to the next renter. Rent the Runway’s success highlights the opportunity for environmentally friendly fashion businesses, as the company reached a $1B valuation in late 2019. But retailers don’t need to create entirely new business models to be green. Allbirds, a New Zealand-based shoe company, uses a combination of merino wool, eucalyptus fibers, and recycled plastics in its footwear. This brand started from humble roots in 2014 and hit a $1.4B valuation in 2018. Hotels have been conscious about sustainability for years, but asking guests to reuse their towels for an extra day just doesn’t cut it anymore. Today’s guests expect bigger strides when it comes to reducing environmental impact. In addition to replacing tiny shampoo bottles with eco-friendly dispensers, hotels with retail outlets or sundry shops can use software like Impulsify to understand exactly what guests are buying so they can reduce waste and sell more efficiently. Turn regular public space into creative event space Stores, like hotels, often have beautiful physical spaces that sit empty for portions of the day. Some creative retailers have found alternate uses for their storefronts by hosting events, fitness classes, or even lectures during or outside business hours. Lululemon, for example, regularly moves their racks of athletic clothing aside to hold in-store yoga classes. Besides being an innovative use of space, these special in-store events can also generate buzz about the brand or kick off the launch of a new product. Hotels are accustomed to selling meeting and banquet space, but properties that don’t have formal event space can still think outside the box and hold events in the lobby, in dining outlets, or even in guestrooms. And rather than selling the space to an outside organization, you can consider hosting free events that promote the hotel itself, such as a F&B tasting, spa open house, or career day that targets locals. Form partnerships with complementary brands Holding in-store events isn’t the only way brands are bringing innovation to their marketing strategies. Many retailers are collaborating with other brands that reach similar audiences or sell complementary products in an effort to generate publicity and offer unique products. One type of partnership involves a popular, value-oriented brand that joins forces with a luxury brand. Target, for example, sells affordably priced capsule collections with designers like Zac Posen, Lilly Pulitzer, and Proenza Schouler. H&M, another affordable retailer, has launched collections with couture brands like Balmain and Versace, offering their take on designer items at significantly lower prices. These collections often sell out quickly, which generates demand and publicity for the brand. But collaborations aren’t limited to the fashion industry. Home Depot recently teamed up with Pinterest to promote lighting, paint, textiles, bathroom fixtures, home decor products, and more in its “Shop the Look” program. In this program, consumers who are looking for DIY project inspiration on Pinterest can quickly find and purchase the items they need for the project at Home Depot. Hotels can engage complementary brands in similar partnerships, just like how Westin partnered with New Balance to offer sneakers and exercise clothing in its hotels. The key is collaborating with brands that resonate with your guests. If your hotel is well suited for families, perhaps consider partnering with a local toy shop to provide a selection of toys in some co-branded guestrooms. Or, if your hotel gets a lot of business from foodies, maybe collaborate with a local bakery on a tasty welcome amenity. Though the retail industry and the hotel industry have their differences, many of the most important business goals are shared: build brand loyalty, drive direct purchases or bookings, and stand out among a sea of competitors. Since both industries face some kind of internet-fueled disruption, hotels can take best practices from retailers who have found success in today’s dynamic marketplace. By learning from these creative retail tactics, hotels can gain traction online and book more rooms.
Do you have a spare $1.6 million lying around? That’s the average amount that security experts now estimate a business needs to recover from a cyberattack containing malware. Hotels are easy targets for hackers. Cybersecurity is not something many hotels feel confident in. "Last year, the two biggest global reports on data breaches, Trustwave’s Global Security Report and Verizon’s Data Breach Investigation Report, both show hospitality continuing to struggle in this area. Verizon, meanwhile, reports that accommodation, food and lodging made up for nearly 54% of their caseload,” says Bob Russo, GM of the PCI Security Standards Council.” Each time a hotel’s guest records get breached, the property is burdened with financial strain and faces broken trust with guests. As a hotelier, you don’t need to be an expert in cybersecurity, but you absolutely need to understand the basics to protect your business and your guests. Here are some ways to tackle cybersecurity at your hotel and minimize your risk as much as possible. Why Hotels are Attractive Targets for Hackers Hotels are easy – and profitable – targets for hackers. Hotels make attractive targets for two reasons: first, cybersecurity at many properties is lax. “Only about 25% of all U.S. businesses, including hotel operators, are fully compliant with current data security best practices. That means that three out of four are not and are potential disasters waiting to happen,” says Russo. Secondly, hotels process lots of transactions and store tons of guest data. A hacker can simultaneously target a property’s point-of-sale and property management system to capture payment card information as well as personal data, like passport numbers and email addresses. Malware can move between POS and PMS systems at different properties under the same brand, affecting guests in locations around the world with no one the wiser. Likewise, there are many access points a hacker can target in a single property. “In February, it was reported that of the 21 most high-profile hotel company data breaches that have occurred since 2010, 20 of them were a result of malware affecting POS systems in a hotel restaurant, bar, and retail outlet,” says Mark Voortman, Ph.D., head of the information technology program at the Pittsburgh-based Rowland School of Business. A small, 100-room hotel with a 50-seat restaurant still processes hundreds of unique payments each day. Those unique payments are virtually defenseless; few hotels have the necessary security protocols, infrastructure, and training in place to make sure any interested parties are dissuaded from stealing guest information. What is Malware? Key Cybersecurity Concepts Defined Understanding the key concepts of cybersecurity is half the battle. Here are some common terms you will encounter while improving security at your hotel: Phishing: phishing occurs when scammers send you an email, text, or even call you to try to trick you into revealing personal information they can then use to access your bank details or credit cards. A phishing email might look like a message from your bank warning you that it will shut down your account unless you verify your personal information. Encryption: Encryption is a security procedure that involves scrambling data so that only parties authorized to read it can understand the information. The process takes readable data and alters it so that it appears random. The party that receives encrypted information needs a key to unscramble data and turn it into readable plaintext. VPN: VPN stands for “virtual private network.” A VPN will mask your IP address and keep your internet activity largely untraceable. It’s a great tool for making sure your internet connection is secure and private. Malware: malware is shorthand for “malicious software.” Malware is designed to gain access to your computer; spyware, ransomware, viruses, and Trojan horses are all different types of malware. Penetration test: penetration testing is a procedure where a cybersecurity expert tries to identify weak points in a computer system. The expert simulates a malware or hacking attack to find any vulnerabilities that bad actors could take advantage of. APT (Advanced Persistent Threat): an APT is the worst kind of attack, in which a bad actor uses “continuous, clandestine, and sophisticated hacking techniques to gain access to a system and remain inside for a prolonged period of time, with potentially destructive consequences.” Antivirus: a program designed to detect and destroy computer viruses on an operating system Anti-malware: Similar to antivirus software but where antivirus focuses on older/known threats, anti-malware typically focuses on newer unknown threats. Malware protection focuses on identifying unknown threats before they turn into full on mature viruses. Malware removal is typically more difficult than antivirus since there are more unknowns. Rootkit: A rootkit is a clandestine computer program designed by cybercriminals to provide continued privileged access to a computer while actively hiding its presence. Keylogger: A keylogger, sometimes called a keystroke logger or system monitor, is a type of surveillance technology used to monitor and record each keystroke typed on a specific computer's keyboard. Keylogger software is also available for use on mobile devices, such as Apple's iPhone and Android devices. Keyloggers are a legitimate software that can be used for good but are often used as a scam to steal sensitive information like credit card numbers and passwords. Botnet: a network of private infected computers containing malicious code and controlled as a group without the owners' knowledge, e.g., to send spam messages. Using a VPN and encryption, as well as performing regular penetration testing can keep your network secure against malware and APTs. You should also ensure that your hotel's IT team regularly checks on property computers for keystroke loggers and that your staff doesn't open strange email attachments. These are the bare minimum security protocols you must practice regularly to avoid disasters like these high-profile hacks in the hotel industry. High-Profile Malware Attacks in the Hotel Industry Research from Symantec, a cybersecurity firm, found that more than 65% of hotels are routinely leaking booking reference codes through third-party sites. Why is this important? Because the information shared through these codes would allow a bad actor to login to a reservation, view personal details, and even cancel a booking altogether. When this happens, your guest information is vulnerable and you risk destroying the guest relationship. Symantec’s research showed hotels of all sizes are at risk. Major hacks have occurred at HEI Hotels & Resort, Starwood/Marriott and more. Here are just a few high-profile events: HEI Hotels & Resorts In 2016, a data breach impacted 20 US hotels operated by HEI Hotels & Resorts. The attack exposed the payment card data from tens of thousands of food and drink transactions. Malware was discovered on the hotels’ payment systems used to process card information at on-site restaurants, bars, spas, lobby shops, and other facilities. Experts determined that hackers likely stope customer names, account numbers, card expiration dates, and verification codes. Starwood/Marriott In January 2019, Starwood/Marriott discovered that a data breach had exposed the personal information of guests who had stayed at their properties since 2014. Guest data was stolen for around 500 million people – including encrypted passport numbers and credit or debit card numbers. The New York Times reported that hackers may have been working with China’s Ministry of State Treasury, as an attack of this scale is remarkable. Omni Hotels & Resorts Omni was also attacked in 2016 in a malware breach that affected 50,000 customers. Debit and credit card information from 49 of the chain's 60 locations was stolen: including credit and debit card numbers, cardholder names, security codes, and expiration dates. Hyatt At 41 of Hyatt’s hotels, hackers gained unauthorized access to payment card information in the second attack since 2015. Of the second attack, one security expert noted, “It’s possible the steps taken by the Hyatt group back in December 2015 are still being deployed throughout the organization, especially if those systems are dispersed around the globe and not connected by a common network. When choosing your systems management toolset, you need to implement the solution which is secured using 2048bit certificates and two-factor authentication but also works regardless of where the endpoints are located.” Sabre Sabre processes reservations for roughly 100,000 hotels and more than 70 airlines worldwide. The company was targeted in 2017 by bad actors who stole credentials for the Sabre Hospitality Solutions’ SynXis Central Reservations system. Those credentials provided access to customer data, including payment card information and reservation details – customers’ names, email addresses, phone numbers, and addresses. These high-profile attacks grab headlines, but there are hundreds of smaller attacks that happen at hotels each month. Even recently, a massive hack, like the one at Fontainbleu in Miami, has gone unnoticed by the mainstream media. Sources reported that Fontainbleu faced a ransomware attack to their credit card system, forcing the hotel to either compromise guest data by continuing to accept card payments or to ask guests to pay in cash. Guests waited up to five hours for rooms while the front desk tried to mitigate the situation – a scene one person described as “chaos.” “The line was out the door into the lobby,” one executive told Variety Magazine. For a five-star hotel such as the Fontainebleau, an incident like this is absolutely brand destroying. How to Protect Your Hotel Malware Attacks & Cyber Threats What’s the best way to make sure your data stays safe and no guests are left stranded? First and foremost, take extra care in selecting a point-of-sale system and credit card processor. “Agreements with those entities should be vetted and, if possible, modified to add protection and minimum data handling standards for the outside vendor. Compliance with the Payment Card Industry Data Security Standard (PCI-DSS) not only helps to ensure that data security software, hardware, and practices are safer, but also helps to protect against fines and penalties when a breach occurs,” writes one expert. An enterprise-grade provider, like Oracle Hospitality, can secure the vulnerable link between your PMS and POS. Oracle OPERA is a cloud-based property management system that integrates with the Micros point-of-sale system, as well as a suite of other applications. Oracle offers sophisticated security protocols, such as Cloud Security Monitoring Analytics for monitoring the platform both on-site and in the cloud. Oracle tools also include: Cloud Compliance Control (OMC CC) for checking the configurations against company requirements or external regulations; Cloud Access Security Broker (Oracle CASB) to discover shadow IT in the cloud and monitor corporate requirements regarding the use and configuration of Oracle and 3rd party cloud services such as AWS, Salesforce, Azure, Box etc.; Identity Cloud Service (Oracle IDCS) for providing a user management and authentication system for on-premises or cloud services. These security protocols monitor what’s going on in your internal network as well as any external attacks. Working with Oracle gives you multilayer security, data protection, secure transactions, and compliance with payment and data privacy standards. But, as evidenced in the Sabre attack, sometimes even these measures aren’t enough. With the right credentials, anyone can get past your security system. The right technology is only half the equation; over the years, security experts have also identified employees as part of the problem. Hotels must train their staff to handle personal information security, comply with privacy policies, and change user access credentials regularly. This industry has high turnover, which is part of the reason why employees don’t always maintain security standards. Your property should regularly host info-sec seminars to make sure all new employees are trained and veterans stay up-to-date with the latest threats. Even with a great PMS/POS system and the right training, it’s important to perform routine penetration testing and risk assessments. There’s no straightforward answer as to how often you should pen test your network, but experts warn once a year probably isn’t frequently enough. Beyond training your staff, keeping your security software up to date, and investing in a platform like Oracle OPERA that's invested in cyber security, you can encourage your guests to use a VPN and to log out of their WiFi when not using it.
Interested in revamping your hotel pantry this year? Many hotel owners know they need a lobby shop, but they’re not sure how to make the most of their inventory, space, and pricing scheme. The answer lies in visual merchandising, a practice mastered by grocery stores and retailers that use shopper marketing techniques and psychology to improve profits through simple, yet powerful design choices. Smart hotel owners can apply lessons from supermarkets to their lobby shops and on-site gift stores to increase profit and improve the guest experience. Intelligent retail that uses visual merchandising with a data-driven inventory and retail solution can lead to a dramatic increase in profit. Impulsify is one such solution that’s proven to help hotels grow profit from their lobby pantries. Here’s how to improve sales while minimizing deadstock inventory by using visual merchandising. What is visual merchandising? In the retail industry, visual merchandising refers to building window displays, floor displays, and floor layouts to attract customers, highlight products, and boost sales. Visual merchandising meets the need of customers to see and experience a product before they make a purchase. According to the US Department of Commerce, only 14.3% of total retail sales occurred online in 2018. Retail analysts found that “the ability to see, touch and feel products ranks highest among the reasons consumers choose to shop in stores versus online.” Visual merchandising plays a critical role in retail – and hotel owners should take note when they think about how to layout gift shops and lobby pantry stores. Visual merchandising isn’t limited to display windows, though those are a common type of visual merchandising. Other examples include: Store layout: the floorplan of a retail location or showroom Interior displays that show the technical details of a product (e.g., a cross-section of vacuum cleaner to show how it works). Mannequins Point-of-sale displays: products displayed around the register, front-desk, or checkout line to incentivize an impulse purchase. Lighting and interior design, like carpets, window fittings, and ambient light Seasonal displays for holidays like Halloween and Christmas Cross merchandising: displaying products from different categories that go together to increase upsell and cross-sell opportunities (e.g., showing barbeque tools next to charcoal and fire starters). Retail stores like Amazon Go complement the visual displays outlined above with technical elements, like self-checkout, cash-less checkout, or scent and music cues which further entice customers to complete a purchase. Visual elements – like color and design – combine with frictionless checkout to make it easy for customers to buy. Elements of visual merchandising Visual merchandising in retail is as much a science as it is an art. There are five important elements that play a role in visual merchandising: Color: color affects a customer’s mood, brand associations – and even appetite. Use coordinating color to catch the eye of a customer and draw them into your display. Space: every store and hotel has empty space; be thoughtful about taking up that space with signage, customer testimonials, or another product display. For hotels, that might include redesigning your lobby, integrating a retail promotion in your restaurant, or adding displays in hallways between rooms. Focus: create a focal point, or hotspot, around your product. Hotspots can increase sales by 229 percent. Make sure the focal point is at eye-level (or lower) so the customer can actually see what you’re promoting. Narrative: what story does your display tell? Give your display a narrative in three bullet points that tell a customer what they need to know about the product. Signage may not be necessary, but your display should clearly convey a certain message to a viewer. Exposure: The more products customers see, the more they buy. That doesn’t mean you should cram every product into one display. For instance, instead of stuffing as many products as possible into one window, tactfully use a circular store layout to present as much merchandise as possible as the customer browses. Bottom line: use color to catch a customer’s eye, add products as much as you can without looking cluttered, provide powerful signage to tell a story, and make sure the focal point of any visual merchandising display is always the product. Visual merchandising techniques Your sales team and front desk staff can easily integrate these elements of visual merchandising to your guest rooms, front lobby, and other otherwise unused spaces at your hotel. Great visual merchandising starts with discovery. “Who are your target customers? That’s an important question when designing displays. Aim to appeal to their lifestyle or the lifestyle they desire. Draw guests in with great signage, colorful displays, and simple elements that align with your hotel branding. Your on-site store branding shouldn’t deviate from the overall hotel brand experience. Know what your guests expect, and deploy techniques that match your target audience. Visual merchandising works best when you combine the elements of design outlined above with frictionless checkout. A huge piece of this strategy can be executed automatically by implementing the right software and tech tools. Impulsify, for example, offers full-stack systems to manage inventory, design your hotel pantry, and reduce front desk retail traffic by 90%, making it easy for guests to make a purchase in your lobby shop, gift shop, or pantry without stress. Visual merchandising techniques draw in the customer, but it’s the guest’s ability to use self-pay kiosks that integrate with your PMS that result in less inventory shrinkage and higher sales. Use technology to improve retail profits There are some common themes that can be easily rectified by combining cutting edge (yet affordable) retail management software like Impulsify with a fundamental understanding of visual merchandising. First, let’s review the low hanging fruit that’s solved by software automatically. If you aren’t using data to determine prices, you’re likely leaving money on the table. The average hotel pantry is underpricing their retail by nearly 25%. Most hotels are anticipating that guests are going to “flinch” when they see the prices listed in the hotel pantry and as a result, most hotels are pricing on the low end, and losing profit in the process. “Nothing in the store – nothing - needs to sell for less than $2.00. Not Q-Tips, Granola bars, Tic Tacs, a bottle of water or a men’s comb. Nothing.” ~Impulsify Hotels also make the mistake of not recognizing the goal of a guest when visiting a hotel pantry: convenience. Set up your pantry to help guests find what they need, quickly. Consider ways you can group products together to make it easy for guests to fill their basket without a lot of searching – putting Tylenol next to the bottles of water, for instance, or grouping together toiletries. Use signs and a price sheet to make it easy for your guests to get in and out. You can ask front desk agents and bellmen what items guests most commonly request. Your retail management software provider should also be able to provide high level data to get you started on what’s selling in hotel pantries. If they’re really good, they’ll even be able to get you data on what’s selling in your market segment and geography. Perhaps the biggest error that hotels make in their retail operations has to do with the front desk. Front desk agents simply don’t have the capacity to help customers with retail purchases. Picture it: there’s a line of guests waiting for check-in, and a few phones ringing just as someone wishes to checkout with a bottle of soda. In that customer’s calculation, your lobby is too busy to make the soda worth waiting for. It’s a missed sale that can be easily avoided with a pantry POS system. It’s easy for customers to see that barcode scanners and self-checkout tools offer a more appealing option than the zoo at the front desk. Finally, use data to shape product mix and placement. Impulsify’s massive database of transactions can show you what inventory will yield the highest profit. Generally, you should categorize your pantry into four groups: sweet, salty, healthy and indulgent. Keep candy bars together, health foods like granola bars separate, and salty foods in their own zone. Impulsify’s planograms – a visual merchandising planning tool that uses popularity, preference, and relevancy to place products strategically – can help you optimize your layout by category. These are the retail problems that are easily solved by great tech, now let’s dive into ways to grow your hotel’s retail revenue today by implementing visual merchandising techniques. The importance of visual merchandising in hotel retail Visual merchandising can go a long way to reducing wasted inventory and improving profit. First step: prioritize. Hotel guests experience the same challenge as a shopper in a supermarket – choice overload. “In many product categories, reducing the number of choices you offer a customer will improve the odds of making a sale,” explains Forbes. Limit the number of products you offer and a guest will have an easier time choosing a product to buy. For your property, you’ll benefit from spending less on inventory. The incremental revenue achieved when the store is properly merchandised and supplied with quality product offerings is substantial and the guest experience. Once you have your pantry layout mapped according to category, make your pantry more visually appealing. Apply visual merchandising elements – signage, color, and exposure – help guests zero in on what they need. Put candy bars in glass jars or chip bags in baskets to give your pantry the look and feel of a general store. Make sure personal care products are on hooks, forward-facing and easy to grab. Lastly, keep track of what products are being purchased together with a keen focus on tracking inventory, profitability, and sales performance. Once you see that your guests are buying certain products across categories – ginger ale along with anti-nausea pills, for instance – you can be smarter about how you layout product displays. Use data insights upsell opportunities and sunset products that simply aren’t flying off the shelves. This data will help reduce waste while providing your guests with the convenience they really need.
Managing inventory for retail outlets isn't always second nature for hoteliers. It's a bit different than managing room inventory...after all, you can’t swap out your rooms for better ones! There are also two big differences in optimizing the retail product mix for peak profitability: what's on the shelves directly impacts how much product is sold, and what's kept in inventory (and for how long) affects overall profitability. The main objective for inventory management technology is to stock the items that guests want, and keep just the right amount of those items in stock to meet demand -- all without over ordering and leaving too much money sitting on the shelves (especially important for perishable goods). When deployed properly, inventory management can also help with: Efficient use of limited storage. Most hotels are starved for space. An inventory management system keeps you're ordering streamlined and minimizes carrying costs or wastage from spoiled inventory. Choosing winners and losers. As we noted above, the main objective is to get the right items on your shelves -- and keep them there. Inventory management technology separates the winners from the losers, so you stay streamlined on stocking inventory. Promotions and other marketing activities. The technology can guide you in creating promotions centered on high-profit items. Start practicing healthy inventory habits: here are 6 tips to help you run your hotel’s retail operation like Amazon. For this article, we'll be using Impulsify as our reference vendor to illustrate the functionality that helps build these habits quickly. Impulsify's point of sale pantry management solution automates highly profitable lobby retail outlets that grow incremental revenue. #1: Know the costs of your inventory Successful retail inventory management starts with a solid foundation. There are three key terms to understand: Ordering costs. This is the amount of money that you spend on ordering items from vendors, as well as the labor cost associated with making these orders. That second bit is often overlooked! If your staff spends hours each week counting inventory and making orders, it's going to cost you a lot more money than just the goods themselves! Shortage costs. This is the amount of money that you lose from having items out of stock, as well as the opportunity costs of tying up cash in inventory. For example, running out of sunscreen in the middle of summer would lead to lost revenue at your lobby store! Carrying costs. This is the cost of storing your inventory. Each square foot of space has a sunk cost; you have to carry that cost for each item in your inventory. Once you get a handle on these three costs, you’ll be well-positioned to optimize your retail operation. With a point of sale solution like Impulsify your hotel will have real time visibility into these key metrics to make better decisions around merchandising and stocking. #2: Practice FIFO Healthy inventory habits extend to ensuring the health of your guests. Don’t underestimate the importance of using FIFO, or First In First Out, when managing inventory. FIFO means that you won’t waste money on throw away expired goods. This means that staff will rotate stock, and put the fresh items behind the older ones when restocking shelves. FIFO also has a side benefit: it actually makes for more accurate inventory counts. Inventory management solutions can trigger alerts for expired goods based on shelf life which saves time. When you train your staff to always rotate and stock from the back, they take more time with the process. This leads to more consistency in both how items are stocked and how inventory is counted. #3: Be strategic about your SKUs “SKU” is an acronym for Stock Keeping Unit, the global standard in product management. Each product has its own unique SKU, like a fingerprint, so that individual products can be accurately tracked. Each SKU takes up space on the shelf, and a strategic inventory manager will analyze the carrying cost of each SKU to determine whether it's worth it. Unless there’s a reason to keep a product stocked, such as certain necessities, underperforming SKUs would be discontinued. In an ideal world, only high-performing SKUs would remain. Smart SKU management also means that you make bulk orders wherever possible. There’s a cost savings to ordering in bulk, so hoteliers should strive to balance those savings with the carrying costs of storing inventory in the back of the house. #4: Use data to shape product mix and placement Each transaction provides a window into a guest’s mindset; from the time of day to the items purchased to the guest’s length of stay, the metadata is an important piece of the retail puzzle. This information identifies your winners and losers, which then keeps your inventory tight and focused on your guests’ actual needs. Any unexpected discoveries should influence your product mix -- and how it’s displayed on the shelves. A vendor like Impulsify has a massive database of transactions that helps with these product and placement decisions. This database of over 5 million helps it make recommendations about what to stock (and how to display it). That way, you benefit from industry-wide benchmarks and won’t have to only rely on instinct or habit to decide what guests prefer. It’s like having a dedicated store manager -- but without the labor cost.
In 2016, Amazon unleashed a retail revolution: a store without cashiers called Amazon Go. The store uses RFID to automatically calculate what a shopper owes as they leave the store. Without cashiers, the experience is more convenient and far speedier. Amazon Go has now extended its cashier-less experience to 11 stores in 3 cities. As more consumers experience these types of seamless self-serve solutions, from grocery stores to CIBO Express markets at airports, they expect more control and convenience across other interactions. Hotels are beginning to feature these types of experiences in their lobby stores, bringing this convenience and speed to hotel guests. For hotels, the lobby store is a triple threat: it’s an amenity that guests love, it doesn’t cost too much to implement, and it builds a reliable incremental revenue stream. And, with the right technology like Impulsify, the store doesn’t have to add unnecessary layers of complexity to hotel operations. What Impulsify does: intelligent retailing tech One of the leaders in hotel pantry management technology for hotels is Impulsify. Aptly named, the technology encourages “impulse buys” with its guest-facing self-service kiosk product - Shop Pop. On the back end, the system simplifies inventory management, ensuring that adding a lobby pantry won’t also add an unreasonable burden on staff. Together, Impulsify is a powerful system for hotel gift shops, pantries, and grab-and-go markets. Impulsify’s ImpulsePoint technology has a few different features that form its approach to intelligent retailing. There’s both the hardware that guests and staff interact with on a daily basis, as well as software running in the background that optimizes inventory for a specific hotel’s situation. Across both, the experience must be flawless, with intuitive screens that are simple and straightforward to use. Impulsify powered hotel retail experience With Impulsify hoteliers get: Automated inventory management: Staff use a barcode scanner and a portable tablet to track inventory. By avoiding manual methods, such as pen and paper transferred to a spreadsheet, you reduce errors and increase productivity. Impulsify enables guests to easily grab products from your hotel lobby store and notifies your team when supplies are low. The platform delivers data that helps your team optimize the products that you’re selling for margin and volume to take the guesswork out of your retail operation. Self-serve kiosks: The Shop Pop guest-facing kiosks eliminate the need for guests to stand in line for payment. Guests select their own items, scan each, and then charge either directly to the room or on a card -- all without staff intervention. Guests can select items at their own pace, and avoid standing in line to pay. Overall, a better experience for everyone: front desk can tend to other needs and guests enjoy speedier service. Impulsify creates a frictionless retail buying experience for guests which means that they buy more from your shop all the while improving their experience on property. Data-driven decisions: Impulsify delivers real time data to help you optimize inventory selection in order to maximize margins and reduce waste. When you start with Impulsify you will see which products are moving off the shelves and which aren’t so you can optimize your selection. The platform makes it easier than ever to experiment with new product assortments and quickly identify top money-makers. Impulsify can even make recommendations about which products to stock your shelves with because they have data from millions of transactions in their hotel ecosystem. Who Impulsify is for: Hotels of all sizes Given the structure of the category, Impulsify’s core segment is select service hotels with limited on-site amenities. Since restaurants in select service hotels may offer a smaller menu with shorter operating hours than a restaurant in a full-service hotel, these properties benefit from a more tightly-operated “grab and go” market or lobby pantry. Impulsify also works well in the full-service segment, as intelligent retailing technology can be used by any hotel that has a store, gift shop, restaurant or grab and go. For hotels that currently use manual processes to manage and stock inventory, the impact of Impulsify’s automated, data-driven platform can be significant. Given that Impulsify can drive a project from design to grand opening, larger resorts could even engage Impulsify to expand retail offerings in areas of the property that may be more remote. Verified product review on Hotel Tech Report (Impulsify reviews) 5 reasons hoteliers love Impulsify 1. Intelligent strategies for assortment and merchandising. Inventory management is only one part of the equation. The true value of Impulsify comes from how it uses location, guest profiles, hotel size, and hotel type to make smart recommendations about what to stock and how to display it on your shelves. To date, Impulsify has processed over 5 million transactions, giving it a growing database of information so you won't have to rely on instinct or habit to decide what guests prefer. It's like having a 24/7 store manager without the added cost! 2. Self-pay = PMS integration. The self-service kiosk means that guests don’t have to stand in line to pay. They can pay with a card, or charge it to a room. The system integrates with your property management system to pull all purchases to the guest’s folio -- a major benefit to the guest experience. With self-pay, you can also place a kiosk in different areas of a property. Perhaps your golf resort would like to include a “grab and go” pantry in another location away from the clubhouse; self-pay makes it all work. 3. Full design services. If your property is undergoing renovations, you may already have an idea of what you’re looking for. Or, you may want to consider using Impulsify’s specialized knowledge base to design the ideal layout for your hotel’s store. Existing stores can also be renovated to better leverage Impulsify’s novel approach to intelligent retailing in hotels. The design services include renderings, elevations, and ADA-compliant construction drawings, as well as project management for the entire process. 4. Automated shopping lists by vendor. Eliminate tedious manual ordering with Impulsify’s automated shopping lists. Once your hotel implements Impulsify, the system monitors sales to automatically build order sheets. This is an incredible time savings, as staff no longer has to be trained on which vendor provides which product. The automation also prevents inaccurate ordering, ensuring that your hotel either holds excessive inventory nor runs out of things that guests want. 5. Planogramming. 5 in 6 Americans admit to impulse buys -- and a planogram likely contributed to these purchases. A planogram is a diagram that specifies where products should be placed to optimize both store space and shelf layout. A planogram uses popularity, preference, and relevancy to place products strategically so that consumers find what they need -- and, of course, make more impulse buys (such as those candy bars by the grocery store checkout)! Planograms also keeps a store organized, which appeals to consumers and makes re-stocking much faster. Most hotels could never afford a full time planogrammer (up to $47,000 a year), so Impulsify leverages its database of hotel purchases to create data backed planogram models for its hotel partners. Impulsify pricing Pricing varies according to a property’s needs, such as: Number of self-service kiosks Whether or not you need design services Size of the space, as far as number of SKUs managed Number of your properties using the Impulsify technology Length of contract Monthly vs annual billing Based on those factors, you can expect to pay a one-time implementation fee, as well as a flat monthly fee for the software (ranges from $199-249 depending on billing cycle), per the pricing below. Each subscription comes with two USB scanners, ongoing training and support, and account setup. On the hardware side, Impulsify charges some upgrades related to enabling self-pay, as well as for product scanners, kiosk units, and retail sales data analysis to benchmark your retail performance. Get a custom Impuslify price quote for your hotel here Conclusions: Should you consider Impulsify? Incremental revenue is a hotelier’s best friend. If you have an existing store, there’s the potential for capturing even more revenue. If you're building a new property, or considering adding a “grab and go” store to your hotel, Impulsify can help you achieve your revenue targets. Results from a study conducted by Impulsify with 12 select-service hotel clients using the technology are astounding: 49% increase in revenue, 220% increase in profit, 62% profit margins. The results are so good that Impulsify has an ROI guarantee. Also: 20 global chains can’t be wrong! That’s the number of larger brands already using Impulsify to optimize inventories to match shifting guest preferences. Once you add in the self-serve kiosks and mobile inventory management, Impulsify is quite appealing. It reduces the burden on staff while also optimizing profitability of on-property retail. Not to mention a big boost to guest satisfaction. Just like Amazon enabling frictionless checkouts for its customers -- and earning loyalty in the process -- hotels can make a visible impact on its guest experience with a similar approach to giving guests control and convenience. Read Impulsify reviews from verified hoteliers like you
Entrepeneur Nick Kokonas is no stranger to the hospitality business. Mr. Kokonas is arguably at the top of the food chain in what is widely regarded as America's #1 'foodie' city, Chicago. Nick is the visionary behind iconic hospitality concepts such as Next, Alinea and The Aviary. If you haven't experienced these concepts - they alone warrant a trip to the Windy City. From building a restaurant business plan to bringing guests in year after year - Kokonas is a legend. If you decide to go check out his luxury cocktail lounge concept The Aviary, for example, you'll need to book ahead of time since they fill up months in advance. Given the massive demand for his restaurants and limited capacity of physical space Kokonas realized that cancellations on platforms like Opentable were extremely costly to his businesses. Like many great entrepreneurs, Kokonas set out to solve a problem that was personal to him and started pre-selling experiences at his restaurants and bars. In a stroke of genius, Kokonas had figured out how to turn costly cancellations into his most profitable reservations - Tock was born and his restauranteur friends couldn't get enough of it. As disruptive innovation often plays out, Kokonas started in a relatively niche market: ultra luxury hospitality concepts. Opentable (owned by Booking) wasn't threatened as it wasn't their core market. Tock continued to broaden it's feature set building rich guest profiles, a dynamic CRM and offering traditional reservation functionality for their partners and is now on pace to dethrone the behemoth that no longer can afford to look the other way. Today Tock's product is simply better than Opentable, plain and simple. Since it's 2014 founding Tock has processed $290M of prepaid transactions and millions of reservations in 18 countries around the world. The company is now helping not just restaurants but hotels, nightlife venues, wineries and even museums to create, market and sell incredible experiences to guests. Key to Tock's success, Kokonas leveraged his network to secure financing for Tock from top venture capitalists like Pritzker Group Venture Capital - funded by the family behind Hyatt and Two Roads Hospitality. Pritzker VC has an extremely entrepeneur-centric approach to investing given it's evergreen fund structure and has a clear competitive advantage in the hospitality market given the Pritzker family legacy. Tock founder and rockstar restauranteur Nick Kokonas Pritzker VC has had some major exits in the travel and hospitality space such as Single Platform and Tickets Now. The firm also has live investments in: Shiftgig (an hourly labor recruitment marketplace), SpotHero (a parking lot management solutions company), Upserve (restaurant point of sale solutions) and Eved (B2B payments for the meetings and events industry). To learn more about Tock, we sat down with Pritzker Group Venture Capital's Justin Malina to learn about Pritzker Group's perspective on venture investing in the hospitality space, cutting edge trends in the market and why he's excited about the journey ahead for Tock. Justin is truly representative of Pritzker's hands on approach as he was recruited from one of their portfolio companies. Justin is not your typical armchair investor - he's held key roles at massively successful startups such as Sittercity and Instacart so he brings an extremely unique perspective that blends venture investing and startup operations strategy. Pritzker VC's Justin Malina Tell us about your personal journey from working in tech startups to become a venture capitalist My first job out of school was in investment banking, though I knew that wasn't something I wanted to do for the rest of my career. Most of my colleagues left after 2 - 3 years for private equity, but I was interested in working with high-growth companies and thought that working in venture capital or at a startup would be a better path for me personally. I started networking with folks in the Chicago tech ecosystem and a lot of the feedback I received was to go join a startup and gain operating experience vs. jumping right into VC . I took that advice and spent several years as an operator at a couple of consumer tech companies, Sittercity (also a PGVC portfolio company) and Instacart, where I focused on operations and strategy. While at Instacart I learned of a potential opportunity to join the PGVC team. It was tough decision to leave a company on a rocketship, but ultimately I wanted to get some experience on the other side of the table as well as broader exposure to the Chicago tech ecosystem. I also knew that opportunities to break into venture were very rare, especially in the smaller tech ecosystems outside of the Bay Area, and I wanted to take advantage of this unique learning opportunity. What makes Pritzker Group Venture Capital unique? Unlike the typical venture firm, PGVC is an evergreen fund with no LPs. We are solely backed by J.B. and Tony Pritzker and therefore have more flexibility in terms of how we invest. We take a long-term view without any sort of artificial exit timeframes and our check size can range from $500k to $50M. Our investment sweet spot, however, is the Series A/B stage with a check size of $3M - $8M. Ultimately, our goal is to deploy $15M - $20M across the investment life cycle of our most successful companies. The thematic areas we invest in are consumer, enterprise, digital health and a category we call emerging tech (e.g., IoT, AR/VR, drones). We are a national firm, though our core geographies are Chicago, Los Angeles and New York City. We believe the best form of capital is supporting our companies in generating revenue and therefore, we’ve invested in resources such as venture partners, sales bootcamps and a network of customers / partners to help drive growth. What series investment did you participate in? We invested in the Series A, which was a $7.5M round led by Origin Ventures. How is Tock disrupting the restaurant management software market? Tock's value prop to businesses is that its software enables them to offer unique experiences (e.g., tasting menus, special tables, standard reservations), exceptional hospitality and reduce no-shows, all of which ultimately drives sales. For guests, Tock allows them to book the best culinary experiences at restaurants, bars, wineries, pop-ups and events globally. The big vision for the company is to reimagine how reservation-based businesses connect with their customers. Tock's product is a modern SaaS platform that enables a) advanced CRM functionality, b) custom, high-margin upsell experiences and c) prepaid bookings. Significantly, the company's cloud-based platform offers superior functionality relative to OpenTable's legacy tech. Tock offers three pricing editions of its software, ranging from a purely metered plan (% of prepayments, no monthly SaaS fee) to a pure SaaS offering. The company initially targeted high-end restaurants that offered only paid reservations, but Tock has since expanded its focus to typical restaurants that offer free reservations. Read why hoteliers rate Tock the #1 restaurant software on Hotel Tech Report How did you come across the investment? Matt McCall led the deal for PGVC and we had an opportunity to invest based on his relationship with CEO Nick Kokonas. What's one piece of advice you have for hotel tech entrepreneurs when raising capital? In general I'd say be sure to do your homework on the firms / investors you're pitching. Look at the companies they've invested in, the boards they sit on and the stage at which they typically invest. This will help you to be efficient with your time, ensuring that you're focused on the right potential partners. It's helpful to get to know our firm (or any firm for that matter) before you start actively fundraising. Ideally we prefer to start building relationships with entrepreneurs early and track progress over time, which helps our committee get comfort with the team and ultimately the investment opportunity. How do you think the hotel technology space will change over the next 5-years? I think we will increasingly see hospitality businesses look to differentiate themselves through leveraging data, which will allow them to offer users more personalized experiences. This is what Tock is doing with its built-in CRM. For example, a guest that has visited a restaurant with multiple locations can easily be identified when visiting a new location. This gives the business an opportunity to delight guests through better communication and hospitality. People often say that hotels are a bit slow to adopt technology. Do you agree? While that may have been true historically, I think that is quickly changing as these business look for new ways to differentiate their brands and ultimately drive revenues. I think Airbnb in particular has compelled hotels to increase their investments in technology as they compete for the loyalty of mobile-first, tech-savvy millennial customers. In the past, hotels may have been afraid to experiment and negatively impact the customer experience, but I think they're realizing that they're going to need to innovate to remain competitive in today's environment. What's the most suprising thing that you found when performing due dilligence on the hospitality tech market? Although businesses are increasingly experimenting with and adopting new technologies, there is still a surprising amount of legacy technology in use today. OpenTable is a great example of that--its Electronic Reservation Book software was originally built in 1998. If you were leaving venture capital tomorrow to start a hotel technology company - what would it be and why? Personally my background / expertise is mostly in consumer tech, coming from Sittercity and Instacart, so it would likely be something guest-facing. Going back to my point earlier on leveraging data, I think there are a lot of opportunities to use data to provide guests with more personalized experiences. Though I think Tock is pretty well-positioned to do this for hotels in addition to restaurants, so I don't think I'd want to try and compete with them. What is the most interesting or surprising thing that you've learned from investing in hotel tech? There are so many companies tackling problems in innovative ways that I never would have thought about. For example, one of our portfolio companies, Journera, is working to improve the travel experience through building a data exchange for travel providers. The complexities of competitor relationships in the space make this a difficult problem to solve, but we believe this team has the industry knowledge, relationships and proven track record needed to convince travel leaders to buy-in. What is the best book you've read lately? I'm currently reading Bad Blood and I'm fascinated by the history of Theranos. It provides an interesting perspective on why the "move fast and break things" mantra isn't always the right approach. I think it also underscores the importance of always asking the hard questions and trusting your instincts What is your favorite podcast It's hard to choose a favorite, but the one I listen to almost daily is NPR's Up First. It's short (less than 15 minutes) but gives me a great rundown of the news on my walk to work. What is one thing that most people don't know about you? Most people don't know that I participated in the National Spelling Bee in 8th grade and was on ESPN. So I've always been sort of a nerd.