The Covid-19 pandemic tested Malaysia’s food and beverage industry (F&B) like never before. Businesses faced all kinds of challenges, from adhering to strict lockdown SOPs to supply shortages and even having to shut down outlets due to rising cases.
But while business was slow offline, the digital space is a different story. People still need to eat and online channels allowed them to get food from the safety of their homes. For F&B businesses, the rise in online traffic gave them an opportunity to retain their everyday customers and attract new ones at the same time.
To align with the changing consumer behaviour, F&B businesses must double down on digitisation efforts. We’ve laid out the current digital trends shaping the F&B industry in Malaysia along with key steps you can take to maximise the new opportunities that emerged in this pandemic.
Why F&B Businesses Need to Adopt Digital
If you are an F&B company in Malaysia, increasing your digital capabilities is crucial to surviving beyond the pandemic. Here’s how your business will benefit by growing a digital presence.
#1 Engage Customers
As movements were restricted and shops were not allowed to operate normally, there was a huge rise in digital consumption. From increasing social media use to buying goods online, the digital space is where businesses need to pivot if they want to reach their customers. By building an online presence, you can get to know your customers better to develop more targeted and personalised promotions.
#2 Streamline Operations
One of the key flaws of offline operations is how fragmented it is, which leads to errors that not only cost your business but also worsen the customer experience. By going online and integrating all of your touchpoints, you can achieve operational excellence. Digital solutions offer real-time visibility on your inventory, sales transactions and order delivery so you can optimise operations and solve problems quickly.
#3 Improve Products
Consumer demand changes according to trends, which come and go quickly. One way to keep with the trends is by tracking sales performance in real-time with digital solutions. Keeping track of consumers’ buying behaviour allows you to understand their preferences and create products that are in demand.
#4 Scale Business
With the right strategy and digital solutions, businesses can grow at an exponential scale. Going online means getting your hands on more insightful data and information that will empower your business to disrupt the market. The automation of tasks also helps to save operational costs while allowing more time to analyse trends, uncover opportunities and make informed decisions.
Want to build your digital presence? Download our free guide below for a step-by-step guide on transitioning online.
Digital Trends in the F&B Industry
The F&B industry was put to the test in the pandemic – from surging demand to disruptions in the supply chain. But in the face of these challenges, digital transformation went into hyperdrive.
The focus was on optimising processes while building resilience into the supply chain to avoid another crisis. Digital trends that facilitate this goal began gaining popularity in the food industry in Malaysia.
Cashless Payment System
Cashless payments are made without hard cash via credit or debit cards and online payment systems like e-wallet. This method of payment is more secure for businesses and also provides safer, contactless transactions to customers, which is crucial in this pandemic.
E-commerce
E-commerce allows F&B companies to sell their products online. During months of lockdown, online channels gave businesses a chance to survive by connecting them with customers in new markets.
Food Delivery Services
The rising demand for food delivery is unmistakable – companies like GrabFood and Foodpanda saw a 30% increase in orders since pre-Covid. Consumers staying at home have made it a habit to get food delivered as it is the most convenient option.
Social Media
More traffic online means greater opportunities for exposure on social media platforms. F&B businesses have caught on to this and are using social media creatively to engage customers and promote their products. Many businesses also use social media as a sales channel to sell directly to their customers.
Curbside Pickup
F&B businesses can offer curbside pickup to customers so they can collect their order from the restaurant without waiting for it to be delivered. This is a growing trend in Malaysia as customers don’t have to wait so long. At the same time, F&B outlets can rely less on third-party applications.
Omnichannel
An omnichannel platform integrates offline and online customer touchpoints for a seamless experience. With all your channels integrated, you can also gain deeper insights on customer behaviour to create personalised services and promotions.
Cloud POS System
Restaurants are transitioning to cloud-based Point of Sales (POS) systems, which allows them to track sales and inventory data across all channels in real-time. This technology allows businesses to operate more efficiently while also empowering them to make smarter decisions.
Cloud Kitchen
For F&B businesses that want to cut down costs, look no further than cloud kitchen – a centralised commercial cooking facility for takeaway orders. For times like MCO or for outlets that see a higher demand for takeaway, a cloud kitchen is a great option as the startup cost is low and you can eliminate furniture, building maintenance and wait staff salary costs.
How to Accelerate F&B Digital Transformation
One of the main issues businesses face is a lack of know-how on digitisation. An F&B company in Malaysia that wants to successfully go digital should follow these key steps.
The Four Stages of F&B Digital Adoption
Digitisation is a long process and the technology or solution that your business needs depend on your readiness and adoption level. For this reason, we have broken it down into four stages, from beginner to expert.
Understanding which stage you are at can help you complement your business with the right tools or services that will bring the most value. We’ve also recommended solutions for businesses at every stage based on your digital needs so you know where to start depending on where you are in the digitisation journey.
#1 Beginner
Traditional F&B businesses like restaurants, cafes and street vendors have struggled the most in the pandemic. They rely on regular customers and dine-ins, which disappeared in MCO. To survive, these businesses need to align with changing consumer needs and find a way to get customers despite the restrictions.
Digital adoption:
- Very low digital awareness.
- Rely on manual and cash transactions.
- Lack the knowledge and skills to digitise.
Pain points:
- Not meeting consumers’ changing needs.
- Decreased footfall due to MCO restrictions.
Digital solutions:
- Cashless payment system (e.g. QR Code, e-wallet) for hassle-free transactions.
- Food delivery services to get more traffic and orders.
#2 Competent
Competent businesses are no stranger to digital solutions as they have already taken the leap. At this stage, you will have already adopted the basic digital solutions and experienced an influx of traffic. The goal now is to establish efficient and fast order processing to meet the rising demand.
Digital adoption:
- Some digital awareness.
- Business is mainly non-digital.
- Started using digital solutions to drive sales.
Pain points:
- Not equipped to handle different channels simultaneously (e.g. social media and food delivery services)
- Slow transactions with manual order processing through WhatsApp or Instagram.
Digital solutions:
- Get a cloud POS system to process all orders from a single platform and improve transaction speed.
- Use social media to promote the business and organise campaigns seamlessly.
#3 Proficient
F&B businesses in the proficient stage have built their knowledge on digitisation and are already utilising many digital solutions. However, there is always room for improvement. Digitally proficient businesses can build on the online presence that they already established to improve operations and generate more profits.
Digital adoption:
- Above-average digital awareness.
- Uses limited digital solutions.
Pain points:
- Digital growth needs to be accelerated to make up for poor offline sales.
- The cost to maintain a physical store and keep staff is high during MCO.
Digital solutions:
- Expand into e-commerce by setting up own online store.
- Set up own food delivery platform with more control on prices and promotions.
- Cloud kitchen to eliminate costs that can be reallocated towards digitisation.
#4 Expert
At the expert stage of digital adoption, F&B businesses are ready to disrupt the market. They use digital tools that not only increase operational efficiency but also enhance the customer experience. The goal at this stage is to leverage the digital ecosystem and make the most of the technology to drive sales and increase profit margin.
Digital adoption:
- High digital awareness.
- Up-to-date on latest digital trends.
- Uses digital tools extensively for business growth.
Pain points:
- Profit margin affected by third-party food delivery services.
- Lack of data on customer behaviour to create tailored promotions that boost sales.
Digital solutions:
- Build an omnichannel platform for a seamless customer experience online and offline.
- Offer curbside pickup through the omnichannel platform to eliminate third-party apps.
- Use data on customer behaviour to create personalised promotions on social media.
Start Digitising Your F&B Business Today
The right digital solution can help you streamline operations and offer the best experience to your customers – driving profit and allowing your business to scale. However, it’s important to not bite off more than you can chew at the beginning and choose technology that can address your biggest pain points first.
Dropee empowers F&B businesses in the B2B space to sell smarter and grow their business online. Get in touch with us here to learn more about how our digital solutions can help you!
0 Comments