Dynamic Pricing for F&B......(Still Thinking)

Imagine these scenarios:

1. Your slow day at the bar - lets do a ladies night free or Happy Hours ( Congratulations you have reached the level one of #DynamicPricing but the concept is not always about discounting)
2. You have a few dessert items left in your fridge and you know you can't use them tomorrow. You tweak your #DynamicMenu to ensure that these dessert items either go on a quick discount or get clubbed with some main dishes as a great offering. Bingo you have saved on your pilferage and you have made your money!!
3. You have a slow meal period coming up based on current reservation trends and you want to create some quick promotions. #DynamicPricing will help you do that and you can use your integrated CRM database linked to your Table Management Solution like TableCheck or Servme to target your key customers.
4. Your meal period is expected to be super busy and you want to ensure you are optimizing your tables. You tweak your pricing to sell the right mix of combinations (example a steak and glass of wine) so that you have an upsell.
5. A busy meal period coming up, you want to have a high turnover of your tables. Let's simplify our Kitchen Workflow by selling limited items (that sell a lot) with right beverage combinations. That will mean limited mise en place, limited ingredients and faster prep time for food items in kitchen resulting in quicker meal times and faster turnaround

With Inflation touching it's peak in most of the markets - developed or developing, I am sure the consumers (like me & all of you) are feeling the pinch when you go out and spend on F&B. And if the consumer spending goes down, the pressure of costs and margins comes heavily on restaurant operators (hotels or stand alone - doesn't matter).

In this article published recently in QSR Magazine (Is it Time for Dynamic Pricing in the Restaurant Industry?), Prof. Sherri Kimes talks about my favorite topic of #DynamicPricing. As hoteliers, we understand the concept well in terms of our rooms function but the overlay of this onto F&B is still none to limited.

In my experience, the concept has not been sold effectively to hotels and owner groups and there is still lack of awareness that is causing the industry to stay away from it. (Which also brings in an important concept of #StoryTelling but for another day's discussion)

As a concept, it's not about increasing pricing but having better pricing (Pause : Go Back : Read again - it's different)!!. And when you have better pricing, you sell better...

Another twist to the concept is having #DynamicPricing and complementing this by having #DynamicProduct offering.

Most of the new age technology products like JUICER or DynamEat indeed give control of pricing in your hands. So it's a myth that a machine or a system will take over and suddenly the price of a pizza will change from X to Y within a same meal period. No, it will not until you want that to happen.

When you want to apply your dynamic pricing controls (up or down), this might be driven by various other data points (equally important to have) - What are your slow/fast days? What are your slow/fast meal periods? Weekdays vs weekend trends? Margins of food items? Shelf life of products?

And do you know that you can effectively use Dynamic Pricing/Product model to also manage your kitchen workflow (average time taken for preparing a dish and serving). The opportunity is tremendous. (Thank you Gianni Di Fede and Alessio Di Gaetano for sharing your valuable insights during our discussion)

The technology and the integration of new with old is however the key to decision making (and sometimes the biggest roadblock). But as Prof. Sherri Kimes says - Don't be afraid and experiment until you find the right mix of things (your personalized recipe of #DynamicPricing)

If you are interested to know more, do try and attend the HSMAI MEA #ROC2022 on Nov 28&29 at Conrad Dubai. I will be moderating a session on "I ALSO SELL F&B" and I will be joined with leading industry experts - Stephanie AbouJaoude , Daniele Carrai , Philip Mahoney and Ashwin Kamlani . Block your dates and look forward to exchanging notes and learning from all of you.

Opinions?expressed are solely my own and?do not?express the views or?opinions?of my employer