In Japan: How Restaurants Can Adapt Subscription Services To Market Themselves
This time it is all about restaurant subscription apps in Japan which are giving restaurant owners the chance to promote their restaurant to customers who are willing to pay monthly subscription fees, for example for 10 monthly meals or a daily beer:
- Restaurant subscription platform: monthly food subscription with independent restaurants participating on the platform
Previously, we have been looking at how restaurants in Japan are trying to utilize subscription services to market their restaurant:
- Independent restaurant subscription offerings: self-run subscription as membership restaurant
- Marketed restaurant subscription offerings: normal restaurant with additional gadgets and offers for its subscribers
Different genres different subscription services
Shibuya food ticket service: POTLOCK
The POTLUCK is a food ticket subscription service, which focuses on the Shibuya area as their beachhead market targeting the younger generation who are already using other digital subscription services. On the mobile app (Android and iOS) there are two basic plans available: Either 12-ticket plan or the everyday plan. 12 food tickets cost 590 JPY per food order (validity period 30 days). The everyday plan is 397 JPY per day and can be used for lunch or dinner. A trial plan for 3 food tickets which changes automatically in the 12-ticket plan is also available. Also, a 3-ticket plan with no time limit is available for 650 JPY per food order. In order to make it easy for the user to stop the subscription in the case of a business trip or long holiday, one can easily stop the subscription for a maximum of 2 months.
From the restaurant’s perspective besides the additional reach of customers via the platform, the pre-order system (the user has put in an order during the prior day) gives the restaurant a defined number of orders to prepare in advance, thus better planning and efficiency. The main advantage for the users is the availability of cheap lunch & dinner options without having to worry about paying at the restaurant.
Stopped service: FOOD PASSPORT
Yet another food subscription service is the FOOD PASSPORT. For a fixed 980 JPY per month the user can eat 10 meals from one of the participating shops. Per day 1 meal at most. The service has currently stopped since 2020/04/30 and its resumption is still not announced. Before the Corona crisis they apparently had over 1000 shops on their application. Within the Japanese services this offering is by far the cheapest for one meal with 98 yen per meal.
Compared to POTLUCK for example, the user can just visit the restaurant and order ad-hoc. Even though the company advertises the service with the merit of reducing food losses of overproduce or leftover inventory, it seems very difficult for the staff to exactly predict the surplus of demand through the app prior to the purchase. Here POTLUCK implemented the day-before ordering allowing the shop to relatively plan in advance.
Yet another suspended service: Always
The food subscription service, operated by the startup IJGN is Always. Their app aggregates different subscription services from cafes, restaurants and bars. The services can be either subscribed to separately, but they also provide three service for using a certain category on their platform:
- Always BAR: 4980 JPY/month (content depends on participating bars)
- Always LUNCH: 7980 JPY/month (one lunch per day)
- Always CAFE: 4980 JPY/month (max. 2 drinks per day)
Compared to POTLUCK, they already cover multiple service areas. Besides the Shibuya and Shinjuku areas, they have already expanded to Kansai (Osaka, Kyoto, Kobe) and Kyuushuu (Fukuoka, Kumamoto). The use is relatively simple. The user just shows the shop staff their subscription pass via the mobile app and can use the subscription benefits. It has to be noted that currently they have suspended their “always” subscription services during the ongoing coronavirus outbreak for an undefined time period.
Subscription for Cafe lovers: CAFE PASS
CAFE PASS, a monthly subscription service for cafes, is also suspended at the moment. For 900 JPY the user can drink 3 drinks free, from the fourth drink the user receives a 50 JPY discount on any other drink. In February 2020 they had 185 shops on their platform covering not only Tokyo but also Nagoya, Fukuoka and other places. The service seems to be focusing on smaller neighborhood cafes to attract local cafe lovers.
Welcome drink subscription: HIDEOUT CLUB/GUBIT
Specializing on night establishments, HIDEOUT CLUB is a subscription service for bars, especially for whiskey bars. The membership costs 1500 JPY and offers the user everyday a free welcome drink at the bar visited. Mainly in the Shibuya and Shinjuku area over 80 bars are registered. A very similar service is GUBIT. For only 980 JPY per month the welcome-drink subscription service is available at over 500 bars in the Tokyo metropolitan area. The user can select depending on the bar one drink per day (wine, beer etc.).
Food rescue subscribed: Reduce GO
A completely different approach is taken by Reduce Go. Reduce GO ties food waste prevention with the subscription model. For monthly 1980 JPY the user can pick up food leftovers from nearby shops. Based on their webpage the stats so far are 20,745 meals saved, 107974 JPY donated and 234 shops are participating in the program. 59% of the monthly subscription fees are distributed to the shops depending on the number of orders and total order ratio. 2% of the revenue is donated to social projects, resulting in a total revenue stream of 39% for Reduce GO. The 2% donation raises the companies credibility in front of the customers and the shops as well conveying that they are all working towards a sustainable future.
How it works: the shop can post leftovers with a short description and picture. Price settings are not necessary and make it relatively easy for the shop staff in their busy workday to quickly post new items on the mobile application. When orders come in, they can confirm the orders via the mobile application. The user just has to show a specific order code at the pickup.
The merits for the shop are approaching new customers, polishing-up their sustainable brand image with contribution to the SDGs, lowering the food waste costs (for a comparison depending on the area food waste collection costs range roughly from 20 to 40 JPY per kg in Tokyo) and foremost generating additional revenue. For the user-side the biggest plus points seem to be the feeling to help the environment and easy quick food rescue receiving food for low cost.
The key take-aways
- For the restaurant owner: Enhanced financial certainty through constant inflow of the subscription fees
- For the restaurant owner: when working together with subscription platforms it gives them access to new customers generating extra revenues
- For the customer: broad growing selection of participating restaurants and possibly a good deal when using the subscription service often enough
- For the customer: having some kind of exclusivity and feeling to be part of a supporting community leveraging social network effects (for the independent subscription offerings)
Especially in COVID-19 times some subscription services already have been suspended for a unforeseeable time period. As restaurants are struggling to survive, so are the subscription platforms.
Post-corona some services could make a come-back, but a majority might be have their shutters down forever.
Subscription services will be a growing category, but rather using physical outlets the trend might shift to pre-prepared food delivery or groceries delivery subscription offerings, where the food is stored and prepared in warehouses.
The ongoing COVID-19 crisis is driving the demand for food delivery out of so-called dark or ghost kitchens (my take on dark kitchens in Japan). Subscription offerings could also work with virtual brands in dark kitchens to have reoccurring revenue streams.
