Sunday, July 23, 2006

Foreign thinking

Imported from a place with its own business precepts, Aroma doesn’t always see the sense in American restaurant conventions, even as it chases such homegrown mega-successes as Starbucks. Consider, for instance, how the Israeli chain’s first U.S. outpost is using prices to manipulate customers’ behavior.

Most U.S. restaurateurs set their fees with the simple objective of maximizing revenues and traffic. It’s all about pulling volume through the door.

But Aroma wants to shoo customers out as much as it wants to woo them in. The beachhead sandwich and espresso shop, just south of New York University in New York City, offers a 10 percent discount on all to-go orders. The tactic allows the concept to minimize seating without antagonizing patrons who want a place to sit but can’t find one. And that plays into the larger goals of lowering costs and fostering traffic.

The practice is common in Israel, where it’s helped the chain maximize the profits of its 73 other Aromas, some of which reportedly take in the equivalent of $1.2 million annually. But over here, it’s a virtually unknown tactic, and one likely to be treated by U.S. restaurateurs as heresy, if not lunacy. Indeed, some brands here charge extra for takeout, since it involves additional packaging, just as others levy a delivery fee.

And what’s the sense of extending a discount on such a huge part of the business? How can you forgo such a big portion of a price that’s been calculated to realize a certain profit margin?

Maybe they’re just looking at the matter with an American bias. They see the take-out price as a discount, instead of viewing the eat-in charge as carrying a premium. If you want a sandwich and latte to go, you can get it at this price. If you want to stay and eat, you’ll have to pay one-ninth more for that added service.

And then there’s the effect on building costs, of leading customers to make you truly a take-out place, so you need fewer seats. It could mean a whole new calculus for projecting prices and profits.

It’s all about building on what you know, with what you wouldn’t have thought.

No comments:

Post a Comment