Zomato Gold a game-changer; logout campaign hurt restaurants bill by 20%

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Published: September 21, 2019 6:46:02 PM

Gold, which allows members buy-one-get-one-free dining at 6,000 restaurants, had led to restaurants starting a movement to logout from the program.

Stating that high discounting cases are largely in cases of multiple unlocks, it said multiple unlocks are now limited and will bring down the average discount for Gold partners.

Zomato Gold, the discounting scheme that has been at the centre of an intense standoff between food delivery platforms and restaurants, is a game changer in driving business, with food joints that logged out of the program seeing 20 per cent dip in bill volumes, an independent research by RedSeer said. “Gold partner restaurants have benefited significantly from the program,” the RedSeer report said. “Business growth has been significant for partner restaurants after Zomato Gold.” Gold partners have witnessed about 35 per cent growth in bill volumes after partnering with Zomato Gold and weekday growth has been marginally better than weekend growth, it said in its ‘Zomato Gold Effectiveness Assessment’ report. “There has been a 20 per cent decline in bill volumes for partners after they logged out of Zomato Gold programs,” it said.

Gold, which allows members buy-one-get-one-free dining at 6,000 restaurants, had led to restaurants starting a movement to logout from the program. The report, which presented an analysis of the impact of Zomato Gold partnership for the restaurants based on research of existing members and partner restaurants, said, “Zomato Gold has been a game changer in terms of driving the dine-out habits of customers.”

Quality of revenue has also improved for partners who are a part of Gold program, it said, adding 60 per cent of the Gold partners agree that there has been an increase in new customers coming in because of Zomato Gold. Also, 55 per cent of the Gold partners have witnessed an increase in visit frequency of Gold customers, it said. “Average discounting on bills with Gold discounts is about 27 per cent.” “Customers tend to try out new restaurants because of Zomato Gold programme — 90 per cent of Zomato Gold members try out new restaurants just because of Zomato Gold program,” it said. As much as 70 per cent of the Gold members initiate their discovery via Gold page on the Zomato app. Stating that Gold members dine out more frequently because of Gold discounts, it said: “Dine-out frequency for Gold members has increased from 2.8 to 3.3 times/month after subscribing to Gold membership and is 50 per cent higher than that of non-Gold members.” Also, dine-out spend for Gold members is higher than non-members. “95 per cent of Zomato Gold members order more number of dishes/drinks because of Gold discounts,” it said. “Pre-discount average bill value for Gold members is about 11 per cent higher than non-members.”

Pre-discount average bill of non-members is Rs 2,170 as compared to Rs 2,400 average billing of Gold members, the research found. Gold partners have witnessed a 25 per cent increase in bottom-line largely driven by better utilisation of the same infrastructure, the research said. “47 per cent bills get discounted via Gold programme — almost equally between existing and new customers. Even with this discount,

Gold partners have better bottom line owing to increased utilization of existing resources.” RedSeer said high discounting cases will be addressed with the recent changes to the Gold program. “Since every user will now need to buy membership (cannot share logins), and the membership will be costlier, it will deter these members from getting into the program.” Shortly after the #Logout campaign began, Zomato announced 10 changes in response to concerns of deep-discounts hurting restaurant profitabiliity, including a once-a-day limit and a doubling of the annual subscription price. Stating that high discounting cases are largely in cases of multiple unlocks, it said multiple unlocks are now limited and will bring down the average discount for Gold partners.

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