Tempest-Jody Larrichia, Director of Brand at Flash Coffee | Photo credit: Flash Coffee

In 2016 Jack Ma coined the term ‘new retail’ – the advent of a fully digitised gateway to consumer purchasing behaviour. No two events have shaped the new retail era greater than the Covid-19 pandemic and the coming of age of Gen Z – both in their growing spending power and as the first digital-native consumers.  
 

Moreover, no industry has been at the sharp edge of these changes more so than hospitality, which poses two major questions as we look to the next generation of experience and engagement. Firstly, how can hospitality respond to these dualities while building meaningful and engaging brand experiences? Secondly, how do we serve the needs of the first truly digital generation? 

Ensuring customers are at the centre of product, service and culture – the three pillars of brand purpose – is essential. Knowing customers allows brands to translate data into insights, which is crucial for brand teams when crafting meaningful connections between product and service. 

Gathering insights – from staff training to product offer and customer interaction – across every touchpoint is vital for creating brand experiences built today and ready for tomorrow. It is also essential to ensure digitisation takes that deep consumer-focused knowledge and creates meaningful solutions that address customer pain-points. Not just adding digital for digital’s sake – but truly answering the need of the customer before they ask the question. 

After the pandemic, which saw what McKinsey termed ‘a decade in days’ in terms of digital adoption, we are moving back to personal service focused environments where the human factor is bridging the gap between digital and physical. 

In hospitality, we see evolution in two ways. Firstly, in moving beyond core product offer to create more ways for the consumer to connect. Secondly, through the rapid integration of artificial intelligence (AI) to further entrench a tech-first approach. We’re all familiar with the notion of a coffee shop in a bookstore and we’ve also come to expect that a fitness club sells smoothies. 

“The human factor is bridging the gap between digital and physical” 

It’s in this ‘360-degree’ offer that we see multiple levels of growth opportunity as hospitality brands transition into lifestyle concepts that consumers both purchase from and identify with. Technology plays a key role in fostering these strong in-person brand experiences. 
 

A great example is Pret A Manger, which expanded its product offer and adopted a tech-first approach after its town centre and transport hub stores were hit hard during the pandemic. In 2020 it launched at-home products, including packaged coffee and a ready meal range. However, Pret’s in-store coffee and food subscription has been the real star and is credited with the chain’s quick rebound to profitability following the pandemic. 

With nearly 60 million redemptions in 2022, Pret’s app-based subscription is now a key pillar of its service proposition and has been rolled out across the UK, US and France – with UAE, Hong Kong and India launches slated for 2024. 

When it comes to tech, we see a splintering to three clear uses – ease of order; community; and storytelling. McDonald’s are banking on even greater use of tech. In 2014 their digital team stood at three people – today it’s over 130. They’ve invested $300m in AI start-up Dynamic Yield and recently acquired voice technology start-up Apprente. The task of these multiple tech streams is to overcome challenges in every aspect of the order process, restaurant dining, drive-thru and home delivery. 

At the premium end of the market, Soho House responded by blurring physical membership with a vast digital community space. Members boards, connections and seamlessly connected online events have created a global neighbourhood for members wherever they are. 

Meanwhile, Starbucks and The Ivy restaurant chain are leading the way in app-based storytelling – Starbucks with the Odyssey extension of its world-beating Rewards platform and The Ivy by adding a Soho House-style community membership scheme through its app, which features reviews and testimonials from users. It’s an approach that echoes fashion giant Zara in user-generated content directly to its app and website to create a genuine connection between product and service. 

Data can help brands shape hospitality experiences of the future through digital-led, physical spaces | Photo credit: Blake Wisz

Data tells us that Gen-Z demands more authentic experiences, trusts brands less and is lonelier than any generation before. Data can help brand leaders shape hospitality experiences of the future through user-generated content, community and digital-led, physical spaces that wrap around customers at each step in the purchase journey. 

It is here, at the intersection of these multiple streams, that I am taking my experience shaping the global proposition for brands as diverse as PUMA, Ted Baker, and Whites, into the next-generation design for Flash Coffee. Working alongside our founders, David Brunier and Sebastian Hannecker, and the incredible innovators in our leadership team, we’re crafting the next generation of our brand experience. 

We were one of the first coffee chains to market in Asia with a truly digital-first proposition. Today, we are evolving by placing loyalty and storytelling at the heart of our digital proposition. 

While in the physical space, across our markets we’re known for our vibrant yellow and pink store environment. We are moving forward, blurring the boundaries between a coffee-first proposition into merchandising and multiple revenue streams at the heart of our offer. We’re also responding to customer insight and feedback, premiumising our core brand yellow, in an environment evolving alongside our core young professional customer. 

A digital-first approach doesn’t mean the end of in-store experience. It means we as brand guardians must keep evolving and strive to make the physical space mean more while always looking ahead to build rich and meaningful solutions with the customer at the heart of decision-making.  

This article was first published in Issue 17 of 5THWAVE magazine.

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