Rishi Taparia - Issue #71
This week we explore Burger King’s app acquisition strategy, the Uber Eats effect on restaurants, interchange’s rapid descent to zero, Carlos Ghosn and Nissan, Anthony Bourdain as told by others and more. Enjoy!
Commerce
Burger King has a new penny Whopper deal – but you need to head to McDonald's first
If you thought last week’s Paylessi move was genius, you’ll love this week’s move by Burger King. The burger giant went all out troll, offering Whoppers for $0.01. The catch - you had to download their mobile app and place the order from none other than McDonalds in a promotion called the “Whopper Detour.”
No, you can’t have it your way at McDonald’s – but you need to be close to the location of one to get the Burger King deal. The promotion is part of Burger King’s relaunched BK app, which now offers the ability to place orders in advance for participating locations.
Uber Eats Is Killing the Sociable Restaurant Experience
A look at the history of restaurants (fun fact: restaurants used to primarily serve “restorative” soups, hence the name), the social nature of the space and how the dining experience is “becoming less sociable and more atomized” thanks to the likes of delivery services like Uber Eats.
Third-party delivery: How to turn a necessary defense into a meaningful offense
Along the same lines as the above, a somewhat self serving post from Thanx, a loyalty company focused on helping restaurants and retailers build a more loyal customer base, but that being said, some good insight here on the challenge of delivery services to restaurants. The convenience of ordering food at the tap of a button has turned into a massive business, projected at $9bn a year in the US and growing 50% Y-o-Y. However, that could be crushing to businesses who rely on the margin from delivery to support a near zero or potentially negative gross margin business otherwise.
Exclusive: Amazon targets airports for checkout-free store expansion
This makes a ton of sense to me. Amazon is exploring bringing its futuristic checkout-free store format to airports in an effort to win business from hungry, time-pressed travelers.
FinTech
Mastercard, Visa Propose Cutting Fees for European Merchants
In the latest installment of “interchange heads towards zero”, EU regulators said Mastercard and Visa have agreed to lower the fees assessed to merchants when they accept debit or credit cards issued outside the region. This means that for anyone traveling to Europe, interchange fees get capped at 0.2% for debit and 0.3% for credit. Granted this is still a proposal, but if implemented it would be a major headache for US banks in particular, most of whom have focused on building their affluent customer base via great rewards benefits that have hoped to receive some payback on through higher travel interchange.
Retailers Embrace Payment Apps to Sidestep $90 Billion in Swipe Fees
Retailers around the world have long sought to mimic Starbucks when it comes to mobile wallets and for good reason - this year almost $100bn in credit card fees will be paid. By having customers load funds into a closed loop mobile wallet (usually via bank account to avoid fees altogether), merchants can avoid paying fees altogether. Now, while I understand the desire for retailers to push back (in the age of the internet and low fixed costs there’s no way interchange should be as high as it is), the reality distribution is key for any payment instrument and getting distribution is hard. Unless there is a major incentive (see: massive discounts) for the consumer to use an atypical payment method and it’s used often enough for a habit to build, the likelihood of any major challenge to traditional cards is low. For Starbucks and Walmart it could make sense, but most retailers will have to grin and bear it…for now.
How the Cashless Economy Shuts Out the Poor
There has been a massive push towards cashless over the last five years, with some restaurants actively not accepting cash or cheques, relying solely on credit cards or mobile wallets. While most of you likely would see that as a major plus, who has (or more importantly, doesn’t have) access to technology is often overlooked given desire for rapid innovation. With “close to 7 percent of American households have no one in them with a checking or savings account, while an additional 19 percent are considered “underbanked,” meaning that they rely on products or services outside the conventional financial system”, a move to cashless can be incredibly exclusionary.
Technology
The Friendship That Made Google Huge
An awesome New Yorker profile on two (different) personalities and how their relationship has helped Google develop into the behemoth it is now. I liked this piece because in a world that typically likes to glorify the accomplishments of the individual, it highlighted the need for collaboration and benefits from partnership.
Carlos Ghosn's Arrest and the Backlash to Japan, Nissan
For those of you who haven’t been paying attention to this story, read this article. This is going to be a major motion picture one day, mark my words.
Random Tidbits
Millennials Didn’t Kill the Economy. The Economy Killed Millennials.
Everyone is talking about how millennials are changing everything, from commerce and retail to the future of work and home buying. The entitled generation. The experience generation. Is the reality actually that millennials are being changed by everything?
FEEDING THE FUTURE: How Innovation and Shifting Consumer Preferences Can Help Feed a Growing Planet
A long and detailed report by Citi bank on innovation in the food and agriculture space. With the population expected to expand to between 9 and 10 billion people this century, this is one of the major questions for our generation.
The Enormous Life of Anthony Bourdain, According to Those Who Knew Him Best
I thoroughly enjoyed Anthony Bourdain while he was alive. His death was tragic and a reminder of life (and the mind’s) fragility. This is a terrific look at the man, as remembered by his family and close friends.
Quote I’ve been thinking about: “…endings can also be a positive force. They can help energize us to reach a goal. They can help us edit the nonessential from our lives. And they can help us elevate—not through the simple pursuit of happiness but through the more complex power of poignancy. Closings, conclusions, and culminations reveal something essential about the human condition: In the end, we seek meaning.” - Daniel Pink