Michel's trials online delivery for cakes

Cake and coffee brand's latest digital investment comes as parent company announces store closures and impairment charges off the back of tough retail conditions

Australian café chain, Michel’s, is claiming an Australian first for franchise café brands after launching an online home delivery service for cakes.

News of the trial came just days after Michel’s parent company, ASX-listed Retail Food Group (RFG), announced an $87.8 million net loss after tax in its first half and plans to close up to 200 stores across the country.

RFG’s national network of QSR brands includes Michel’s, Gloria Jeans, Crust, Donut King, Brumby’s and Pizza Capers.

Launching a home delivery service is about keeping up to speed with increasingly digital, stay-at-home customers, Michel’s brand manager, Tom Elliot, said. The three-month trial is already underway across three franchise-operated stores and will run until 13 May.

During this time, weekly sales and customer counts across trial stores will be monitored in order to gauge engagement and success. A flat $5 delivery fee will be added to the bill and the service is available on purchases over $30.

“A major component of the Michel’s strategy moving forward is to investigate new, particularly digitally focused, methods to increase customer count and sales,” Elliot said. “The purpose of this trial is to test a cake delivery ecommerce solution that will offer customers the option to easily purchase products without having to visit a store for pick-up.”

To offer the home delivery service, Michel’s is using Stripe technology, a payment gateway safe for customers and cost-effective for franchisees, a spokesperson said. The brand has also created a dedicated microsite, with all digital advertising for the promotion being geo-targeted to users surrounding the three stores.

The company claimed it’s one of many digital firsts in its history. Last year, Michel’s launched 3D image printers in cafes across Australia.

“We understand that consumers are leaving their homes less and relying on online delivery services more, so it makes perfect sense for us to capitalise on this trend through our new cake delivery concept,” Elliot added.

RFG has experienced a tumultuous first half, reporting a 31.8 per cent drop in half-year profits to $24.7 for the six months to 31 December 2017. This, combined with nearly $138 million in costs thanks to an $84m brand systems impairment charge, inventory write-downs and the store closure program, left the organisation with whopping 282 per cent fall in EBITDA and net loss after tax of $87.8 million for the first six months. This was despite a 20.8 per cent rise in total revenue for the first-half to $195.5 million.

Read more: 7 steps Retail Food Group’s digital chief is taking to transform marketing

In its financial statement, RFG blamed tough and ongoing retail market trading conditions, especially within increasingly competitive shopping centre locations, along with onerous lease conditions and a sharp decline in franchise sales and renewals off the back of internal management challenges. RFG managing director, Andre Nell, said it was time to take decisive action.

“We have had to make some tough decisions about our business model, our franchise network and the value of some of our assets,” he said in a statement last week. “The key to improving our performance is to simplify what we do. We have all the assets we need to deliver our diversified business strategy. Now we need to make sure we make the best use of those assets.”

A number of acquisitions made in recent years had added opportunity but also complexity to the mix, the company stated in its financial report. A key focus of the business-wide review is reducing duplication and inefficiency, better integrating support structures, and improving alignment of company resources with “core revenue drivers”.

“As the company progresses its business-wide review, consideration will be given to further structural improvement to better ensure RFG is applying resources more effectively,” Nell said. “This includes further review of our broader brand strategy and portfolio.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu

 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Data has the power to build or burn brands

A brand can be severely wounded by use or misuse of any of its assets and you could say data has the greatest power of all to inflict damage.

Lucy Acheson

Head of data strategy and customer experience, LIDA

Totto and your inorganic future

At Cannes Lions this year we’ve been treated to many artificial intelligence (AI) insights. It’s one of the major discourses of our time.

Richard Brett

CEO, opr

Personas of one and the rise of ‘always there’ marketing

I’ve got some bad news. The ‘always on’ marketing approach that many companies have only just fully implemented is already out of date.

Nigel Roberts

Founding partner and strategy lead, Yell

Promotion is difficult. You should be able to do it. Sometimes it turns out bad, and when you turn to professionals, it turns out well - ...

Jordan Samuil

Village Roadshow partners with Lion for pourage rights and promotional partnership

Read more

This is very good news for Australian SMEs as ActiveCampaign is an very powerful marketing automation / email marketing tool that costs a...

Lawrence

SMB marketing automation provider sets up Asia Pac HQ in Sydney

Read more

Thanks for the info! If you are looking for commercial real estate in Mumbai, visit us at Jagaha.com! We have over 20,000 verified proper...

Gizelle

Salesforce ups the Marketing Cloud ante with Datorama acquisition

Read more

Completely agree! For the best commercial properties in Mumbai, visit our website - Jagaha!

Gizelle

Salesforce ups the Marketing Cloud ante with Datorama acquisition

Read more

Carisoprodol is used for treatment of pain.so it has some amount of drug use it carefully . Get its complete usage and prescription from ...

jensons henry

CMO profile: The strategy behind Cash Converters brand and customer experience reboot

Read more

Latest Podcast

More podcasts

Sign in