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

Latest Videos

More Videos

It's an interesting direction, and fair play that they've backed what their service differentiator in the market is. It's a bit clunky bi...

Jeff

Versa launches bot-activated website

Read more

Algorithms that can make sense of unstructured data is the future. It's great to see experts in the field getting together to discuss AI.

Sumit Takim

In pictures: Harnessing AI for customer engagement - CMO roundtable Melbourne

Read more

Real digital transformation requires reshaping the way the business create value for customers. Achieving this requires that organization...

ravi H

10 lessons Telstra has learnt through its T22 transformation

Read more

thanks

Lillian Juliet

How Winedirect has lifted customer recency, frequency and value with a digital overhaul

Read more

Having an effective Point of Sale system implemented in your retail store can streamline the transactions and data management activities....

Sheetal Kamble

​Jurlique’s move to mobile POS set to enhance customer experience

Read more

Blog Posts

Brand storytelling lessons from Singapore’s iconic Fullerton hotel

In early 2020, I had the pleasure of staying at the newly opened Fullerton Hotel in Sydney. It was on this trip I first became aware of the Fullerton’s commitment to brand storytelling.

Gabrielle Dolan

Business storytelling leader

You’re doing it wrong: Emotion doesn’t mean emotional

If you’ve been around advertising long enough, you’ve probably seen (or written) a slide which says: “They won’t remember what you say, they’ll remember how you made them feel.” But it’s wrong. Our understanding of how emotion is used in advertising has been ill informed and poorly applied.

Zac Martin

Senior planner, Ogilvy Melbourne

Why does brand execution often kill creativity?

The launch of a new brand, or indeed a rebrand, is a transformation to be greeted with fanfare. So why is it that once the brand has launched, the brand execution phase can also be the moment at which you kill its creativity?

Rich Curtis

CEO, FutureBrand A/NZ

Sign in