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

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in