Marketing Week (MW): As an online ordering website for thousands of takeaway restaurants, what kind of data does Just Eat need to collect to understand its business?
Paul Cook (PC): We need to understand where every single takeaway restaurant that has the ability either to deliver or offer collection is, in order to size our business and make sure we expand at the right pace in the right areas. If that data doesn’t exist, we have to create it. As much as we are using external data and our own transactional data, we have to create insight about our marketplace.
MW: How do you work out the size of Just Eat’s potential market?
PC: It is hard to put the correct value on our sector because most research companies don’t have a full understanding of how many restaurants are out there. It is a very fluid sector. There are changes in ownership, changes in the type of cuisine that is served. And they are all independent businesses.
We have a sales team of about 30 people who are on the ground every day in fixed territories signing up restaurants. When we started, we sent people on the road and they signed up any restaurant they could find that did delivery. We grew quickly. We focused on key areas like Leeds, Nottingham, London and Manchester. As soon as we got a critical mass of restaurants, that drove the other restaurants in the area to want to become part of us.
Our aim in creating a central database of locations is to ensure that every medium-sized town has enough restaurants to offer a good range of cuisines. If there are 10 restaurants, we want at least one of each of the cuisine types. We have been signing up in the region of 250 to 350 new restaurants every month for the past couple of years. That will increase dramatically this year. We have expectations of 50% growth in restaurants within 12 months.
The UK is our cash cow. It is the basis on which most of our growth is leveraged across the globe
MW: Where does the business operate, and how fast is it expanding around the world?
PC: We cover 13 international markets. We have been through a huge acquisition plan in the past few months and added six countries in 2011. In most of those, we have acquired a potential competitor or the biggest player in the market, in order to give us a footprint.
We just started up in Canada and that is a big potential market for us. In Brazil, we purchased a company called RestauranteWeb and that allowed us a basis on which to build the rest of the business.
In January, we bought a share in Alloresto, which is a Parisian company doing the same thing. It was one of the first players in this market. Longer term, there will probably be a single brand across the globe, but initially we are involved in just growing their businesses.
MW: How do each of the markets differ in their adoption of takeaway food?
PC: All 13 markets are in different stages of maturity. The UK is the second-most mature behind Denmark, but it is definitely the biggest. The country is relatively small but with 60 million people in it, which means that you can create pretty good coverage.
We run a delivery service in some of the markets we operate in as well, such as Denmark. We go to restaurants that choose not to or can’t deliver, collect food and deliver it on their behalf. That would change the dynamics of the industry in the UK. There are no plans to do that here at the moment, but it works in other markets, so never say never.
One of the challenges we face is that there are many countries, like Canada, where takeaways are not feasible. Outside of Paris, for example, the use of takeaway food – particularly Chinese and Indian – is far less readily adopted in France. In Denmark, 30-40% of people have takeaways regularly. In the UK, it’s 60-70%.
MW: How does the relationship between Just Eat and its restaurant network function?
PC: The model is that they pay us a running fee that gets them set up. We capture their full menu and put it online for them. We deliver a terminal that pumps out the order through the mobile network, then we take a commission off each transaction. The aim is to get each new restaurant up to a level of weekly or daily orders to make it cost-effective for both them and us.
There is real-time feedback to the consumer about how long it might take, and whether the order has been fully accepted or if the restaurant can’t deliver. Most takeaways have matured in terms of their order flow within 50 to 60 days of joining.
MW: How do you approach the huge task of keeping restaurant menus and details current and accurate?
PC: Changes to menus happen through our customer call centre, who administer changes live on the system. We don’t need to go through a process of changing menus online because the restaurants come to us proactively. If things have increased in price, there is an incentive to make sure that price is correct online, because otherwise the cost of the order is lower than it should be.
MW: How important is it to ensure the technology used across different businesses is the same, so the data from the global business can be merged together?
PC: A lot of the technology is ours, so it is relatively easy to scale it up. We do not immediately try to absorb most of the businesses we acquire into our standard technology, because it doesn’t necessarily make sense for the restaurant.
As a start-up, it is about growth and return for our investors. Just to make life easy for our business is not necessarily going to make the business the most money. Longer term, the plan would be to have everyone on the same platform. That decision will only be made when the system that is currently in place is no longer fit for purpose.
Smartphones in the hands of older and less affluent consumers will make ordering food through Just Eat more convenient for them
MW: What role does mobile ordering play in Just Eat’s business?
PC: For us, and a lot of brands with older demographics and C1C2D income profiles, mobile over the next 12 months will have a huge lift in pulling people online. There will be blue-collar and older consumers who are using takeaway regularly but not spending their life on laptops or watching television at night with an iPhone and an iPad. They are traditional consumers using traditional channels.
Smartphones in the hands of older and less affluent consumers will make ordering food through Just Eat more convenient for them. The growth of mobile traffic for us is exponential, including in those types of demographics.
MW: What is the next step for you and Just Eat in the UK market?
PC: Because we are a business that is online but constrained by local issues, probably the next phase of our growth is as much about increasing our penetration into new towns as about increasing our offering in existing areas. My aim will be – where we have lots of restaurants already – improving the cuisine offer. In Leeds, for example, we have almost 70% penetration of the takeaway market, but the 30% that is left is skewed towards the more up-market cuisines, like sushi, Thai, Indian and Cantonese. We need to fill those gaps.
MW: And where does the UK fit in the context of Just Eat’s global growth?
PC: The UK is our cash cow. It is the basis on which most of our growth is leveraged across the globe. In March, we had $48m [£30m] invested in the business. We hope that continues in the future and we will get more partners willing to invest privately.
I imagine we will now focus on growing the new markets. Obviously, the plan will be to continue to expand into new markets, but we have some big countries now – particularly with the additions of Brazil and Canada – and those are markets where we really need to create penetration.
Paul Cook on… learning from retailers
MW: What did you learn from being one of the earliest members of Marks & Spencers’ first insight team?
PC: At the time, M&S didn’t have an awful lot of capability around insight and data analysis. It was a little bit arrogant, thinking: “Most people shop at M&S, so we don’t need to worry about a customer profile because that profile is everybody.” It was reticent about finding out who it was losing and that was the start of how it lost its way.
The customer insight unit managed to get on top of that very quickly. I was the sixth or seventh person to join the team but within a year, about 50 people had turned up. In a couple of years we were doing everything – customer segmentation, store segmentation – bringing together every single piece of data across the business.
MW: How does past experience working on analysis of retail data inform what you do at Just Eat?
PC: Generally, it is the same sort of approach – characteristics about media preferences, brand preferences, where they holiday, where they shop, what properties they own. One of the things Just Eat will be looking to do is enriching what we know about our customers in terms of food with more of this lifestyle information.
“Having and looking for ‘hybrids’ to work at Just East is very important to us. A hybrid is someone who has a very wide spectrum of capability. They will be specialists in one or two areas, but they can turn their hands to anything from data cleansing and enrichment to high-end modelling, prediction and econometrics. You are highly unlikely to find someone who can do all of that very well.”
Data 3: Paul Cook gives three tips for building a data-driven online business
1 Mobile isn’t always the answerA lot of young marketers and agencies tend to see the majority of the UK as being reflected by London, so think an iPhone app is always the answer to something. The truth is that there are whole swathes of the country where people are not using laptops regularly, they are not ordering online and they are still a little bit distrusting of security online.
2 You need in-house insightWhen I joined Marks & Spencer, most of its customer insight resided in its agencies, whom it tended to leave to create most of the intelligence behind the media planning and advertising strategy. Internally, it was thin on customer insight because most of it was external to the business.
3 Think like a retailerBecause of the relationship between the Just Eat portal and our network of takeaway restaurants, we have to understand retail better. We have to understand people, neighbourhoods, businesses and travel times. They are the sorts of things that retailers like Tesco and Marks & Spencer have understood for years. As they moved online, they took that knowledge of different types of people in different areas and used it to shape their online businesses.