Groupon Reserve Automatically Applies Discounts to Reservations
Filling tables in off hours just got easier for upscale restaurants thanks to Groupon Reserve—a strategic alliance that marries a proven reservations engine from Savored.com with some 41 million subscribers on Groupon to provide a vehicle for seamlessly combining reservations and promotional discounts.
On July 1, Groupon debuted its Reserve platform that allows diners to book tables at some 600 restaurants in 10 major cities at discounted rates of up to 40 percent. The restaurant defines the specific time for promotional reservations and the amount of the discount to be offered, but Groupon Reserve provides extensive data to help make those decisions.
“We have compiled three and a half years of data that shows the best days, times, and discounts based on a restaurant’s neighborhood,” explains Ben McKean, founder of Savored and general manager of Groupon Reserve. “It’s an incredibly simple process for the restaurant—we discuss the traffic patterns with them, they identify the promotion they want to offer, and when a diner makes a reservation the Groupon Reserve discount information is automatically passed along to the restaurant. There’s no need for coupons or vouchers or anything to be printed out.”
That level of discretion is particularly important in an upscale-dining environment, where whipping out a 20 percent off coupon might seem inappropriate and the restaurant would not want its other diners to know that some people were eating at a deep discount.
Restaurants can also alter their discounts to match dynamic demand patterns, and they can make changes to promotional offers in real time. “Diners can make reservations up to 30 minutes before the time they are reserving,” says McKean, “and restaurants can adjust the offer as needed. For instance, if it’s a rainy night and they have less business than normal, they can decide to allow more reservations at the discounted price. And often restaurants will offer a 40 percent discount on their slowest night, but only a 20 percent discount on a Thursday or Friday night.”
Although any full-service restaurant could benefit from the promotions-driven business platform, McKean says it has proved most valuable for restaurants that have a significant number of days and times consistently operating at full capacity, then the Reserve service is used simply to fill the occasional empty table.
Even at popular and exclusive eateries in New York City where demand is high during peak dining hours, there are windows of time when more tables could be filled. Peter Esmond, director of operations, at the upscale Rouge Tomate, says that seasonality and time of year dictate reservations, but regardless of the month the restaurant always has available tables in the early and late hours.
About 18 months ago, the restaurant began working with Savored to book tables between 5:30 and 6:00 P.M., and later between 10:00 and 10:30 P.M. Initially Rouge Tomate offered discounts of 30 percent off the total check, but has since lowered the discount to 25 percent and Esmond says that discount works equally well. Only a select number of reservations are available at the discount, but on any given night the restaurant attributes at least four to 10 reservations to the program.
“The reservation service allows us to fill inventory at all times by providing an incentive for diners to come in,” he explains. “And, it brought new clients into the restaurant as well.”
The restaurant typically seats 150 to 200 tables a night, and the vast majority—around 70 percent—are reservations. Only around 30 percent are walk-in traffic.
Rouge Tomate plans to maintain the same 25 percent discount now that the reservations platform is offered through Groupon, and Esmond is optimistic that reservations in off hours may go up even more now that the exposure is to Groupon’s engaged subscriber list.
Operationally, McKean suggests restaurants should view Reserve as “just another reservations channel—the same as taking reservations over the phone or on the restaurant website. The discount is automatically communicated with the reservation to the restaurant, and they can use the reservations ledger service provided by Groupon Reserve, copy the information into another program, or even record it on a handwritten ledger—which some restaurants still prefer.”
Groupon Reserve has gone live in Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, New York, Philadelphia, San Francisco, and Washington—and has plans to expand to other key markets in the U.S. and internationally by the end of this year.
By Connie Gentry