Recently, there has been a lot of buzz around the #LogOut campaign. It has taken the internet by storm. Owing to this campaign, over 1,200 restaurants have logged off food platforms that offer discount programs at dine-in restaurants.
Why? Let us give you a detailed tour of it.
What is #LogOut Campaign All About? And Who Started It?
As you know, there are a lot of food platforms, like Zomato, Dineout, Nearbuy, and more, which offer great discounts on food. They even have many programs rolled out, such as Zomato Gold, Infinity Dining, etc.
Zomato launched Gold in November 2017, which allows subscribers to get 1+1 on food and 2+2 on drinks from partner restaurants. It isn’t surprising to know that Zomato Gold has over 1 million active subscribers and over 10,000 partner restaurants globally. When Gold became a success program, they launched Infinity Dining on July 2019. It allowed signed up to order anything from the entire menu with unlimited servings at a fixed cost.
Similarly, Nearby has discount coupons for various restaurants. Dineout lets you buy discount coupons for a fee as low as INR 5. Plus, their Gourmet Passport membership gives you a buy-one-get-one on buffets, food, and drinks at over 800 restaurants across the country.
The National Restaurant Association of India (NRAI) thinks that these offers are hurting their business, and thus decided to log out of EazyDinner, Zomato, Nearbuy, and other platforms on August 15.
NRAI took to Twitter to say, “NRAI has come together to detox consumers from discount addiction. The move is being undertaken to protest against aggregators who have distorted a vibrant marketplace by aggressive discounting and predatory pricing.
Restaurateurs, it’s time to #Logout.#CozWeDeserve”
However, from a consumer point of view, these programs seem great. After all, it gives them great deals on foods and drinks, and save a lot of money. Even these food apps claim that their programs have helped increase footfall in restaurants, which resulted in increased revenue.
But even after that NRAI has objected to the massive discounts offered to the customers. They think that these discounts are devaluing their products.
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Deep Discounting is Hurting Restaurant’s Business
Rahul Singh, the owner of Beer Café and the president of NRAI, says, “For generations, the restaurant sector has been serving patrons without the distraction of technology. With the evolution of time, the use of technology is imperative. Technology has to be seen as an enabler of privileges, not a privilege itself.”
He adds that these food platforms had started as discovery and community building platforms and unbiased reviews. These apps also provided contact details, directions, and reservations. But they have now moved to a deep discounting model.
“Discounting blindly is one of the worst things you can do, because you’re conditioning your customer into devaluing your product, and you’re literally throwing money away by putting it back on the table from the initial and future sales with that customer,” Singh says.
For Abhijit Saha, director of Avant Garde Hospitality, which runs restaurants such as Caperberry and Fava in Bengaluru, Dineout has worked in their favor, but not Zomato Gold.
According to Abhijit, Gourmet Passport is well-defined, well-controlled, and is mutually beneficial, but Zomato is ruining the very fabric of the business.
He says, “The existence of Zomato or any other marketing platform that helps customers is because restaurants exist. There will always be a section of restaurants who are in distress, or who would like to see a marketing formula that may work for them if presented in a certain manner at any point in time. They (Zomato) have to be careful when they introduce a marketing style and ensure that they don’t destroy the infrastructure on which they themselves are dependent.”
Besides, Riyaaz, past president of NRAI, says that restaurants run on a thin margin, as low as 10%. Giving customers discounts of 50% hurts their businesses badly.
“The kind of language on the ground is that they (Zomato) say if you don’t sign with us, you will lose business, your ratings will go down. They say that if we sign up, they will ensure you get a better rating and double your business, etc.,” Riyaaz says.
But at the same time, Zomato was taken by surprise by the NRAI move of #LogOut campaign.
On the other hand, Dineout, on its part, said that it doesn’t believe in deep discounting. It instead offers sustainable discounts that are viable for both consumers and restaurants. And both Abhijit and Riyaaz agree with the fact that Dineout’s offerings are made in consultation with restaurants.
#LogOut Campaign Discussion Between NRAI and Aggregators
After the #LogOut campaign was initiated, extensive meetings between NRAI and restaurant aggregators were held, and both sides had agreed to use technology as an enabler to make happen friction-less dining experience.
All aggregators promised to revise their features that will allow customers to detox from the addiction of deep-discounts that has crippled the industry.
However, soon after Zomato released its 10-point improvement plan on its Gold membership scheme, it decided to cut all ties by saying that it is logging out of the restaurants’ #logout campaign.
A Zomato spokesperson said, “All our products are always in a continuous state of evolution, and we are always listening to our users and our partners.”
“These changes address the collective concerns of our restaurant partners while keeping our users’ best interests in mind,” the spokesperson added.
In fact, Zomato founder Deepinder Goyal went on to take a dig at NRAI President Rahul Singh on Thursday. He said that he was offering discounts at his own The Beer Cafe chain of outlets, proving that he was not against such policies.
He tweeted, “Zomato is logging out of the logout campaign. We have said enough, and we are getting back to work. I am confident better business sense will prevail at the end.”
While the war is still prevailing between Zomato and NRAI, Dineout CEO and Co-founder Ankit Mehrotra has made his peace. He said, “We’re happy to have come to a positive consensus with the NRAI and support our restaurant partners.”
He added, “While Dineout has never been a platform encouraging deep discounting, we have always had a restaurant-first approach, and hence encourage restaurants to #LogIn with technology.”
In fact, Nearbuy.com said it too had a meaningful discussion with NRAI and restaurateurs.
What remains to see is how Zomato and NRAI come to terms with their policies.
What are your views on the campaign? Tell us what you think about the whole deep discounting situation. Let’s talk in the comment section below.
A Backpacker with keen interest in Digital marketing. Responsible and passionate for building a digital culture at SoftwareSuggest. Grabber to implement new competitive ideas to analyze and boost online presence. Could be found in mountains and solo traveler by birth.
