“We want to be the connector”

“LAX is a successful example. We went in there seeking to make the programme more turnkey. URW as the developer funded the upfront cost of the programme. The restaurants didn’t need to buy tablets and printers or have a capex involvement. And then we worked out a model where there is not a cost to the concessionaires on a transaction basis, either. It makes it a lot easier to get scale versus previously, when we might have worked with one or two of the concessionaires in an airport and had this very fragmented model that doesn’t work for anybody.”

With the capex involved, scale is needed to drive the wider business model but that has been aided by a move to a subscription fee model, as noted above.

“This has helped fund the day-to-day activity,” says Livney. “We have got this income from partners and those solutions are driving a commercial benefit on day one. We can prove the average ticket is up, we are driving more revenue, we are saving labour. So it’s a pretty easy decision for merchants.

“The longer term play is that this global marketplace grows, and we can start to charge fees to the guests and have that more transaction-oriented business. But it’s really the subscription side of the business that helps while that network builds. And that’s why we often bundle the products now as well. There are dozens of companies that have self-order kiosks. But if you use ours, you can easily layer off the marketplace solution at a much more economical rate. None of the kiosk vendors or order at table vendors also have the marketplace.”

Having hit the milestone of five million orders recently, Grab has its sights set on doubling that figure quickly, and on building its international network.

Livney says: “We must have a network to ensure enough airports and enough merchants use it so that airlines and other partners integrate and promote it. It’s about the network as opposed to the proprietary platform.

“So that network is the focus for 2021. Right now, about 40% of the network is outside the US. Obviously, the US is where we’re the strongest, but we have a presence in pretty much every airport in the UK, a significant amount of airports in the works across the Nordics. We have started launching in Australia over the last couple of months as well. There’s a very substantial airport in the Middle East at which we will be launching over the next couple of months and we’re in talks with quite a few APAC airports. We aim to plant a flag in the major airports by region and built out from there. So that is what you’ll see next year, for sure.”

In that expansion drive, if there are obstacles to expansion, they tend to be in lack of resource allocation at airport or retailer level.

The rise of ecommerce in airport dining and retail opens up the question of how physical spaces, engagement and transactions will change in the new world. For Grab, that balance will be found as the industry evolves.

Livney says: “Consumers and even hospitality companies have been worried that if you move too much into technology, it becomes a cost-cutting, labour-reductive exercise. Or in other words, how can I become cheaper but place more of the burden on my consumer? Self-checkout at the grocery store is an example. There has been resistance to this from consumers. But if it is positioned as being for the safety and hygiene of employees and of customers – removing touch, social distancing – then it changes the mindset.

“Most people understand it and we have seen the adoption of some pre-COVID products in a new way. Order at Table is one. 20-30% of people might have used that versus ordering through a server in a restaurant before the pandemic, but now it’s at 95% or even higher. It’s just how people transact now.”

Whether that move towards less human engagement will in turn affect the appetite of travellers to sit down and dine will be a question facing the industry in the future. It could even change the way spaces are planned and designed.

Livney says: “The difficulty is that there are no build-outs that are going to be changing over the next few years. If we had money to redesign whole terminal spaces, the industry would change quite fast. Today some of the restaurants that have closed are probably not coming back. You could redraw them and create new virtual concepts but that is capex that nobody has right now.

“I don't see big change unless we start looking at new build-outs. But here, every airport is different, certainly on the US side. There will be less advancement and rethinking how the space is used, just given the municipality model. If you’re going to RFP now it is very hard to turn around and introduce a whole new way of thinking when you had a sit-down Mexican restaurant in mind. But there will be some opportunities, potentially more at privately-run airports.”

Some airports already build in ecommerce elements to their RFPs, so digital thinking is becoming an established factor in commercial planning.

DFW, one of the most progressive airport companies in the US, requires bidders to commit to a full part in its digital programmes. As a retail developer, URW Airports asks its partners to take part in its digital initiatives to help future-proof its commercial activities. Livney says: “Airports will start to drive participation in their new models over time. It is happening but it takes time for some to sign up. Digital should be something that everyone plays their part in, just as airports insist their partners do with their green initiatives.”

Then there’s the personalisation of the sale, leveraging the improved data that comes from months and years of transactions through a network operated by Grab.

“We can improve the whole user experience with the network. We have probably 20 Coffee Bean and Tea Leaf outlets from ten different concessionaires now but the guest doesn’t care who the operator is. As a traveller ordering through the American Airlines app I want to be able to set my favourite purchases or I want you to know that a week ago, I ordered an Americano in Dallas but now that I’m in Atlanta, show me the Americano.

“The challenge here is a lot more complicated. Item number 1234 through Delaware North’s POS in LAX is not the same as another player’s Americano in Atlanta. We need to be able to move that to the top of your order list wherever you are. So how can we become more intelligent, upsell more and personalise more?”

One element in that is marketing, to ensure that partners and consumers recognise the brand. Here, Grab plans a major announcement in early 2021 on its plans to build brand awareness.

Ultimately it’s about creating the eco-system that allows airports and their partners to understand and better serve the traveller.

Livney says: “If you can connect all of your systems you can learn about behaviour, incentivise, add value and reward. That’s the long-term opportunity.”