Waiting for the bill is a thing of the past
If you’ve been out to eat at a restaurant since lockdowns were lifted, you’ve likely had an underwhelming experience. Hospitality workers have left the industry in droves during the pandemic and the “Great Resignation,” with some 892,000 food service and hospitality workers leaving their jobs in August alone this year, according to the US Bureau of Labor. Restaurants and bars have struggled to hire enough staff to replace them and return to pre-COVID sales levels and service standards.
And it shows—in the form of reduced seating capacity, long waits to order, reorder, tip and pay. In many cases (including my favorite local go-to) restaurants are throwing in the towel and closing for good.
Just in time to address the labor shortage and restaurants’ precarious economic situation, hospitality engagement platform UNION has just closed a $22 million Series B funding round, led by Clerisy, the consumer-focused growth equity fund launched earlier this year by former L Catterton partner Lisa Myers and Gilt Groupe and Glamsquad founder Alexandra Wilkis Wilson. Other participants in the round included Roth Capital, Aquila Capital Partners and previous investors NEA, Wellington, Fiserv
UNION’s platform stands out from other hospitality and payments solutions by combining a POS system, contactless mobile ordering and payments, and customer data that helps operators automate loyalty. CEO Alex Broeker says the company is on a mission to save the restaurant industry by letting busy restaurants and bars leverage consumers’ smartphones as the center of engagement so they can do the same amount of sales as they could pre-pandemic with 75% less staff, while “treating every guest who walks in the door like a VIP.”
Bringing Hospitality Back to the Experience, with Some Digital Help
The nice thing is that guests don’t have to download yet another app to use UNION. First-time users click on a QR code with their phone—something we’ve all grown accustomed to over the past couple of years—to access a native app–like experience that lets them quickly start ordering, no matter how busy the venue is. Broeker says that in most restaurants and bars, it takes an average of 8 minutes for a table’s first drink order to arrive, but that UNION, with its integrated POS and mobile ordering system, cuts that down to just 42 seconds. The platform lets guests order and pay whenever they want, while capturing information like their favorite spirit brands, favorite entrees and preferred payment type.
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Once a guest has used UNION for the first time, the platform essentially takes on the function of the Big Brown Book that restaurateurs used to keep behind the bar to log regulars’ personal preferences and information so every staff member could treat them like a VIP. The platform personally welcomes the guest each time they visit a UNION-powered bar or restaurant and lets them open their check with a single click on their phone, so they can order immediately.
The platform is designed to make each guest feel special by suggesting specific items based on their order history (e.g., “Welcome back, Marie. Would you like to order a Tito’s and cranberry again?”). Venues and their brand partners can also recommend items as part of promotions and awareness campaigns or to reward loyalty, offering, for example, a complimentary cocktail made with a newly launched brand of whiskey or a complimentary appetizer that’s new to the menu. The welcome and recommendation experience is conversational and contextual, augmenting the human touch that Broeker notes is still a crucial part of the hospitality experience. The company never sells customer data and doesn’t share merchants’ details with other merchants on the platform.
Given the high employee turnover at restaurants and bars, in addition to staffing shortages, the platform ensures that every server, after just five minutes of training on their first day on the job, can recognize UNION customers and provide an elevated, personalized experience.
The result is higher sales for both venues and servers and a much better experience for customers. Broeker says establishments using the UNION system have seen average sales increases of 37%, as the platform lets customers order, reorder and pay faster, which means tables turn faster. The company claims that the platform reduces guests’ wait time by 80% and triples servers’ coverage areas, allowing busy venues to open all their seating sections instead of having to leave some empty due to staffing constraints. Venues that use UNION to present guests with a special offer like a free sample or discount have seen those checks rise, on average, by 42%, says Broeker.
Use Cases in Any Industry Where Curating a Great Customer Experience Is Important
UNION is the only platform offering a combination of mobile ordering, payments and loyalty capabilities. The cloud-based software system was specifically designed by food and beverage veterans to serve the needs of high-end, high-volume bars and restaurants and to perform fast and reliably whether a venue has 100 or 1,000 checks open. Based in Austin, the company processes more than $1 billion in consumer transactions each year. Hospitality venues pay a subscription fee to UNION and, unlike with many CRM systems, they pay no additional fee for successful upsell or cross-sell offers.
Rather than focusing on the huge national restaurant chains, UNION is targeting the 20% or so of hospitality groups that own the highest-volume, most popular venues in major metro markets. The company just hit 1,000 venues across 35 states and plans to expand internationally into bars and restaurants in Europe next year before taking on the hotel industry.
Broeker says the platform “offers the convenience, timing and ease that consumers want,” while driving the efficiencies that short-staffed proprietors need. Given consumers’ pent-up demand for hospitality experiences after so many months of lockdowns, and restaurateurs’ demand for solutions that help bring service levels back up to where they were pre-pandemic, the company has closed its latest funding round at the right time.
