The use of apps and websites for ordering food and drinks has become common during the pandemic. But the Information Commissioner's Office (ICO) says that customers do have a choice over whether to share information, and they should think carefully about handing over personal data when using mobile phones to place an order in pubs and restaurants.
According to Suzanne Gordon, Director of Data Protection at the ICO: "It's too easy to upload an app and straight away put your name, email address, payment details in, without actually understanding fully where that information may be shared and why it's being used. Ultimately this is your data, it's your personal information and you need to be confident when you're handing it over and the reasons why."
Why has app and web ordering become so common?
Online ordering is popular with many customers, because it saves them the crush at the bar, and also helps to reduce the risks related to coronavirus.
These type of apps handle millions of pounds worth of transactions every day. With the lifting of lockdown restrictions, restaurants and pubs can now return to normal bar service, but most of them are still keeping their online/app ordering systems in place as well.
This method of ordering is also very popular with the businesses themselves, because it speeds up the ordering process and provides a way to interact with customers from a marketing perspective.
So what is the problem?
The ICO say that sharing personal data is not obligatory. "Customers need to understand they do have a choice. We're now coming out of the pandemic and there's the ability to order on the app or in the more traditional way," said Ms Gordon. "It is very easy for people just to see the end product, and because they want that, they really don't question the amount of data that they are being asked for," she continued.
The UK's four biggest pub chains, representing a quarter of the market - Wetherspoons, Greene King, Mitchells and Butlers and Stonegate - all now have their own in-house apps. And the developers of apps for independent venues say they have seen huge growth during the pandemic.
They all say that they follow guidelines informing customers of their rights and how their data will be dealt with. But those terms and conditions are unlikely to be read by a lot of customers. Why? Because they are more interested in eating and drinking, than reading the small-print on a website!
This has meant that over the last year, many businesses have suddenly accumulated a vast amount of personal information about their customers that they didn't have before.
For example, they are likely to know a customer’s name and email address. But they might also know their gender, date of birth, home address, phone number, marital status, and other personal information.
But is the customer really aware that the company has gained and permanently stored all of this personal data? Probably not.
How does the business benefit?
Most apps work by charging the venue a transaction fee of about 2% to 3% per order. In return, the technology can help to streamline the ordering process, which is obviously good for everyone. But it can also offer the chance to learn a little about customers' spending habits and demographic profiles.
From a marketing point of view, this is extremely valuable data, which is worth much more than the cost of a meal or a few drinks. It tells the business what a customer likes to eat and drink, what time they’re likely to visit, who they were sitting with, how frequently they visit, how much they are likely to spend, whether they prefer cheap or premium items, plus many other details about consumer preferences.
This allows the business to email the customer with targeted offers, and in some cases to send marketing SMS texts, or make phone calls direct to the customer.
According to Luke Beavon, Financial Director at the app provider, GoodEats: "Hospitality is struggling, but the app gives them the ability to follow up with a customer and get them back through the door again."
What should a business do to stay legal?
Pubs and restaurants that use the new ordering technology should respect certain boundaries. They should ensure the customer is aware that the information they are giving might be stored and used in the future for marketing purposes.
According to Suzanne Gordon of the ICO: "If firms are asking for data, they need to understand why they are asking for it and they need to make sure it is relevant and necessary."
Darren Bugg, Editor of The Customer Service Blog added: “It’s essential that the customer is made aware that they do not need to give any of this personal information when placing an order. They also need to be given the right to opt out of receiving marketing materials. The company must also always respect the rules of GDPR (General Data Protection Regulations) and the Data Protection Act 2018.”
© 2021 Darren Bugg