NZ's only listed loyalty player Plexure doubles losses & will restructure. Cash burn "fairly large".

Plexure and McDonalds

Plexure, founded in 2010, grew out of VoucherMob. It's now listed on the NZX and ASX. It's landed McDonalds as an investor, client and most of their revenues in 2019. Earlier this year Plexure bought Australian family owned business Task (for $120 million) and Task's CEO Daniel Houden took over from Craig Herbison as CEO. Kathryn Byrne, formerly of Qantas Loyalty joined to lead strategy.

Plexure invested heavily to try and dilute McDonalds whcih hasn't happened.

"Fairly large" cash burn

Results released yesterday show that revenue is down 7% to $13.5 million. Net losses for the last 6 months have almost doubled to $8.5 million.

Staff were advised today of a consultation process for “rationalising our resource pool”.

Combined order,pay and loyalty solutions for restuarants

Research in the UK by Eagle Eye (who deliver loyalty for The Warehouse Group) shows that "Consumers are most likely to trust compassionate, transparent and engaged businesses after lockdown" and that "support for the local community, as well as their own staff and frontline workers emerged as the most important thing a business or brand must demonstrate in order to win customers back into pubs, bars, restaurants, cafés and stores".

The FT reports that for restaurants using a similar service (Sunday) in the UK:

• Within a month of adopting the service in September of this year, one resturant saw 70% of sales going through the app

• Tips increased from GBP 300 a month to GBP 3,000

Highly competitive

The market for loyalty platforms and services has more options today that ever before. Innovators like Eagle Eye are entering with Software As A Service (Saas) models, enterprise loyalty incumbents like Comarch are introducing Saas options at competitive price points and the Megavendors like Salesforce are introducing enterprise integrated loyalty offerings.

This competition is more intense in Plexure's category. Major players like MasterCard's SessionM is rumoured to be running McDonald's USA loyalty program. Leading innovators like Eagle Eye have tied up with Preoday.

It would appear to be a land grab as the services are inexpensive. Sunday's fees are between 0.5 and 1%. It's just raised $100m in funding.

Commonwealth Bank of Australia (ASB's parent) this year bought Doshii which is an app marketplace for a wide array of restaurant apps that compete with Task and Plexure. Doshi is free to the end of year.