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Shukri Sheikh
LON160919013

Implications of the COVID-19 Pandemic

COVID-19 has disturbed brick and mortar business operations. Firms are not sustaining any income in physical stores and are faced with ambiguity about the end of this pandemic (World Coffee Portal, 2020). Although businesses have been presented with furlough schemes by the UK government, the eligibility of the loans proved to be a major hurdle for many businesses and cannot undo the long-term implications of the pandemic (World Coffee Portal, 2020).

Prufrock is a small brick and mortar business that has been faced with the challenges of COVID-19, as 92% of coffee shops have temporarily closed to stick to the stay-at-home regulation (World Coffee Portal, 2020). This coffee shop has been operating for 10 years and offers a range of home cooked meals to deliver breakfast and lunch menus (Prufrock Coffee, 2021).

In the hospitality industry, the number of seated diners after the 3-month lockdown in 2020 was down by 45% (Statista, 2021). Following the rise of covid 19 infections, the country reintroduced another lockdown which now during 2021 further reduced the number of seated diners by a staggering 99.7% (Statista, 2021). Overall, the coffee shop market is set to decrease by 12% (Butler and Marsh, 2020).

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Shukri sheikh
LON160919013

Delivery Options

Brick and mortar stores need to rethink their business architecture to sustain their business operation. Lee Yohn, (2020) states that the pandemic is rewriting the rules of business. Due to the long-term social distancing taking place, there are significant changes in customer behaviour. For instance, 72% of Consumers are now focused on making less frequent trips to supermarkets during the pandemic but are rather utilising online grocery and non-grocery delivery options (World Coffee Portal, 2020). Therefore, the case for deliveries and at home coffee consumption is strong. The World Coffee Portal (2020) states that without an e-commerce or an online presence most companies are going to be left behind.

Subsequently, to overcome drawbacks brought by COVID-19, Prufrock café needs to move their business operation online as it represents a crucial revenue opportunity for them to pivot to. In doing so, the company would not be benefiting just temporally, as delivery presents a great future.  Statista (2021) states that prior to the pandemic, consumers were already beginning to utilise delivery options more often to order food and drinks.

Therefore, functionality is the most important aspect. Offering convenience in coffee shops is no longer an option, but rather essential (World Coffee Portal, 2020).

Prufrock should execute this by offering a seamless e-commerce experience through a, browsing, searching, selecting, purchasing as well as return options. It is important when a business has an e-commerce option that it is mobile responsive and presents an integrated service through a ‘buy online and pick up in store option’ and provides a consistent reliable digital experience throughout devices and channels to maximise customers (Lee Yohn, 2020).

However, if this business is unable to create an ideal e-commerce site, food delivery services such a Deliveroo or Uber eats could improve their business activity. These outsourced sites not only take care of delivery options but also enable businesses to leverage from their marketing, which in turn can increase their reach to customers which might have not known about their existence (The Guardian, 2020).

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Inara Bhanji - LON170830006

This section includes specific tasks and activities Prufrock Coffee employs in their organisation. These factors are fundamental to the operation of the business and significantly improves their value proposition (CFI, 2021). Some categories of the key activities Prufrock highly focus on include,

Promotion – Prufrock Coffee promotes their business by using different social media platforms such as, Instagram and Twitter because of how much people spend time on them. Also, promotion is done by sending emails. The location of the shop in London also promotes their business as there are many visitors (Emilialiveslife, 2013).

Platform – To increase sales and gain profit the company offer ways in which customers can receive ordered to their home by using their delivery services or even ordering and collecting in store (PrufrockCoffee, 2021). This makes it easily accessible for everyone, especially during the COVID-19 restrictions.

Payment – The company accepts different types of payment methods like, Android/Apple pay, cash and credit/debit cards to cater for all customers (Yelp, 2021).

Customer Relationship – Prufrock also make customer experience a priority by looking at ways to improve and problem solve. This is also proven by customer feedbacks and engagement through social media. Prufrock offer a loyalty-card system which is part of their USP (Leeuwen, 2010).

Training – Prufrock Training and Consulting is a training centre offered by the company, both online and physically. Providing a number of team-building workshops, bespoke classes and courses attributed by the Speciality Coffee Association. High level of training is ensured as they will be working with coaches who have over 15 years of experience within the industry (Prufrock, 2021).

Production – Prufrock are passionate about supporting their local producers and small-scale farmers therefore they source all their products from here and offer a range of home-made, seasonal food for breakfast and lunch (Prufrock, 2020).

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by Viktoriya Gineva
LON170905008

Customer Segment

1. Regular/ Local Customers - Prufrock  is an institution for many living in the city, coffee lovers who crave a quality cup of coffee. The urban look of the shop attracts customers to keep coming back not only for the great tasting coffee, but the unique atmosphere. Due to the pandemic now Prufrock is open for take aways and also available to purchase coffee beverages, food from breakfast and lunch menu, as well as other products such as coffee beans, t-shirts, and brewing equipment all available online for a delivery or a pick up option (Prufrock, 2021).

2. Tourists/ Visitors/ Coffee lovers - Prufrock is located in the centre of the city and its brand reputation attracts many visitors from outside  to come and taste the speciality coffees and enjoy the atmosphere created by the urban interior and the professional baristas show-casting.

3. Foodies  - Prufrock also offers a menu of range of breakfast and lunch dishes which are locally sourced and carefully selected and accompanied with varieties of speciality coffee beverages. Due to the pandemic now food and beverages menu is available online only.

4. Take away/ Delivery customers - Due to the pandemic Prufrock has introduced an online delivery or a pick up option.

5. Consumers interested in barista training - Prufrock Cafe also offers professional barista training in store or online.

6. Consumer Demographics - Prufrock cafe attracts mainly local professionals from a wide spectrum of age with medium to high income who would enjoy a high quality coffee and exclusive products (Prufrock, 2021).

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Inara Bhanji - LON170830006

The Unique Selling Point helps to differentiate from competitors and help the organisation stand out in order to gain consumers and increase reputation (Kumar, 2021).

Analysing key activates has helped to critically identify Prufrock Coffees USP. It is clearly shown that all these helps gain competitive advantage and also because they are continuously innovating (Moore, 2016). The organisation does many things differently that make them original such as, offering training and both in person and digitally that can be beneficial.

However, the USP is part of their customer relationship as they believe focusing on building friendship with customers is more important than customer loyalty. Therefore, the co-owner Gwilym Davies implements a strategy called “disloyalty card” which means people should visit other coffee shops and collect 8 stamps from them different locations and then return back to Prufrock for a free coffee (Leeuwen, 2010). This implies their self confidence that their coffee is better than others without having to persuade. The strategy received lots of attention and the revenue increased by 20% (Gay, 2014). This demonstrates that it is not always about the promotion but the quality of the coffee.

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Gergana Ivancheva
LON170830003

Direct sales channels are considered by Prufrock Coffee London for selling their coffee products to the end customer without having any middleman involved in the process. Both brick and mortar and online sales are enabled for customers, both the end customers or the other retail organisations under the Business-to-Business (B2B) model. The organisation’s website will be the primary mode for customers to purchase coffee products through digital mode. Though ordering is enabled through the digital mode, customers have a choice of choosing whether they want the product to be delivered or the pickup facility is available.

The organisation is also providing workshop through online mode as well as in-person training for Barista, which is also a major way of attracting customers through word-of-mouth referrals. These workshops and courses are accredited by the Speciality Coffee Association (SCA) and hence adds more weightage to the overall brand in terms of attracting customers. Social media marketing and email marketing is also considered as a source of reaching customers. Interested people can sign up for the mailing list option provided on the website (Prufrock Coffee, 2021).

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Gergana Ivancheva
LON170830003

The major cost comes from procuring coffee products from across the European farmers and holding a central inventory. Then the stored inventory needs to be distributed to the end customers, according to the order placed. Hence, the supply chain management cost becomes the major aspect. Apart from this, there are customer acquisition costs, which involves the sales and marketing efforts including the social media campaigns and email campaigns carried out. Since the website is the major source of sales through the online medium, the website hosting charges are important to be considered. Simultaneously, there is a brick-and-mortar store, where customers can buy the products directly, hence there are related operating costs such as rent of the store, facilities, etc. For both the online and the direct sales, specific payment methods have to be arranged and there are costs related to it. Of all, the most important costs that cover the end-to-end cycle of the operations are the people costs, where specific skillset and experience are required and there are costs associated with it.

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Inara Bhanji - LON170830006

Butler, S. and Marsh, S., 2020. From cool beans to has-beens? The Covid threat to Britain's coffee shops. [online] the Guardian. Available at: <https://www.theguardian.com/business/2020/sep/04/from-cool-beans-to-has-beens-the-covid-threat-to-britains-coffee-shops> [Accessed 16 March 2021].

CFI (2021). Business Model Canvas Template - A Guide to Business Planning. [online] Corporate Finance Institute. Available at: https://corporatefinanceinstitute.com/resources/knowledge/strategy/business-model-canvas-template/ [Accessed 21 Mar. 2021].

Emilialiveslife (2013). Prufrock Coffee: London’s Essential Coffee Experience. [online] Emilia Lives Life. Available at: https://emilialiveslife.wordpress.com/2013/02/11/prufrock-coffee/ [Accessed 21 Mar. 2021].

Gay, C. (2014). Four Marketing Strategies That Paid Off for Small Companies. Wall Street Journal. [online] 3 Nov. Available at: https://www.wsj.com/articles/four-marketing-strategies-that-paid-off-for-small-companies-1414965293 [Accessed 21 Mar. 2021].

Kumar, B. (2021). What a Unique Selling Proposition Is (And Isn’t) Plus 10 Examples to Inspire You. [online] Shopify. Available at: https://www.shopify.co.uk/blog/unique-selling-proposition [Accessed 21 Mar. 2021].

Leeuwen, D. van (2010). Forget creating customer loyalty and focus on building friendships with customers. [online] Tomorrow Trends. Available at: https://www.tomorrowtodayglobal.com/2010/03/18/forget-creating-customer-loyalty-and-focus-on-building-friendships-with-customers/ [Accessed 21 Mar. 2021].

Lee Yohn, D., 2020. The Pandemic Is Rewriting the Rules of Retail. [online] Harvard Business Review. Available at: <https://hbr.org/2020/07/the-pandemic-is-rewriting-the-rules-of-retail> [Accessed 15 March 2021].

Moore, R. (2016). Prufrock Coffee. [online] Square Mile Coffee. Available at: https://squaremileblog.com/2016/05/27/prufrock-coffee/ [Accessed 21 Mar. 2021].

Prufrock Coffee. 2021. About — Prufrock Coffee. [online] Available at: <https://prufrockcoffee.com/about> [Accessed 16 March 2021].

Prufrock (2021). Training. [online] Prufrock Coffee. Available at: https://prufrockcoffee.com/training [Accessed 21 Mar. 2021].

PrufrockCoffee (2021). Terms of Service 1. [online] Prufrock Coffee. Available at: https://prufrockcoffee.com/terms [Accessed 21 Mar. 2021].

Statista. 2021. COVID-19: daily restaurant dining decline UK 2021 | Statista. [online] Available at: <https://www.statista.com/statistics/1104991/coronavirus-restaurant-visitation-impact-united-kingdom-uk/> [Accessed 16 March 2021].

Statista. 2021. COVID-19: food delivery frequency in Great Britain | Statista. [online] Available at: <https://www.statista.com/statistics/1107212/covid-19-food-delivery-frequency-in-great-britain/> [Accessed 18 March 2021].

SquareMile, 2016. Prufrock Coffee. [online] Square Mile Coffee. Available at: <https://squaremileblog.com/2016/05/27/prufrock-coffee/> [Accessed 20 March 2021].

The Guardian. 2020. Restaurant owners may not like delivery services – but can they do without them? | Gene Marks. [online] Available at: <https://www.theguardian.com/business/2020/dec/02/restaurant-owners-delivery-services-grubhub-doordash-fees-pandemic>   [Accessed 19 March 2021].

World Coffee Portal. 2020. Finding the way forward: Covid-19 and the UK coffee industry. [online] Available at: <https://www.worldcoffeeportal.com/Latest/InsightAnalysis/2020/July/Finding-the-way-forward-Covid-19-and-the-UK-coffee> [Accessed 16 March 2021].

World Coffee Portal. 2020. UK coffee shops: The Coronavirus Impact Study. [online] Available at: <https://www.worldcoffeeportal.com/Latest/InsightAnalysis/2020/UK-coffee-shops-The-Coronavirus-Impact-Study> [Accessed 16 March 2021].

Yelp (2021). Prufrock Coffee - Farringdon - London, United Kingdom. [online] Yelp. Available at: https://www.yelp.com/biz/prufrock-coffee-london-2 [Accessed 21 Mar. 2021].

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Gergana Ivancheva
LON17083000

The revenue model for the company is mainly based on direct sales of coffee products, irrespective of whether it is from an online platform or directly from the store. Value-based pricing is chosen for coffee products where different product variants and different quantities, the prices differ, which can give a sense of affordability to the end customers. Another parallel source of revenue has been created by the organisation through two major sources: one, by selling breakfast and lunch to customers visiting the store, by procuring the dairy products and fish/meat products from the local farmers. The other one is by enrolling people for the training and consulting services for becoming a Barista. Several modes of training and consultancy are included to ensure more people are enrolled in the program. The lifetime value of customers will be improved by providing more offers and motivating them to spend more, either coffee products, breakfast/lunch or the services provided. Any pricing strategy of the organisation will involve ensuring that the gross margin of the organisation is always maintained above 10-15%.

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by Viktoriya Gineva
LON170905008

Local Sourcing

Globalization has brought to the table longer and complex food supply chains which has been linked to increase in demand of locally-sourced food (Torres, 2016).

Local sourcing has become a formula for standing out from the competitors (Manson, 2011). Nearly every company in the hospitality industry prefers to support the local business, for the benefits of the local economy and the environment. This on the other hand attracts the “green consumers” who choose to spend money on  green products and services that gives them the “feel good”  factor. Local sourcing and engaging in community initiatives also sets the business in the blue ocean  space by creating sustainable business.
Prufrock cafe is supporting local food producers and coffee growers. The company  serves coffee from Square Mile and includes roasters from Europe like Five Elephant, Coffee Collective, Koppi  and more (Prufrock, 2021).

When it comes to its kitchen Prufrock offers seasonal, home-cooked menu. The company works with well known, reputable UK producers like Neal’s Yard for dairy products, ben’s Fish and meats from Swaledale Foods (Prufrock, 2021).

Thus, by using local respectable businesses for sourcing its products, Prufrock is supporting the local economy, employment and also creates strong business relationships which in return gives the company a competitive advantage, makes it stand out from the crowd and generates more profit.

Professional baristas, coffee specialties and outstanding service

Prufrock Cafe shines with its uniqueness from the moment you enter the shop with its interior design, high quality coffees, high end equipment and professional baristas showcasing different brewing techniques.

Specialty coffee beans from roasters all over the world are also available for coffee lovers, as well as brewing equipment to purchase and take at home. Therefore, Prufrock is constantly experimenting and challenging the boundaries to improve and create a unique customer experience (SquareMile, 2016).