Slerp & UK White Label Restaurant Food Delivery | In Practise

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Slerp & UK White Label Restaurant Food Delivery

Founder of Slerp and Co-Founder of Crosstown

Why is this interview interesting?

  • How Slerp works with customers
  • Differences in Slerp in the UK and Olo in US
  • Why Shopify and Magento are not suited to hospitality SaaS
  • Slerp customer base and AoV
  • How restaurants can own the customer relationship through white label delivery
  • Unit economics of white label delivery in London
  • Challenges for restaurants going direct to customer

Executive Bio

JP Then

Founder of Slerp and Co-Founder of Crosstown

JP is the founder of Slerp, a UK enterprise software solution for restaurants similar to Olo, and cofounder of Crosstown, a leading London-based specialty coffee and doughnut chain. In 2013, JP founded Crosstown and was one of the first customers of Deliveroo and Uber Eats in London. He then founded Slerp to enable restaurants to sell directly to their customers and own the customer data. Slerp has various well known brands such as Gaucho or Roka as customers as well as hotels such as the Savoy and Connaught.Read more

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Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

JP, can you start by providing some context to your story building Crosstown donuts?

The story starts about eight years ago, in 2013. I'd been in London at the time for about four years, and being initially born in the UK, I grew up in Australia and moved back. I found that the specialty coffee scene was in its infancy in London. When I moved over, it was really surprising that there weren't many places you could go to get a decent flat white. The story for Crosstown stemmed from creating this specialty coffee concept and how we could scale a business around that sort of theme. But it evolved to what we're most well-known for at Crosstown now, which is the sourdough donut. We invented the sourdough donut. It's got a little cross on it; it's quite well known in London.

We saw a gap in the market for a high-quality handmade product. It was all quite mass-produced and artificial, so we thought, why don't we do scratch baking, use the best ingredients, and develop innovative flavors that use ingredients from the seasons? Why not use, for example, rhubarb, when it's in season, or stone fruit, or whatever we could get our hands-on, and pair it with specialty coffee? The long story short is that we started as a market store, myself and my business partner Adam Wills. Over the last eight years, we've grown it quite considerably into, I guess you could say, an omnichannel brand that's got multiple locations throughout London and is now expanding outside of London. It's not just sourdough donuts anymore. It's cookies, ice cream, and of course, we've got the specialty coffee. There is a whole range of vegan products as well, such as vegan donuts, vegan cookies, and vegan ice cream. That's the story in a nutshell. We started with the idea of pairing coffee with donuts, and it's grown to become an omnichannel hospitality brand now.

What was the history of your relationship with Deliveroo, or delivery in general?

One of the USPs of Crosstown, aside from its product and its brand, has been the progressive mindset. It's always been quite an innovative brand. I didn't know at the time, to be honest, but when I look back at it now, we're always pushing the boundaries of technology and innovation. When we first started in the market stall, we were the first tent to accept Amex with no minimum spend, for example, and people were like, woah, this is crazy, you're a market stall. We were one of the first brands to adopt Deliveroo. When I first met Deliveroo, there were less than 10 people there. It is, in a true sense, a startup business, and of course, has grown significantly over those years. We were an early adopter of that technology.

To put it simply, if I had to think about why we did it, I fully believed that consumer habits would change and evolve and that people would start ordering online. Thinking back to 2014, if I had to crystal-ball gaze in five to 10 years, would people be ordering with their phones, would they be expecting delivery of products, of foods? I fully believed that would be the case. So we adopted Deliveroo, and we were also a launch partner with Uber Eats. When they launched in London, we were one of the first brands to use them. It was really interesting to see the early dynamic of acquiring customers, to see consumer habits change and evolve, and to see the beginnings of some purchasing patterns. People demanded Crosstown through those marketplaces.

What did you see in those early days, in terms of consumer habits?

It was relatively new and innovative in some sense, but I think it was mostly driven through heavy discounting through the marketplaces. So sign up to Deliveroo or Uber Eats and get £10 or £20 free credit and spend it on what you want. Free money can shape habits pretty quickly, and from my view, it started to evolve into, how do we build our product around hitting moments for these customers that they might not be able to get in-store? How do I engage with those customers more directly? That sort of leads us to Slerp. If I had to summarize as simply as possible, I felt that the hospitality sector was ripe for some kind of innovation and disruption, and it would form a part of people's habits to buy online.

What was the founding story of Slerp?

We go back again about six, seven years. As you know now, we were an early adopter of Deliveroo, an early adopter of Uber Eats. There were two big questions that were annoying me in a simple way. One was, how do we engage with our customer directly? We put our blood, sweat, and tears into creating the Crosstown brand, which was growing and had a cult-like following, and was getting a lot of traction. But we didn't know who our customers were that were buying through the marketplaces. So how do we engage with them directly? The second part was the customers were asking us, hey, I want to buy Crosstown for the weekend, or I've got someone's leaving party or a wedding or whatever it was. We couldn't facilitate those types of orders through an ecommerce solution like the marketplaces. So I went on this journey back in 2015 to look at how to do direct-to-consumer online ordering ourselves. How do we transact through Crosstown’s website and engage in that customer base?

I started by looking at what I call the traditional ecommerce providers, Shopify, Squarespace, Magenta, WooCommerce, the platforms dominating the non-food or retail aspects of ecommerce. What I quite quickly learned was that they would just not fit the purpose of hospitality. When you have a multisite location like Crosstown, you've got different opening times, and you've got different menus at each location. For example, if you want to do on-demand ordering, pre-orders, and nationwide delivery, those platforms just don't fit into what you need as a hospitality operator. I realized there was a gap in the market to have, essentially, a white-label ecomm solution dedicated to hospitality. I was thinking, if I'm a brand and I'm in a space where I'm growing, there are surely others thinking like this as well. That was the first learning, which I bucket up as ecommerce, which is what Slerp is probably most well-known for now.

The second learning stemmed from what I would call order management. It became increasingly complex to answer very simple questions at Crosstown, such as, how many donuts do we have to produce tonight? We are a bakery that operates 365 days a year and produces fresh goods every day. Answering that question became hard because of all the different shops and the markets; we were wholesaling to Selfridges and an airline at the time and Harrods, Whole Foods. We were doing catering; we were doing online. It was becoming very difficult just to aggregate that information. We were using Excel, and we had two staff members punching all these numbers in to get to what we would ultimately call a production schedule, which was the flavor of the donut and how many we had to produce. It would say we're going to produce 10,000 donuts tonight; this is the breakdown; these are where they've got to go, and here's the packing slip that the drivers have to pick up. It just didn't make sense.

I was wondering, is everyone doing this by Excel? How does this work? Are we doing it wrong? I’m throwing people at it; is this the right way? I started speaking to my peers, and I started speaking to other operators in the sector. I asked, how do you manage this stuff? It became clear that the number one tool was Excel. This was interesting. How about if we could create a cloud-based order management system that would allow you to input your store orders, automatically import your online orders, upload purchase orders from wholesale accounts, and produce production schedules, packing slips, and route sheets; these are relatively unsexy things, but very mechanical and very key for operations.

What I realized I was thinking of, essentially, a simplified ERP system. ERP systems are clunky, made for big businesses, not built for SMEs, and particularly not built for the hospitality sector. That's where the name comes from. Slerp stands for Simple Language ERP, which no one actually knows about or cares about. Still, it gives some people an insight into what I was thinking, an ecommerce link to all the management and getting these systems to talk together to ultimately fulfill two very simple goals for operators; to drive top-line revenue and drive bottom-line growth because you can target the revenue side and the cost savings and the operational fishing season, and not just have a huge head office throwing bodies at some of these manual tasks.

That was the thinking back in 2015. I then incorporated the company in 2016. I sat on the idea for a while and thought, this is pretty mad. I'm scaling this donut-led concept called Crosstown. Why am I thinking of a tech company? But the more I researched, the more I thought I was onto something quite big. Then we went on the journey of building out the MVP, the first version of Slerp in 2016. Then in January 2017, we turned it on and put it on Crosstown’s website, and 10 minutes later, we got our first order.

From 2017 to 2019, I quietly learned and immersed myself into how this could work for this sector, and I became obsessed with it. How could we build a solution that's not only relevant for Crosstown but broader hospitality businesses? We launched the product officially to market at the end of 2019. Slerp is very much a pre-pandemic business even though people might think it's not. We've got a history that goes back a number of years. Then we started to grow from the end of 2019, and as we know, the world changed and tipped upside-down in March. We were growing like this, and then we went like that. The Slerp name started to spread throughout the sector, particularly in London, about how we could enable these businesses to have a channel to sell to their customers because they lost their walk-in trade. We've been on a pretty crazy journey since then. We had a small team; we've still got a small team, but it's a little bigger now. We're focused on fulfilling that vision, which is to be that digital business partner for the hospitality sector to help them sell more and manage better.

Back to the point around Shopify and Magenta, why can’t they do this?

That's a good question. One of the fundamental differences is the checkout flow. The architecture of a traditional ecommerce solution, like Shopify, is you view your items. Let's say you’re looking for a jumper. You add your jumper to the basket, and on your last page of the checkout, you punch in your delivery details, your payment details and off you go. When you have a multi-premise operation and every site can have different stock and different opening times, that complexity of where that stuff comes from becomes very difficult. Shopify is generally built for warehouse solutions, which is one location, and you pick that jumper from that location and send it.

So what happens if you've got this jumper at one location and not the other, and you want to do an on-demand delivery. Suddenly, that complexity of the time and location and need of that product can't fit into a Shopify-like checkout solution because it's too late in the process for Shopify. You've got your delivery details and payment details on the last page; I needed to know that up front to realize, hey, that jumper is not in stock where you are. You can only have this order type, or you've got to get it from this location, hence the delivery period is X, Y, Z. I realized that from when we were scaling Crosstown; having that time and location-based settings is the key differentiator compared to many retail-led eCommerce solutions.

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Slerp & UK White Label Restaurant Food Delivery

May 16, 2021

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