For the majority of UAE residents, dining out means arming themselves with a two-for-one voucher or discount app to cut the cost of the meal.
Having dined at their favourite restaurant once or twice, however, they either use up their vouchers or the deal has expired.
Which is why entrepreneur Omer Gurel and his co-founder Edebali Sener came up with the idea for Repeat, a UAE-based loyalty aggregator that offers customers personalised pricing based on their spend or frequency of visits.
“We're going to be the first technology company in the world that's focused on purely personalised pricing,” says Mr Gurel, 32, chief executive of Repeat, which went live on December 24, 2018.
“We envision a future where our algorithms and our APIs (Application Programming Interface) will power every transaction and the way it's priced. So, from the lemon you buy in the supermarket to the bank transfer you make, they should all be powered by our own engines that will personalise the pricing for you based on your behaviour.”
Mr Gurel may have big global ambitions but for now the company is focused on the UAE’s food & beverage industry, where it rewards customers that visit establishments regularly over those wielding a buy-one-get-one-free coupon.
The serial entrepreneur, who set up his first venture – a mobile phone trading entity – at 19 in Dubai rather than go to London School of Economics in the UK, says Repeat is very different to existing deal options such as the voucher app The Entertainer or delivery concept Zomato Gold.
“Those are very much a deal, one-size-fits-all solution, whereas with Repeat the price you pay is ultimately decided by your past behaviour: how soon you came back, how much you spend, how much of a good customer you are,” says Mr Gurel, who calls himself an anglophile Turk and has set up seven businesses so far.
Discount vouchers are on the rise globally with the value of redemptions set to surge to $91 billion by 2022, up from $47bn in 2017, according to Juniper Research. In the UAE, a market saturated with F&B options, two for one vouchers have become the norm in recent years with multiple daily deal websites cropping up and the growth of the sector's market leader The Entertainer. In May 2018, Bahrain's GFH Financial Group acquired 85 per cent of the UAE-based retail app.
Mr Gurel says his concept not only benefits customers, who secure a better price, but also restaurants who are looking for higher profit and revenue.
“By giving the better price to the customer that deserves it, you bring equilibrium to the market. You have happy customers and happy merchants at the same time,” says Mr Gurel. "The average bill with Repeat is 25 per cent higher and we know through the surveys we have conducted that when the best prices go to the best customers, they actually spend more."
Another difference from conventional deal apps is that Repeat is free to end users and there are no limitations on how much a customer can consume or the number of people linked to the bill, with rewards based on the whole bill.
“There are many deals applications, but we are only loyalty aggregator for the merchants," says Mr Gurel. "Right now we're focused on the F&B industry, but soon it will be applied to other industries such as activities and leisure and more fine dining establishments."
The company funded the start-up from a $2 million seed round already raised from private investors by the entrepreneurs’ parent company 1001, which creates mobile e-commerce apps for supermarkets.
Repeat then raised a further $2.5m in Series A funding from private investors in July. A Series B round is planned for May this year of between $5-$10m, which will fund the company’s expansion to the US and UK by the end of 2020.
“We are going there first and we will also expand in the GCC but that is not our primary focus,” says Mr Gurel. “Dubai is a great market to test your ideas, to build proof of concept, but the region is very, very tiny when you are in the consumer tech business.”
To monetise the concept, merchants pay a monthly subscription fee of $99 for 12 months or $119 for six months.
This, says Mr Gurel, helps restaurants secure new customers that they can then incentivise to come back faster sooner than they naturally would. In turn, restaurants can gather business intelligence on the performance of their establishment.
"You might have a business that's doing Dh50,000 in revenue a day but it might have a terrible repeat ratio,” says Mr Gurel. "It might consist of mostly tourists and first-timers.”
The company has 400 merchants signed up to date and 75,000 customers have used the app in the UAE, predominantly in Dubai.
To use the Repeat app, users must download it from The App Store and validate their phone number. The app then flags up the nearest Repeat location and users clicking on the restaurant they want to visit can view the reward structure set by the merchant.
There are different offers for customers already in the establishment, who may have been introduced to the concept by waiting staff, to those outside the location, with the rewards dependent on how the merchants want to acquire customers.
“It entirely depends on the merchant and what they want to do,” says Mr Gurel. “You might get a better offer to entice you to try that place but there are a lot of merchants that think ‘I value my own loyal customers a lot more’.”
Once a customer has started using the app, Mr Gurel says the more extraordinary their behaviour, the better the reward.
“If you come back within three days to the same restaurant, the offer the merchant will give you will be better than coming back after a month, “ Mr Gurel says. “It’s built to encourage you to do something you wouldn't naturally do.”
So who gets the best deals?
“That depends on where you go,” says Mr Gurel. “If it's a coffee shop, a visit every day might not be considered extraordinary behaviour, but for a fine-dining restaurant, somebody visiting even once a month, that's extraordinary behaviour. So extraordinary behaviour is very much defined by the merchant based on their existing user behaviour.”
Q&A: Omer Gurel, co-founder of Repeat
At 32, you have set up seven businesses. What was your first venture?
At 19, I rejected a place at London School of Economics to set up a mobile phone accessories business in Dubai. I was inspired by reading Richard Branson's biography Losing my Virginity. I thought I would have a better chance in life as an entrepreneur against people who were better than me academically. I wasn't a bad student, it was just the choice that I made.
What have you learnt from being a serial entrepreneur?
Three things with the most important execution. Everybody needs to be organised and that starts with having a to-do list. I really value ideas, but a lot of people have ideas but if they can't execute them, they're just a waste of time.
What are the other two things?
You have to be very good at doing feasibility studies. That's something I've learnt through my failures, because ultimately you can bring every single one of my failures in the past down to a lack of a good feasibility study. The third part is to never run out of cash. So, whatever you do, even if you're a brilliant executor and you've got a brilliant idea, if you run out of cash, it's game over. So you've got to make sure that you're always going to be funded and as a result be conservative from a fiscal standpoint.
What has been your most successful business?
Repeat. Before Repeat it was a tyre recycling business I had set up with a partner in Ras al Khaimah where we converted waste tyres into crude oil, charcoal and steel wire. I sold my shares to my partner in 2012 when I exited.
What's been your biggest failure?
Setting up a bio-degradable and organic cigarette brand in the UAE in 2014. I didn't do a proper feasibility study, so I have no one else to blame for that.
What's been your biggest challenge with Repeat?
Sales. Setting up from scratch a Terminator, killer sales organisation that's razor focused has been a challenge. We haven't done badly but it could have been a lot better. While we've been quite successful at setting up the right processes and structures, the acquisition of high-impact talent has been challenging because high-impact talent in this country, especially in the sales field, is extremely expensive.
As a start-up, you're out-priced compared to the very large corporates, whom a lot of these really great people are working for. So what we have been hiring more junior to midlevel people and coaching them and making sure they have an out-sized impact.