By Ellen Hartman
It all started in 1958 in Omaha, Neb. — with the first gas station to offer self-service at the gas pump. Today, the self-service trend has fundamentally changed behavior in nearly every aspect of our lives. We go to the ATM instead of a bank teller. William Shatner buys our airline tickets via priceline.com. We print our own movie tickets for the next blockbuster hit, find our own book titles, never have to ask for directions.
Self-service at restaurants, however, seems counterintuitive. We don’t want to cook – that’s why we’re at the restaurant. However, the demand for self-service ordering is growing as customers adopt the technology that allows the service to work. Smart restaurateurs are meeting the demand. Approximately 25 percent of restaurants that offer delivery and takeout are using some form of self-service ordering, according to a recent study by Cornell University’s School of Hotel Administration, “The Current State of Online Food Ordering in the U.S. Restaurant Industry.”
What is Self-service Ordering?
Also called online ordering, self-service ordering allows customers to view a restaurant’s menu, select a convenient location, custom-build their order, prepay with a credit card or gift card, and schedule their own pickup time – all from their smartphone or computer.
Restaurants can offer online ordering through their own website, through a multi-restaurant site such as GrubHub, through a mobile app, via text or through Facebook. According to the Cornell study, the most commonly used platform for ordering is online at the restaurant’s website, which makes sense since the Internet has become the No. 1 decision tool for deciding where to eat. However, as phones become smarter, developers expect ordering via mobile phones to outpace online orders.
Noah Glass, founder of Online Ordering (www.olo.com), which provides online ordering platforms for more than 150 top restaurant operators, has seen significant growth in the number of brand-specific mobile applications offered and used. For example, his company saw approximately two app orders Today, OLO’s brands average five app orders for every one mobile web order.
The Cornell study reported that restaurants that adopted online ordering saw a substantial increase in order frequency and volume, increased customer satisfaction and more targeted marketing. Let’s examine each.
1. Increase order frequency. With 17 locations in Georgia, Cold Stone Creamery was the first national ice cream concept to launch online ordering for its ice cream cakes. Jana Schneider, director of marketing, reported a big jump in frequency of cake orders since they launched online ordering in early 2011, and the site already has more than 55,000 customers. Schneider is hopeful that the chain’s mobile ordering service, which launched in October 2011, will grow by an even greater multiple.
“Our mobile site has been a successful addition to our online ordering program,” Schneider says. “It was created so that Cold Stone customers – like busy moms and dads – can order a cake anytime, from anywhere and never miss celebrating an occasion with a Cold Stone Cake.”
2. Increase order volume. According to the Cornell study, the real boost in online selling comes from volume. On average, about a third (29.1 percent) of operators reported an increase in order volume, and another 32.3 percent indicated that they had experienced both increased sales volume and increased service.
Study respondents reported a bump in catering of about 14 percent, and self-service ordering makes group orders a snap. For example, Bullritos, a burrito chain that recently opened its first Georgia location in Covington, uses a platform that allows customers to order with a group using Facebook. Customers invite friends or co-workers to order as a group through a status update. The invitees click on the link posted in the status update and check off their favorite lunch items from the restaurant’s menu. The invitees items are then added to a group order, the order is submitted online and – voila! – lunch for the office.
3. Increase average check size. Noah Glass of OLO also reports an increase in average check size among his client list, which includes such large chains as Sonic and Subway as well as smaller, regional chains. Glass estimates that most of his clients see a 25 percent jump in average check size. He attributes the increase to the ease of ordering and suggestive selling logic built into OLO’s software.
“When customers order from their smartphone or computer, they can go at their own pace,” Glass says.‘If dining in, they are not pressured by a long line or impatient cashier. If calling in an order, they are not left waiting on hold or struggling to communicate order details to a busy employee. So they order everything they really want.”
4. Increase marketing RI. A recent study by BIA/Kelsey found that 97 percent of customers use the Internet when researching local buying decisions. However, with nearly infinite ways to find a restaurant – Google, Facebook, Citysearch, Yelp, Foursquare, Twitter, etc. – it can be tough for an operator to stand out.
Online ordering cuts through the noise. When a customer clicks on a restaurant’s branded ordering site, he or she is transported from on-the-couch-searching-the-web to first-in-line-at-the-register, ready to order up their lunch, dinner or late-night snack. Furthermore, when a customer places an order through the self-service ordering platform, they are offered a chance to opt in for the restaurant’s email database program, so savvy marketers can target customers with just-right promotions.
How To Get Started
First, consider your total number of units. Ten or less? Market-leader GrubHub allows operators to post menus and locations on its platform, easily searchable by its customers in 75 major cities and 300 college campuses across the U.S. Customers use the GrubHub platform, but the orders (and revenue) come to you. For operators with 10 or more locations, providers like OLO can build a customized online ordering website for your brand.
Second, consider your point of sale. Tad Phelps, vice president of sales for Atlanta-based NCR Hospitality, recommends choosing a self-service ordering system that integrates seamlessly with your POS system.
“Pick a solution that integrates tightly with your POS system,” says Phelps, whose company develops software applications for both quick-service and table-service format. “It’s also important to look for a solution that also offers more than just ordering. A good system will offer integration to customer loyalty programs and gift card redemptions and provide for the ability to gauge customer feedback.”
If you are a small operator without a sophisticated POS system, you can still get into the self-service action. Companies like OLO offer online ordering software that can run on any Windows-based machine, including a personal computer.
Last but not least, start making a return on your investment. In the Cornell study, half of respondents said that the ROI of online ordering was exceeding their expectations, and another 45.5 percent said that it had met their expectations for ROI. Add it up? Nearly 100 percent of restaurants polled believed online ordering was worth it.
Ellen Hartman is president and CEO of Hartman Public Relations, LLC, a full- service public relations agency specializing in the foodservice industry. Hartman and her team have experience working for full service brands such as Chili’s, Huddle House and Olive Garden, fast casual brands such as Cosi, and many QSR brands including Popeyes, Church’s, and Arby’s. An industry leader for more than 20 years, Hartman is a frequent speaker at industry events, is active in the Women’s Foodservice Forum and Les Dames d’Escoffier International and has served on the board of the Multi- Cultural Foodservice Hospitality Alliance.