Phoning It In: Digital Ordering
Mobile order and pay-ahead apps boost sales and customer loyalty – but restaurant operators must address Mobile order and pay-ahead apps boost sales and customer loyalty – but restaurant operators must address the legal issues that come with digital ordering, too.
Only a few years ago, customers relied on restaurant mobile apps primarily to find a nearby location or to browse a menu. But now, they’re reaching for their phone for a whole lot more.
“As a growing number of restaurant chains move into the mobile/digital space, the features available to guests are become increasingly complex,” according to Lisa Jennings, West Coast Bureau Chief for Nation’s Restaurant News. Guests are turning to digital ordering - mobile apps to order ahead, pay, and skip the line. They can choose to have meals delivered, order and send gift cards, study nutritional information on menu items and track their loyalty rewards points.
Restaurants that do tackle these privacy issues, and design their mobile apps for digital ordering well, are reaping the rewards.
“Digital ordering leaders are enjoying larger than average order sizes, increased visit frequency, and guest satisfaction,” said Noah Glass, CEO of Olo, a New York based provider of customized digital ordering systems for restaurants.
With their focus on takeout, pizza providers have chalked up the most digital ordering experience, first in online and now mobile ordering. According to Pizza Marketplace, it took 15 years for Papa John’s, Pizza Hut and Domino’s to go from zero to 50 percent digital. Now, all three brands see more than 50 percent of their sales coming through digital ordering (where customers order from a personal computer or smartphone) versus analog ordering (customers order over the phone or in person in the store) .
Olo’s Noah Glass believes that the rest of the restaurant industry – within the spectrum from quick service to casual dining -- is well on track to achieve that 50 percent digital market share by 2022, in half the time that it took pizza to get there.
“If you think about what that entails, a shift in that non-pizza limited service base, which is around a $200 billion annual sales space, to 50 percent digital means that $100 billion is going to shift from where it is today to brands that are doing digital ordering well,” Glass said.
Glass adds that when consumers shift to digital ordering, they tend to visit about 30% more often. A guest who visited three times a month may start coming in four times a month, for example. And often, customers spend more when loyalty incentives and upselling are incorporated in the mobile app.
“When you combine these two things and you think about someone coming in extra times per month and in all of those visits spending 25 percent more, you have an incredibly powerful platform there,” Glass said.
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