Web ordering: From computer to makeline

Most pizza operators have been slow to adopt online ordering, but it's fair to say they've had good reasons.

Despite being hip, few Web-order pizza applications generate much return on investment. And many, despite their eye-catching interfaces, are decidedly low-tech and clunky on the operational end. Bottom line, picking up the phone remains the quickest and most-often chosen way to order.

But there is good news. Those reasons are increasingly insignificant hurdles to Web ordering.

Pizza companies using online ordering successfully are learning there's more to using the Internet than tapping into gee-whiz technology. It's a means of attracting customers who want the convenience of advance ordering (often for office functions and caterings, or a no-thought meal to be delivered when the babysitter arrives). It's also for people who like to linger over the menu without feeling rushed by a human order-taker. An online ordering portal captures customer data for direct marketing and for suggestive cyber-selling (i.e., "You ordered a supreme pizza last week. If you'd like to order that again, click here!") And perhaps most significant of all, customers tend to spend about 15 percent more per ticket ordering pizza online than if they call the shop.

Niko Frangos

What's Important

Pizza operators are beginning to see Web ordering not as a means to replace phone ordering, but rather as a way to increase ticket sizes.

Research shows Web users like to linger over the menu longer when they're not rushed by a human order taker, and they typically spend 15 percent more as a result. 

The convenience of being able to order in advance is a strong draw for large ticket orders, such as business functions.

knows both the bad and the vastly improved experiences of online ordering. As vice president of six-unit Rascal House Pizza Café in Cleveland, he suffered through the challenges of a primitive Web-order system that the company ultimately wouldn't even promote to its customers.

"We never could work all the bugs out of the site," said Frangos. "Either it was very cumbersome for the end-user or we couldn't get the data we needed."

Still, the company believed in the possibility of Web ordering, so it sought help from O-Web Technologies, a Cleveland-based e-commerce Web site developer. The charge from Rascal House was simple: Either help us to do it right or we won't do it at all.

After a year's work, Rascal House's e-commerce site is ready for a late June launch when the company will, with a great deal of pride, tell customers it's available. Not only is it end-user friendly, Frangos said fully 90 percent of its back-end administrative functionality can be handled by a staffer.

"I'm maybe one notch higher than average Joe when it comes to computers, but I'm not a real techie. Still, I think the admin is pretty simple," he said. "Now there's so much we can do to build the business with this."

Pizza Pan, a 100-unit Cleveland-based chain, also is launching its Web-ordering system this month. Mike DeGirolamo, the chain's director of franchise operations, said the system is designed to allow every operator of every store to tweak his menu and specials online. When customers enter their addresses, the system determines which store is closest to him and which menu offerings those customers see.

He expects online ordering to boost efficiencies at Pizza Pan in multiple ways.

"This will cut back on errors in the kitchen and increase our average ticket size," DeGirolamo said. "We want those Web pages to be selling pages for us. And really, we already know they do because (in our tests) we've seen ticket averages increase as much as 18 percent."

Electronic assistance

O-Web developed both Pizza Pan's and Rascal House's sites, which means both essentially work the same. Customers set up accounts including their address and payment information. They order exactly what they want, including particulars such as no mayo on a sandwich, and state exactly when they want the order to arrive. For large orders, such as at an office, the names of each person can be placed beside each order on the ticket to ease distribution after delivery.

When the customer sends the order, the pizzeria receives an order ticket via TCP/IP printer. (A lower-cost fax printer is also available, and O-Web is working with POS manufacturers to integrate their system so orders can go directly to order terminals.) That ticket's info is entered manually into the POS system, where it's handled normally. The system then sends a confirmation e-mail back to the customer telling them the order was received.

To simplify future transactions, each customer's order history is retained on the Web site. All customers need do is click a "reorder" button should they want the same thing, and it allows the system to upsell the customer based on past orders.

"We call that intelligent upselling," said Stan Garber, senior sales manager for O-Web Technologies. "Say I buy a salad. The system will ask me if I want to get breadsticks with that. It's programmed to ask if they'd like a Coke with that."

Keeping that order history also allows operators to customize direct marketing offers to present customers. If a customer ordered a veggie pizza in the past, Frangos said he'd probably entice him with an offer centered on that. "This isn't just blind marketing to a customer base. We're able to market toward what they're already interested in."

Even after Rascal House begins promoting

start quoteWhen you're in an office setting, it compounds the benefit of the site. You go online, place the order and know when you've got that event coming up in 10 days, the order's done.end quote

— Mike Frangos, Vice President
Rascal House Pizza Cafe
the new site, Frangos doesn't expect a flood of orders coming from the Web rather than over the phone. Rather, he hopes his larger catering orders will increase because of the site's ease of use.

"Part of our business model has a big catering element to it because we do a lot of corporate lunches," said Frangos. "When you're in an office setting, it compounds the benefit of the site. You go online, place the order and know when you've got that event coming up in 10 days, the order's done."

DeGirolamo said increasing sales at Pizza Pan's stores is only part of the reason the company wanted a Web-order portal.

"When selling new franchises, we've found that potential franchisees want an operation that uses new technology like online ordering and POS systems running sophisticated programs," he said. "They don't want to hear that we're just another pizza house. These are experienced business people who understand that the more an operation is automated, the more efficient it is and the more money you save."

What's it cost?

Three-year-old O-Web has more than 75 clients, including the Cleveland Clinic and Case Western Reserve, where its three owners are busily finishing college. But despite their already impressive customer list, Garber admitted learning how to blend the Internet and the pizza business "has been an interesting ride."

Garber and his partners, Oleg Fridman and Alex Yakubovich, convinced Rascal House and Pizza Pan to share the development costs of their sites so they could learn as they worked.

O-Web also studied closely what is arguably the leading pizza Web-order portal in the industry, papajohns.com. It remains the only nationwide, fully integrated ordering system (i.e. orders go straight from customers'

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computers to the appropriate pizza store makeline) in the United States, and the company views the tool as a significant component in its targeted marketing efforts.

Now that O-Web has what it believes is a solid system, it wants to sell it to other pizza companies. Its business model is most profitable based on a system set up for chains of 50 or more units. For a registration fee of $50 per month per store, O-Web produces a custom Web site and tailors it to each company's preferences.

"A custom Web site that really works well costs $15,000 on average, and that's included in our plan," said Fridman. "All we ask is the pizza company commit for a year."

Based on the size of his catering orders, $600 a year would reap a large return on investment said Frangos.

"No corporate lunch is going to spend $800 from Domino's, but we have those orders every day," he said. "We're in a business district location where people know the quality of our food, and this will be a great way to attract them."

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