Online ordering outlay offers potential payoff

Jan. 12, 2009
While people visit restaurants mainly for the food they provide, research shows that service and convenience strongly influence where they ultimately choose to eat. A simplified meal experience is essential for busy, time-poor customers and anything that shaves minutes or seconds off that effort is valuable.
In the past few years, online ordering has evolved into an ideal tool allowing operators to do just that, and in the process it's become an affordable and profitable sales channel. Modern online ordering systems are stored on servers outside the restaurant, leaving operators tethered to the system only via video terminal, printer, fax or the Internet. Ultimately, that means minimal expenses for the operator, reduced costs overall and a greater return on investment.
High return for a small expense
Unlike the substantial investment required to equip a new restaurant, minimal capital outlay is needed to launch an online ordering system. Since most online ordering systems use computer networks running outside the restaurant, there's little to no actual investment required on behalf of the operator.
Services commonly are paid for on a contracted monthly basis: some by a flat rate, others on a fee-per-transaction cost, and still others using some measure of both. Such contracts typically don't include fees from credit card transactions.
While all providers' rates vary, well-managed online ordering channels become new profit centers, according to Deborah Sellers, owner of Sellers Markets in San Francisco.
"Probably 35 percent of all our orders come from online now," Sellers said. "There's no question our business increased as a result of this."
She attributed the significant portion of orders to her Web site's ability to handle a large number of lunch orders within a narrow window of time, a task she believes even several human order takers at the phones couldn't do.
"We're located in the Financial District of the city, so our customers have very little time to eat, and they all want to come in at the same time," Sellers said. "If they can't call in or the line is too long at the door, that discourages people and they might go elsewhere. We accommodate for that with online ordering. It's critical for our business."
Jodi Aufdencamp, co-owner of four-unit Mama Mimi's Take 'N Bake Pizza in Columbus, Ohio, said she didn't think her company needed online ordering until she discovered how  many hits her company's Web site got each month. When it dawned on her that customers only could look but not buy, she started searching for a way to provide a purchasing option. Yet without a complex, networked point-of-sale system in her stores, she imagined a cost-prohibitive investment would be required to get it going.
"We always like to be a step ahead of our competitors, but we didn't see how we could compete with online ordering because we thought surely it was too expensive," she said.
Aufdencamp was surprised to discover the affordability of implementing online ordering.
"I said, 'Let's get it going!' … Now Internet orders account for about 5 to 7 percent of our total orders. … No doubt it's paying for itself."
The basics
One reason the operator investment is so low is most modern online ordering systems reside with the provider, not inside the restaurant. The online ordering provider houses the system's servers and network in a central location that transmits orders to its restaurant clients all over the country. Using those networks, orders from customers are routed to the restaurant via one of the following means:
  • A fax machine
  • An IP printer connected directly to the 'Net
  • A video order monitor, often a touchscreen
  • Directly to the restaurant's electronic ordering and/or POS system
The first two are the lowest-cost means of receiving online orders. However, they require the added steps of a quick confirmation call to let customers know their orders have been received, and the reentry of the order into a POS system or cash register at the restaurant.
The electronic monitor also requires a confirmation call, though the final order is "pushed" electronically to the restaurant's POS system rather than reentered. The fully integrated option sends all orders directly to the restaurant's makeline without any human intervention, and confirmation is handled automatically by a computer and typically through e-mail.
Paul Fournier, vice president of nine-unit D Brian's Deli in St. Paul, Minn., said not only was the fax delivery the lowest-cost option available, he said he and his staff preferred it because of its simplicity and the way it fit the company's existing kitchen system.
"Since we handwrite all our (customer orders), there wasn't a need to have something more elaborate like email," Fournier said. "We position the fax machines strategically (on the makeline) in every one of our stores so everyone can see them. If we used email … I fear we'd miss that kind of an order."
Since D Brian's began accepting Internet orders four years ago, Fournier said the cost of the initial investment continues to shrink with the ever-growing volume of orders pouring in from the 'Net.
"Our catering volume has increased substantially every year for a long time, and that is definitely attributable to the convenience of the online order engine," he said. Many customers use its 24-hour capabilities to place orders after hours. "We don't want them calling and (finding) we're not there or we're busy and then they decided to call somewhere else. This allows them to order when they want. That's a huge convenience."
Guest check averages see a boost
Despite all the suggestive selling done with recorded messages and phone scripts for CSRs, nothing sells as effectively as lingering over the menu on the Web, especially one with detailed full-color pictures, Aufdencamp said.
"We train all our people to suggestive sell at the counter," she said, describing the interaction between pizza makers and customers as their pies are made to order and in front of them at the store. "And even though they do it on the phone, too, I think the customer is more relaxed in front of the computer. They don't have to worry about a line of people behind them waiting to order."
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That ability to linger while ordering leads to greater average checks, too, operators say. In published reports on, Papa John's officials claim online check averages are 10 percent to 15 percent higher than those placed at the counter or over the phone because customers can see the full menu, specials and all. Allowed to shop at their own pace, customers discover items they didn't know were there before and give them a try.
"We see our customers skew a little bit more toward our specialty pizzas when they order online," said Chuck Hammers, founder and CEO of Pizza My Heart in Los Gatos, Calif. "They've got the time to look and say, 'Boy that looks good. Maybe I'll give that a try.'"

Topics: Online Ordering

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