Younger consumers are more likely to place food orders online and through their mobile device than older consumers. They are driving the digital ordering trend, which is growing 300 percent faster than dine-in traffic, according to Marcus Higgins, VP of sales at online ordering provider EatStreet.
The mobile component of digital ordering is growing at an even faster rate and now makes up about 23 percent of food orders. During a webinar last week, Higgins, in partnership with the National Restaurant Association, provided an overview of the top online ordering trends that can help grow a restaurant business.
“The reason consumers prefer online versus traditional (phone or in-person) orders is because it offers instant gratification. It’s all about being able to have the convenience to go online, look at a menu, look at the items you want and not have to wait for someone,” Higgins said. “There are also other benefits, such as order accuracy and price checking, the elimination of any language barriers, and the convenience of already having your payment information on file, instead of having to enter it every time.”
Additionally, restaurants benefit from digital ordering because phone-in orders distract employees from their work. Having a staff without interruptions, Higgins said, pays for itself.
Some of the top trends in digital ordering include:
Single app spaces: Companies (like EatStreet, for example) are taking restaurants in a market area and making them all available in a single app, like a digital mall food court. This drives spontaneous ordering and provides a good way for consumers to learn more about what’s available.
“Participating is risk free. Online ordering companies usually charge a portion of the new orders we bring you through the app. It’s a great way to find new customers at a low risk,” Higgins said.
Loyalty and re-engagement programs: These are heavily impacting the restaurant industry and allow businesses to collect important information about their customers. The entire goal behind these programs, Higgins said, is to increase revenue per customer and increase newer customers coming through the door.
“Businesses that run loyalty programs have a 20-percent lift of frequency of visitation and have on average a 7-percent lift on average ticket,” he said. “The reason is the gamification of the model – it benefits them to come back, but also they know in real-time what they need to achieve to get to that next level.”
Social media to drive revenue: There are plenty of companies that can implement an online ordering function onto your restaurant’s Facebook page, to try and monetize your relationship with your social fans. Higgins said it is relatively easy to do and customers who use the functionality will spend more time on your page.
“You can see how many likes convert to sales. Restaurants are starting to see this as a trend and they really value the ability to offer online ordering to Facebook’s 1.5 billion users,” he said.
Mobile wallets: Higgins highlighted the three most common mobile payments options for restaurants, including:
- Mobile commerce, or paying online via an online wallet;
- Mobile payments that use in-app technology, where consumers download an app that has their information stored; and
- Mobile wallets, which replace the complete wallet and offer more security, he said.
“Consumers are using these programs to get back rewards, or some sort of incentive,” Higgins said. The benefit for restaurants is typically lower merchant transaction fees.
“Things are moving this way because it allows restaurants to track consumer buying habits, and it increases speed, customer loyalty and operational efficiency,” he said.
Restaurant delivery: Restaurants are increasingly partnering with delivery services, such as Eat24, GrubHub and EatStreet, because of online ordering. It allows restaurants to generate more customers through these providers’ extensive user lists, and to find new consumers without having to pay commission fees, Higgins said.
“For example, with EatStreet, restaurants can have access to hundreds of thousands of users. The restaurant delivery service pays online portal fees, which is a more cost effective way for restaurants to acquire new customers,” he said.
Try before you buy partners: This idea – companies that charge a small percentage of incremental fees for the customers they bring you, instead of flat fees – is continuing to grow. Restaurants can align incentives with the partners they choose to work with and avoid upfront capital.
“If a restaurant determines they’re getting a lot of orders through a partner, then they can go out and spend capital to make it more effective down the line,” Higgins said. “And it forces the partners to keep up with technology to bring you new orders. This way restaurants can focus on their areas of expertise – the food and the customer service – and not so much the technology upgrades.”
The value of online ordering. Finally, Higgins said not only is it important not to ignore online ordering because of the younger-consumer preference, but also because online customers are valuable. An online customer is more likely to re-order within 60 days than a walk-in customer, simply because the platform is more accessible, he added.
Also, when someone places and order online, a restaurant can learn a lot of information about them – their address, what they order, what they spend. This can help shape marketing strategies and motivate purchases.
At the end of the day, however, Higgins said it’s important to have a good balance between both online and in-store. "Both have their benefits," he said. "And neither are going anywhere."
Photo provided by Pixabay.