Mobile is eating your restaurant

Nov. 22, 2013 | by Noah Glass
Mobile is eating your restaurant

I have devoted the last eight and a half years to the idea that smartphones would fundamentally change the way consumers and restaurants do business. It wasn't that a cashier scanning a smartphone could replace a cashier swiping a credit card. It wasn't that a cashier scanning a smartphone could replace a cashier punching a loyalty card. My vision was that the smartphone could deliver an experience that hastened operations, increased accuracy and led to more loyal customers.

The smartphone is the most personal technology device that we have ever known. It can travel everywhere. It's always on. It securely stores our personal information and payment credentials. And, above all, it's a remote communication device that enables us to transact from everywhere. Back when I started OLO, I glimpsed a world in which the consumer could control hundreds of transactions, with the smartphone serving as the register/POS. I imagined telling my kids about standing in line to order from a cashier in the same way that my parents told me about dialing with rotary telephones: an obsolete practice of another generation preserved only through memory.

Last month I listened as Henry Blodget presented data that bears out my vision. Blodget, Founder & CEO of Business Insider (and fellow RRE Ventures CEO), kicked off his talk at the Business Insider Ignition conference with his thoughts on "The Future of Digital: 2013," including staggering statistics on the growth of mobile.

Take for example: dumb phones. In 2005, when we launched OLO, more than 95 percent of phones were "feature phones," or what Blodget terms "dumb phones." The devices could make calls and send/receive texts, but could not access the Internet. Then Steve Jobs' iPhone came along and phones got smarter. In January 2010, nearly 20 percent of U.S. mobile phones were smartphones. In January 2012 that number jumped to 40 percent. By July 2013, smartphone penetration had surpassed 60 percent, overtaking dumb phones in the marketplace.

What's truly remarkable to me is not how pervasive smartphone ownership is, but how unbounded the growth of smartphone usage and media consumption time seems to be. Blodget reviewed six forms of media – TV, online, radio, print, other and mobile – to see which forms of media were losing "U.S. Consumer Media Consumption Share" and which were gaining. Only mobile is gaining media consumption share. In the past year, the medium grew from 12 percent of media consumption to 20 percent of global Internet traffic today. Mobile is where the eyeballs are going, which means ad dollars will follow suit.

And mobile goes beyond eyeballs. It's where the money is going, too. Blodget revealed that mobile is now 20 percent of e-commerce traffic. PayPal (part owner of OLO since December 2012) will power over $20 billion in mobile transaction volume in 2013.

So if mobile is not just where customers are spending their time, but also where customers are spending their money, how can restaurants use mobile to their advantage?

At the core of the consumer love affair with mobile is a new feeling of tech-enabled empowerment in which the consumer has the world at his beck and call. Just consider how Uber has changed the cab experience. Gone are the days of waiting with outstretched hand for what can seem like hours. The smartphone app allows customers to call a cab with a single button, as if by magnetic force. Today's customers expect this type of service in all of their transactions. And, according to a recent survey from Siegel+Gale, when consumers view businesses as simple, they are more likely to return or spend more money there. In fact, the firm estimates that businesses offering increased simplicity stand to gain $50 billion in revenue. (2013 Global Brand Simplicity Index)

Customers demand the service, they want their restaurant experience to be simple, and the technology to fire a prepaid order directly to the kitchen exists. It is now up to restaurants to adopt. Smart restaurants will evolve to meet changing consumer needs with mobile ordering and payment experiences – lest their restaurants suffer the same fate as dumb phones.

Topics: Online / Mobile / Social, Online Ordering, Operations Management, Systems / Technology

Noah Glass
Noah Glass is the Founder & CEO of Olo. Since 2005, Olo has helped restaurant brands increase revenue per square foot through faster, more accurate, and more personal service with digital ordering. wwwView Noah Glass's profile on LinkedIn

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