The restaurateurs who are thriving in today's business climate are the ones paying close attention to the latest trends in online ordering.
Younger consumers are more likely to place food orders online than older customers, creating a spike in digital orders that is not expected to slow any time soon. The latest statistics show that digital ordering is growing 300 % faster than dine-in traffic, according to Marcus Higgins, VP of sales at EatStreet, an online ordering provider.
The mobile component of digital ordering now makes up about 23 percent of all food orders, mostly in the sandwich category.
During a recent webinar in partnership with the National Restaurant Association, Higgins shared 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 in the webinar. “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.”
Online orders also are popular with restaurant workers because phone-in orders distract employees from their work. Eliminating that interruption allows employees to be more focused on tasks at hand, as well as more efficient.
As the industry moves more and more toward digital dining, some of the top trends in online ordering include:
Single app spaces: Several companies (EatStreet, GrubHub, etc.) 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 programs are heavily impacting the restaurant industry by allowing businesses to collect important information about their customers. The entire goal behind these programs is to increase revenue per customer and create new 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,” Higgins 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: You can implement an online ordering function onto your restaurant’s Facebook page to try and monetize your relationship with social-media 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:
“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: On an ever-increasing basis, restaurants are partnering with delivery services like GrubHub, EatStreet, and Eat24 because of the convenience 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: In this model, companies charge a small percentage of incremental fees for the customers they bring you instead of flat fees. It is a growing trend that allows restaurants to 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: For today's successful restaurateur, it is important to embrace online ordering because of the younger consumer preference. It also creates repeat customers. An online customer is more likely to re-order within 60 days than a walk-in customer, simply because the platform is more accessible. An added benefit is that their information is stored with the restaurant, which can help restaurant owners shape marketing strategies and motivate purchases.
At the end of the day, however, Higgins said it’s important to have a good balance between online and in-store traffic.
"Both have their benefits," he said. "And neither are going anywhere."