Online Opportunity
How internet ordering can bring fast-casuals up to
speed.
For many people, the internet is the primary window to
the world. They shop, pay bills, plan vacations, talk to friends, study,
and even work online. Just about the only thing they can’t do on
the web is eat.
Or can they?
Many restaurants are taking advantage of
Americans’ increasing affinity for internet by offering online
ordering, whereby patrons can peruse the menu, point and click to place an
order, and pick up their food without ever using a telephone.
“Many customers demand the convenience of
ordering whenever they want, at their own pace and without having to hold
on the phone,” says Hilton Keats, chief technology officer for
OrderTalk, Inc., a provider of online ordering solutions.
That convenience is especially important to corporate
lunchers, who, in the face of ever-shortening lunch breaks, don’t
have time to wait in line or on the phone.
“If your customers are saying, ‘I only
have 30 minutes for lunch,’ and you’re shaving off 15 minutes
by having their food ready and waiting, that’s an improvement,” says
George Narr, president of QTS Software, a company that also provides internet
ordering for foodservice clients.
That improvement, he says, is just what fast-casuals
need to challenge their faster quick-serve rivals.
“It’s going to allow fast-casuals to
compete with the McDonald’s of the world,” he says.
Here’s how it works: Once an order is placed
online, usually via a link on a restaurant’s web site or through a
provider’s online directory, it reaches the restaurant in one of
three ways: by phone, fax, or e-mail. Some systems can even be integrated
directly into a restaurant’s point-of-sale (pos) so orders pop up in
queue just as if the customer had been waiting in line. The only difference
is that no employee has to listen to the order and key it in, greatly reducing
the potential for human error.
“What we want to do is make this the perfect
waiter or waitress or cashier,” says Narr, whose QTS Software
solution can be completely integrated with POS.
But increased accuracy and convenience aren’t
the only benefits online ordering can offer.
“In some cases, it can really expand the number
and kind of customers you have,” says Aaron Beverly, vice president
of development for MenuEngine’s eHungry.com ordering system.
In addition to attracting patrons in the time-starved
corporate world, online ordering also opens up an avenue to reach
computer-crazed college students.
“Students order a lot of food, and if
[restaurants] market this to them, they can make a bundle, especially if
they’re open late,” says Tedra Cordisio, senior product manager
for eOrders.com. “There will always be hungry students on computers
in dorm rooms.”
One ordering site, Campusfood.com, was founded on just
that principle. CEO Michael Saunders launched the site in 1997 in response
to his frustration over getting busy signals while trying to order a tuna
sandwich as a student at the University of Pennsylvania. It’s now
affiliated with approximately 1,500 restaurants at more than 300 college
campuses nationwide, says Christine Heller, a spokesperson for the site.
“It’s going to allow fast-casuals to
compete with the McDonald’s of the world.”
Part of Campusfood.com’s success can be
attributed to the aggressive marketing it engages in on behalf of its
partnering restaurants. On campuses where it’s used, student
representatives pass out flyers, and the site even assists some restaurants
in promotions that reward students with a free first order when they sign
up.
Other providers also assist their clients in getting
the word out about their online ordering capabilities, and
eHungry.com’s Beverly insists that such marketing is crucial.
“If a restaurant doesn’t tell its
customers that it has this technology, it’s not going to take off for
them,” he says.
Online ordering can be used as a marketing tool in and
of itself, too, as customers are usually required to provide a valid e-mail
address when they submit an order.
“I can literally send out e-mails to 300
customers about our specials with the push of a button,” says Charles
Howd, general manager of a Tropical Smoothie restaurant in Jensen Beach,
Florida, that uses the QTS Software system.
On top of that, online ordering provides consistent
computer upselling and more freedom for customers to familiarize themselves
with the menu, factors that can raise the average check by 25 percent,
says OrderTalk’s Keats.
And the technology isn’t just for larger chains,
either. While a POS-integrated system runs around $200 for the initial set
up and charges a monthly service fee of between $60 and $70, fax-, e-mail-,
or telephone-based systems often have little or no setup fees and typically
charge only $0.10 to $0.15 per transaction. These types of services are
great for smaller restaurants that can’t afford to update their POS
systems but already have a fax in house.“It’s great for small
restaurants that can’t afford large enterprise solutions,” Beverly
says.
Such was the case with Adam’s Subs and Salads,
Inc., an eHungry.com client and single-location sandwich shop in Pompano
Beach, Florida. “The beauty of the system was that everything was
already in place,” owner Adam Siegel says.
In any case, online ordering can really set a
restaurant or chain apart from its competitors. “We operate in a
small town, so we try to do what others in town don’t,” says
Craig Wallin, president and CEO of Pizza Planet, Inc., a nine-unit chain in
Minnesota and Wisconsin. “[Electronic] ordering was one thing we
decided to do because no one else in our area did it.”
So why don’t more restaurants offer online
ordering, especially when eOrders.com reports that its partner restaurants
bring in an average of $4,000 to $5,000 in online orders per month? It all
comes down to technophobia, Beverly says.
“Initially it can be a hard sell,” he
says. “Some restaurants are concerned because ordering food is not
something that’s traditionally been done online. What they
don’t realize is that people order almost anything online anymore and
this works at least as well as what they were doing before.”
Narr, on the other hand, says perhaps online ordering
isn’t for everyone just yet.
“If you’re located in rural America,
it’s not going to work very well,” he admits. “But if
you’re on U.S. Highway 1, where there are lots of offices with
computers on the desks, you’re going to see this thing take
off.”
Still, Cordisio says, online ordering will soon be the
norm rather than the exception.
“Some of these chains are saying, ‘We can
see it coming, but we’re going to wait a little longer,” she
says. “What I would tell them is that they better get in there before
everybody else on the block has it.”
This column originally appeared in the September 2005 issue of
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