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Tools By Jamie Hartford
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 QSR. Subscribe and get QSR delivered to your door twelve times per year.