Outside Insights | May 2015 | By Guest Author

The Case for Digital Ordering in Quick Service

In the new age of fast-casual competitors armed with digital-ordering capabilities, drive-thru fast isn’t fast enough.
Quick service brands use online ordering programs to speed up customer experience.
Noah Glass is the founder and CEO of Olo. image used with permission.

Forty years since the first McDonald’s drive thru was created near a military base in Arizona in 1975, drive-thru and fast-food restaurants have come to dominate the American restaurant industry. With 75 percent of restaurant industry transactions consumed off-premise, drive thru is a perfect fit for our on-the-go lifestyles. As a consumer, the convenience of remaining in your car while you order, pay, and pick up your meal is unbeatable, whether it’s breakfast, lunch, dinner, or a snack in-between. It’s no surprise that drive-thru transactions make up an estimated 70 percent of quick-service restaurant transactions.

As fast-casual restaurants came onto the scene in the 1990s and 2000s, they did so at a time of increasing digital ubiquity and familiarity for the American consumer, beginning with PCs at home and in the workplace and now smartphones in every pocket. These fast-casual operators saw an opportunity to compete with the fast-food giants through higher-quality ingredients and made-to-order personalization and used digital technology to level the playing field on convenience. Even if you can get a customer through your drive thru in 180 seconds, a fast-casual operator can serve their customer a made-to-order personalized meal in even less time by letting his guest order and pay ahead so that the food can be prepared while the guest is traveling to the restaurant to collect his order. The customer can park, walk in to the restaurant, skip the line at a dedicated pickup counter, walk back out of the restaurant, and drive off, all in under 180 seconds.

Nearly 50 percent of fast-casual operators have embraced the digital ordering shift and successfully neutralized the convenience advantage of their fast-food competitors.

Today, nearly 50 percent of fast-casual operators have embraced the digital ordering shift and successfully neutralized the convenience advantage of their fast-food competitors. As fast-casual operators have made the digital ordering shift, they have seen the following additional benefits: larger average order size (guests no longer feel rushed and are given suggestive selling recommendations through the digital ordering channel 100 percent of the time); higher visit frequency (loyal guests return more frequently when given the convenience of getting to skip the line at pickup); reduced food waste (some operators mandate that guests must pay in advance at the time of their order, eliminating the risk of no-show guests); and improved order accuracy (removing the human element and potential for misheard/misunderstood orders or mis-entered orders, because the order is going from the guests’ PC or mobile phone straight to the prep line printer).

Should fast-food operators explore digital ordering for their own operations? Some may scoff at the idea and think, “My drive thru is fast. Isn’t fast food fast enough?” These operators disregard the larger digital shift and its impact on their businesses at their peril. Digital is reinventing the world as we know it, quick-service restaurants included. Simply put: digital ordering is what today’s guest expects.

Imagine if your quick-service restaurant had the potential to serve multiple car-bound guests simultaneously (parallel processing) versus one at a time through the drive thru (serial processing). I am not recommending a multi-drive-thru-lane strategy. I am recommending a new approach entirely, one that combines the convenience of digital ordering and expedited pickup, removing the need for a speaker box and confirmation board and enabling greater throughput through the technology that your guests are carrying with them throughout the day.

Beyond increased throughput, the shift from analog ordering to digital ordering will lead to vast new opportunities for quick-service restaurants to better know their guests. Instead of viewing each transaction as a one-off encounter, digital ordering enables restaurants to personalize the guest experience based on past order history and make recommendations of what other guests with similar tastes have enjoyed through targeted suggestive selling. That may mean changing the way that the restaurant markets new products to guests, making such communications more thoughtful and tailored on a one-to-one basis rather than a mass marketing bullhorn approach.

The shift to this digital ordering enabled future will be fast, but not easy. It will require the largest quick service restaurant brands to change the way that they have been operating over the past 40 years. That will require leadership from quick-service restaurant executives to make holistic adaptations to their service models, which will necessitate both clear vision and strong communication with stakeholders (including shareholders). Those focused on incremental improvements to the drive thru as it is and has been for the past 40 years will miss the boat, only to be overthrown by those who see the current moment in the restaurant industry for what it truly is: a digital revolution that demands a new quick-service restaurant service model. Drive-thru fast isn’t fast enough.

Noah Glass is the founder and CEO of Olo. Since 2005, Olo has helped restaurant brands increase revenue per square foot by delivering faster, more accurate, and more personal service through digital ordering. Today, more than 10 million consumers use the Olo platform to order ahead and Skip the Line at the restaurants they love.

Comments

The way mobile has taken control over our lives, restaurants have no choice but to put digital ordering as one of the key offerings to their customers. Mobile apps will act as concierges with very intelligent recommender assistance based on your diet preference, companies such as Restolabs are working on evolving such processes already.

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