The restaurant industry is undergoing a revolution that’s having a serious impact on customer’s dining habits. Online ordering has grown by leaps and bounds in the past five years, making it a potentially lucrative source of additional revenue.

Along with increased sales, mobile ordering can boost productivity and improve customer experience by leveraging user analytics. It also costs money, however, which can potentially lower profit margins.

Are these tools a boon to your business or a drain on your resources? Below, we investigate the potential benefits — and implications — of restaurant online ordering services.

 

Streamlined Efficiency

One of the major benefits of enabling online ordering is the ability to take more orders, faster. A customer typically takes between one to three minutes to input an order online. That’s one to three minutes more time you can spend waiting on customers, cooking food, or cleaning tables — rather than being tied up on the phone. These services can be integrated directly into your Point of Sale (POS) system as well, streamlining the entire process from the customer’s first click to the time you ring them up.

Online ordering services may also reduce food waste. When customers are allowed to select menu items for themselves, potential miscommunications between the server and the patron are avoided. Customers get more consistent, convenient orders, and you get to throw less food away at the end of the day.

 

New Revenue Channels

By improving efficiency, online ordering tools offer you the opportunity to turn a tidy profit and edge out your competition. A Fortune restaurant survey found that online ordering now outpaces phone ordering, with 6.6% of orders placed via mobile apps compared to 5% placed over the phone. Customers are spending more time on their mobile devices than ever, and smart restaurant owners are taking advantage of that fact.

Investing in online ordering may drive revenue in ways you didn’t expect. For instance, pizza orders made online average 18% higher than those placed over the phone. Online orderers tend to be loyal, too: patrons who have placed an online order with a restaurant have been found to visit that establishment 67% more frequently. Mobile ordering has the potential to boost takeout revenues by 30% overall.

 

Expenses and ROI

Although online ordering can increase sales, it’s important to evaluate the true cost of implementing it. Restaurant online ordering services will require a financial outlay to cover the cost of using them, typically expressed as a monthly fee plus a percentage of the total bill. Some services have better rates than others; for example, the fee for CAKE’s online ordering service is an industry-low rate of just 5%. Save your restaurant from paying the 15%-20% per order that other online ordering systems charge.

If online ordering takes off, though, you may need to devote more resources to takeout workflows, which means hiring new team members — and a bigger payroll. The effect on labor costs is something to weigh carefully before you implement online ordering.

 

Ordering Analytics and Algorithms

Beyond the improvements in efficiency and revenue, online ordering services can also provide a more tailored experience for users. These systems collect a great deal of data about the makeup of your customer base, including each patron’s ordering history. This allows customers to quickly reorder “the usual”.

Many tools use algorithms to make recommendations for returning customers or suggest common add-ons. These features put a personalized spin on the ordering process while adding convenience. But they’re also a great way for you to gather feedback. It’s easy to tell if an online coupon was effective if you have the data right in front of you. What’s more convenient for the customer may also be much more enlightening for you.

 

The Bottom Line

Evidence suggests that online ordering may soon become a basic cost of doing business in the restaurant industry, at least for quick service restaurants (QSRs). In 2017, mobile ordering grew by 50% in the US, and it’s predicted to make up over 10% of all QSR sales by 2020. That growth may disrupt in-person dining, but it also expands reach and leads to faster, more efficient service. Therefore, for many QSRs, the question is not if they should implement mobile ordering, but when.

Whether you decide to invest in mobile ordering now or wait until the model is more established, it makes sense to start investigating available platforms. For a window into CAKE’s online ordering tools, contact us today to schedule a free demo. Your restaurant’s technological future awaits!