Press Coverage reprinted from QSR Magazine.com, October, 2007
Logging On for Takeout
While restaurants and service providers say online ordering is ready to take off, the statistics show it is still in its infancy.
Now that the Internet has become an omnipresent factor in daily life for most Americans, there’s no doubt it will continue to change how restaurant goers interact with quick-serve and fast-casual locations. As the online world changes how voters learn about presidential candidates and communicate with friends and loved ones, it will also change how hungry people order food from their favorite restaurants.
Already a number of quick-serve and fast-casual chains are allowing customers to place pickup and delivery orders over the Internet. According to the National Restaurant Association’s 2007 Restaurant Industry Forecast 13 percent of consumers have placed an online order. Yet an industry researcher gives a cautious take on the implications of increased online ordering numbers.
Harry Balzer, vice president of NPD, a consumer marketing research firm, believes the perceived growth in online ordering trends can be attributed to the fact that the market was so small to begin with. “When you have one order and all of a sudden you have two, that’s 100 percent growth,” he says.
Balzar’s most recent numbers on online ordering show that only 0.2 percent of all restaurant orders were made over the Internet, while 10 percent were made over the telephone. Four years ago, 10.9 percent of orders came over the telephone and 0.1 percent over the net.
Balzer isn’t completely convinced online ordering will grow in the future either. “Everything is possible, the real question is: Does it make life easier,” he says. He says that picking up a phone and ordering is still easier than firing up a computer and ordering food with a mouse.
One online ordering provider, BigHoller, is far more optimistic about the future of the Internet trend. The company cites the ability to build a customer database, reduce labor costs, and improve order accuracy as some of the benefits of starting an online ordering operation.
Some of the company’s clients feel the same way.
“Online ordering is just another one of those conveniences that people have grown to expect,” says Tony Marsters, IT director for Pita Pit. “As people become more familiar with these types of systems, they begin to feel more comfortable looking at the order they are placing as opposed to simply listing off an order to someone on the other end of the phone.”
The process for implementing online ordering capabilities into a modern restaurant, that is at least equipped with an electronic point-of-sale system, is simple.
BigHoller, for example, creates an ordering solution through new or existing restaurant Web sites. The company can create a branded menu and back-end order system and has been offering its current service for about a year. Big Holler Sales Director Mark Dineen says his employees can create a simple or elaborate online ordering face for a restaurant. BigHoller also provides online reporting features so managers can monitor the flow of orders. In addition, the company offers clients tools that allow managers to change menu details and inform customers of store closings without working through a Web master. The company counts Planet Pizza, Thunder Cloud, Wings To Go, The Original Soup Man, Dino’s Gyro, Mission Bay, and Chappy’s among its clients.
“Even with multiple phone lines and dedicated personnel, customers were becoming increasingly discouraged by hold times and busy signals,” says Steven Shaffer, Chappy’s IT Director. “We discovered that the majority of mis-rings resulted from this intense pressure of call volume—trying to speed through one call just to get to another which in turn led to further customer discouragement.”
Any restaurant could feasibly use online orders to collect take-out or delivery orders.
Though Dineen acknowledges online ordering accounts for a small percentage of the restaurant business, he says more companies are looking to add the service in the future.
Online ordering only made sense for pizza delivery three or four years ago, Dineen says, but now any restaurant could feasibly use online orders to collect take-out or delivery orders.
“If it’s not something they want to do today, in 12 to 24 months if you’re not trying to get it set up you’re going to be behind,” he says. “[This] is sort of the crest of the wave.”
Banking on that potential growth, Direct Technology Innovations (DTI), a company that provides restaurant credit card processing, launched its own online ordering service, Click to Go, in May.
Terri Melle, DTI’s director of marketing, says company employees were placing a large lunch time phone order one day when they realized that utilizing a Web page to order the food would be faster and easier.
“We order lunch on a regular basis, and it was more and more cumbersome to order everything,” Melle says. “Someone said: ‘Wouldn’t it be great to order everything online?’ Marketing and sales found that we could do this fairly quickly and easily.”
DTI is partnering with two companies, Kudzu Interactive and Delphis Software, to create an online ordering function on any restaurant’s existing Web site. Company IT professionals will create the online tools for customers to place an order, which will then transmit through fax machine or point-of-sale system into the restaurant.
Melle pitches her company’s service as an inexpensive way for single restaurants or small chains to compete with huge franchises. “The larger players like Pizza Hut and Papa John’s make it hard for mom and pop,” she says. “We have single-store ownerships out there that can be competitive online.”
Click To Go services begin at $500 for setup costs and less than $1.50 per day to maintain, Melle says.
A recent online poll by AIS Media confirms the notion that a large number of restaurant customers are at least turning to the Internet to interact with restaurants. The June poll of 2,517 consumers nationwide via e-mail found that 89 percent of responders have researched a restaurant online before visiting, while 57 percent say they checked out the restaurant’s Web site.