Is your restaurant ready to take advantage of guests’ new relationship with their smartphones?
Sara Senatore, Senior Research Analyst covering the restaurants sector at Sanford C. Bernstein interviews Noah Glass.
The latest capabilities of online ordering systems take the POS to a new level of functionality and profitability. Offering online ordering has become expected by modern consumers and options for doing so run the gamut from
Olo CEO, Noah Glass, ponders the ways digital commerce can help restaurants manage costs and staffing.
These days, the restaurant industry is embroiled squarely in the minimum wage debate. What if there was a new paradigm for how employees earned a living?
Our CEO discusses Surge Pricing - Will restaurants test variable pricing? http://goo.gl/X4KVoP
A flight to Denver during ski season is bound to be more expensive than the same flight in July, just as a bottle of Champagne is pricier in late December, and a Scottsdale resort is most expensive in January. It&rsqu
Join the Olo team! Take a look at our available jobs: http://olo.com/jobs
I book a flight to San Francisco. I need a jacket, so I have Trunk Club send me some new threads based on my preferences and their personal stylists. This triggers SilverCar to reserve an Audi A4 for when I land — no lines, no rental car agents, no credit card processing. When I get to my hotel, my OLO app asks if I’d like some carbonara delivered from my favorite Italian restaurant. I click yes. Realizing I forgot my charger, I order one from eBay Now to have it delivered to my room, and within the hour it arrives. My YPlan app shoots me some options for events that evening. I book a last-minute ticket to hear Alt-J at the Fillmore and recruit a few friends to join me. An Uber picks us up, and we’re off to a great night.
Five years ago this would’ve sounded like science fiction. Today it’s looking more like our mobile commerce reality. I call it the Smart Commerce movement, and it’s driving some major behavioral shifts.
As our phones have evolved from single-function devices to multitasking personal assistants, the very foundations of commerce have begun to shift. New technologies like PayPal’s Beacon and order-ahead services like OLO will soon render wallets and cards virtually obsolete. In just a couple of years we’ve come to expect our apps — think Yelp, OpenTable — to know our tastes and provide relevant, context-driven experiences. Mobile will soon become synonymous with personal concierge.
Since we’re still in the season of prognosticating, here are some predictions:
Conversions on mobile will increase significantly. Time spent shopping on mobile devices has risen steadily the past few years, but most of this is still time spent browsing. According to a recent BrightEdge study, mobile users convert at one-third the rate of desktop users. Why? Largely because improvements to the checkout and payment process haven’t kept pace with those on the browsing side.
Consumers still have to manually enter payment details — everything from credit card numbers to billing and shipping addresses — across almost every transaction. By the end of 2014, there will be a dramatic increase in the percentage of mobile conversions, as more businesses optimize the payment process. Mobile optimization will increasingly become the base level expectation; businesses that don’t remove the friction from m-commerce transactions will lose out.
Average order values will increase on mobile because of convenience and personalized experiences. Today, the average order value on mobile is relatively small, especially as compared to PCs. Historically, consumers have made their big purchases on PCs because browsing and comparing prices across multiple sites is easier on a large screen. But this year, for the first time, average ticket values on tablets surpassed those on PCs.
Mobile phones still have some catching up to do. But technology continues to improve, shopping experiences are becoming more tailored to the shopper, and retailers are directing more marketing toward mobile users. These factors will help consumers feel more comfortable making big purchases on their phones. If you search for a pair of jeans on your phone and instantly are presented with a pair that is the right brand and size, you’re not likely to take the time to shop for more options. Or if Pottery Barn does a promotion that gives you an extra 15 percent off if you buy that rug you’ve been looking for on your phone, you’ll be more likely to make that purchase.
Mobile shopping in the physical world will continue with the convergence of e-commerce and in-store commerce. A tiny percentage of mobile transactions at the point of sale are happening on mobile phones; I don’t expect that to change significantly next year. But the Uberization of the in-store experience will increase as larger retailers invest in making them happen. Case in point: Line-busting, where you pre-order the item you want, show up to pick it up and then buy it straight from your phone, without ever interacting with a sales associate. Showrooming, where people visit stores like Best Buy to explore and test products but buy them online, will also grow in 2014.
The mobile concierge will come of age. For as long as we’ve had smartphones, we’ve been sending them precise information about our interests. Mine knows exactly where I am at all times, which lunch spots I frequent, my favorite coffee, recent purchases and even upcoming travel plans. That’s a massive amount of contextual data, and soon our phones will be able to offer us concierge-like experiences, unprompted.
Smart Commerce is beginning to happen in cities like London, San Francisco, New York, and Chicago. In the months ahead, it will extend far beyond those hubs. In the very near future, commerce will become as effortless and magical as an Uber ride. Shopping will be a highly personalized, context-driven experience — one facilitated by the touch of a button.
It’s an exciting time to be making predictions, and for entrepreneurs an even more exciting time to build a platform to enable the mobile commerce of the future.
Pre-order your drive-thru orders?!? Our CEO, Noah Glass, says restaurants are considering this concept
Mobile ordering, a popular tool in the fast casual segment, is only now beginning to be seriously explored by fast-food chains and casual concepts.
Behind the Scenes, Innovations and Trends, On the Plate, Technology
Where will mobile ordering take restaurants next?
By Janet Forgrieve on January 13th, 2014
Fast casual isn’t just the fastest-growing segment of the restaurant industry, it’s also out in front when it comes to adopting mobile technology for ordering and payments, tools that fast-food chains and casual concepts are only now beginning to seriously explore.
“Drive-thrus are starting to think about using self-serve and digital ordering — enormous restaurant groups with thousands of locations are saying, ‘this is really important to me,’” says Noah Glass, CEO of mobile ordering provider OLO.
On the casual side, chains including Applebee’s and Chili’s are experimenting with table-top tablets designed to speed service, boost average checks and give guests a gadget for playing games and paying the tab.
OLO, which launched in 2005 to provide restaurant chains with online and mobile ordering capabilities, counts fast-growing chains including Five Guys Burgers & Fries and MOOYAH among its clients. Mobile has been outpacing online as more consumers carry smartphones and find new ways to use the gadgets to connect with the world and simplify their lives, Glass says, a trend that makes him wonder whether restaurant patrons will turn from their personal devices to public computers when they sit down at a restaurant table.
“My view is that when you have every customer walking around with a smart device in their pocket that has more processing power than a computer did 10 years ago, why would restaurants need to pay the hardware costs and maintenance for these devices? I ultimately think that, if I have the ability to pull out my own device and I have a credit card on file and I can get through with one click, why would I want to use a public device that’s sitting on the table?”
Whether they use their own mobiles or the public ones, though, the digital gadgets are destined to become a bigger part of the restaurant experience, especially among Millennials who have grown up with them, says Technomic’s Product Innovation Director Mary Chapman. “Younger people assume that things will be made easier and easier for them, that things should be simple and streamlined,” she says.
OLO’s growth mirrors the rise in mobile adoption. It took the company six-and-a-half years to reach one million users, Glass says, and in the past year, business has doubled from two million to four million. “Everything is accelerating, and because of that, restaurants are seeing greater benefits from engaging customers through this mobile channel.”
In addition to speed, accuracy is another key goal for quickserve chains looking to digital and mobile tools. Only about 20% of restaurant meals are eaten on site, and 80% are purchased at either the counter or the drive-through, according to NPD Group’s Harry Balzer.
Meanwhile, the best drive-through windows boast a 90% accuracy rate and many fall far short of that, says Glass, a problem with the potential to turn off customers who don’t find out they got the wrong thing until they get home. Trading squawky intercoms for mobile systems that send the order to the point-of-sale and then directly to the kitchen could go a long way toward ensuring accurate orders and fostering repeat business.
Chains may also be exploring ways to automate more functions as a hedge against higher labor costs, but few say they’re replacing humans with digital machines. Instead, fast-casual chains that have found success with mobile ordering systems use the tools to replace repetitious tasks like order taking and payment, freeing up the best workers to provide a positive interaction while delivering the food, Glass says.
“They do not do away with labor, but they shift hospitality toward food processing and hand-offs. The pickup counter is where the most hospitality is occurring,” he says.
Digital technology may be most visible in front of the house, but restaurants and other foodservice operations are also using new tech tools behind the scenes as part of the quest to improve speed and accuracy, says Technomic’s Chapman.
“Using a tool sometimes makes things simpler and using tech tools in the back of the house or in training or in scheduling or whatever a general manager has to do, allows them to then focus on the service. It can enhance the customer experience without the customer even knowing it.”
Technology on the Menu -- Fazoli's Introduces Catering on Smartphones with Olo Online and Mobile Ordering Platform →
Fazoli’s launches an enhanced online and mobile ordering platform, powered by Olo, which allows users to browse the full menu and use any mobile device or computer to place catering orders. The Olo platform allows users to pay for their order and saves favorite orders to make future ordering a snap.