Article originally appeared on Digital Brand Camp (http://dbrandcamp.squarespace.com/).
In the competition for a piece of the fast-growing $160 billion takeout market, online ordering can be a great benefit. A recent study by BIA/Kelsey found that 97% of customers used the Internet when researching local buying decisions. Online ordering lets restaurants “go where the customers are” at that critical point of online decision. It also helps operators overcome the operational challenges of managing takeout orders over the phone by avoiding busy signals, waiting on hold, noisy restaurant environments, and that terrible Catch 22 of either having to risk a no-show customer or take a credit card number over the phone and expose the customer to identity theft.
The numbers say it all. When comparing online orders to phone orders, operators report a 25% increase in average order size when customers order online. Moreover, operators report that 83% of their customers order more often when they make the switch from phone ordering to online ordering. When asked why, customers explain that online ordering is faster, easier, and more accurate.
Restaurant operators today have the luxury of choice when it comes to selecting an online ordering vendor. There are several talented and proven firms in the restaurant industry today. Common vendor requirements include: 1) integration with the point-of-sale system for easy order management; 2) integration into credit card and gift card systems for 100% prepaid ordering; 3) white-label branding to maintain the restaurant brand’s look and feel (see Five Guys’ online ordering website at www.gofiveguys.com); and 4) mobile ordering through text message, mobile web, and smartphone apps, such as Android and iPhone.
There is one new trend that operators should know about. Several online ordering vendors have started competing head-to-head with their restaurant clients. I call this practice “The Online Ordering Double Cross.” Here’s how it works: Your restaurant chain signs up with an online ordering vendor, assuming that the vendor will provide your chain with a white-label online ordering service. The vendor instead redirects your online customers to the vendor’s own consumer-facing website domain, where the vendor lists your restaurants alongside your competitors’. Two bad things happen if your customer visits this website domain in the future: 1) your customer is more likely to select a competitor’s restaurant instead of yours and 2) the vendor will likely charge you more if your customer actually does order from one of your restaurants.
To be clear, I am not suggesting that you should not list your online ordering menus on consumer-facing websites where local customers are deciding where to eat. Rather, I am calling out all those firms that represent themselves as white-label online ordering vendors for chains to stop systematically hijacking their clients’ rightful customers through The Online Ordering Double Cross. Putting an end to this shady practice would be good for restaurant chains, restaurant customers, and the restaurant industry as a whole.
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Noah Herbert Glass is the Founder & CEO of OLO Online Ordering (www.olo.com), the fastest-growing mobile and online ordering provider in the United States.
Article originally appeared on Digital Brand Camp (http://dbrandcamp.squarespace.com/).
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