Friday, 29th September, 2017

Online Ordering

With technology advancing, it is no wonder that more and more consumers are turning to the efficiency of online ordering systems when purchasing their favourite takeaway. According to market research firm Attest, the takeaway and delivery industry is in rude health with 55% of the UK population ordering their food over the internet. Online ordering is now a way of life, and consumers expect more. Therefore easy-to-use brand integrated ordering platforms are essential to ensure this consumer demand is met.

There are two clear routes for operators to take, as Annette Tarlton, Marketing Director of Star Micronics EMEA explains; “QSR owners have the choice of aligning themselves with a large marketing group such as Just Eat or Hungry House and paying the relevant commissions and /or creating their own on-line ordering service with obvious benefits.”

Ultimately, competition is increasing between QSRs, and the pressure to incorporate online ordering is hotting up. Earlier this year Domino’s revealed continued positive reception to the refresh of their online ordering platform with online sales amounting to 72% of their total orders last year. It came as part of a huge turnaround by the company as sales began to gradually slow due to increasingly intense competition from rival chains. The initial redesign and the subsequent focus on their online ordering technology, resulted in its full-year profit increasing by 17.1% last year - driven by the surge in online and mobile orders - as well as the opening of their 1000th UK outlet.

It may come as no surprise that according to a report released by the UK Cards Association, in 2016 the UK spent more online per household than in any other country, with card spend online totalling £154bn. With cash payments on the decline across most industries, keeping up with the demands of this ‘new wave’ of consumers - those who have grown up around payment and ordering technology and are much more comfortable with its development – is vital if operators intend to stay ahead in this competitive industry. Steven Rolfe, Managing Director of pointOne EPos says; “According to recent research by Morgan Stanley over 50% of QSR customers are millennials. This generation has boosted the hospitality industry over the last decade and made quick service outlets the fastest growing sector in the industry; and this trend is set to continue.”

“The ability to pre-order food on the web or use apps is not only desirable it is absolutely essential if a business wants to maintain a competitive edge. Furthermore, offering an online ordering ‘click and collect’ service to customers is a key way to enhance the customer experience and attract and retain business.” 

Contributors

Tejal Patel, Marketing & Communications Manager, 3R Telecom, Aziz Gunes, Commercial Director, 3SPOS, Steven Rolfe Managing Director, pointOne EPoS, Graeme Simpson, Managing Director, Butterware, Matt Graywood, Chief Operating Officer, Preoday, Olivia FitzGerald, Managing Director, Zonal Marketing Technologies, Annette Tarlton, Marketing Director, Star Micronics EMEA.

Why is online ordering essential for any food-to-go/QSR business?

“Businesses that don’t innovate will stagnate,” says Graeme Simpson, Managing Director of Butterware.

“Failure to keep up with the changing times is often an early sign that a business that will fail – and not just in the food industry. Look at Nokia, which was the industry leader in mobile phones in the 1990s, but has almost vanished following their failure to move into the smart phone market fast enough. In the US, Domino’s killed off many independent pizza delivery places when they introduced their online ordering solution. Not because the quality of the pizzas was any better, but simply that people preferred the ease of ordering online.”

 “Consumer expectations change and increasingly consumers are looking for time-saving solutions, faster and better service and more personalisation. Online ordering offers these things – either by saving time queuing and paying, getting the lunch delivery they want when they want it, more knowledge of the customer’s favourites, easier to personalise offers and discounts, and easier to reward loyalty.”

 “Food businesses who want to maintain or grow their business will find it increasingly hard to avoid going online as more and more customers demand it,” concludes Graeme.

Tejal Patel, Marketing & Communications Manager, 3R Telecom, adds “For businesses online ordering is essential as it saves times and will also reach a wide range of customers.”

“Online ordering is also much more accurate and crucially a much more analytical way of going ahead. As well as having the added bonus of being easy to maintain.”

“McKinsey & Co expects online ordering (and delivery) to grow by 25 percent per year from 2015 to 2018 in key markets, comprising almost half of the overall delivery market by 2018,” says Matt Graywood, Chief Operating Officer of Preoday.

“From a business’ perspective, online ordering and delivery brings a host of benefits. Fundamentally, it helps increase revenue, streamline operations and lay the foundations for better marketing and loyalty. From an operational perspective, it reduces the potential for errors as a result of a communication mix-ups; it minimises payment issues and is proven to result in larger order values. In fact, we’ve found that the streamlined order flow, along with up-selling and cross-selling offers, can tempt customers to spend up to 40% more.”

“Moreover, we see it as the catalyst for business transformation - the data from online orders helps businesses get to know their customers better, meaning they can grow faster. For customers, of course, it’s one of the easiest ways to order food and drink.”

The fact that we are a cash rich, time poor society, wedded to our smart phones means that online ordering is no longer seen as a luxury, according to Olivia FitzGerald, Managing Director of Zonal Marketing Technologies. She explains; “According to OnePoll, 42% of people are likely to use some form of technological innovation while dining or drinking out. They have quickly become mainstream and it’s a trend that is only set to grow.”

“In under two years the number of consumers who use mobile devices to speed up payment has increased from 2.4 million to 3.1 million. The same research also highlights that 67% would spend more cash if they could order from their mobile device, with 80% happy to pay via their smart phone using recognisable and trustworthy brands such as PayPal, Barclaycard and ApplePay.”

“For operators, it’s not simply a question of whether they should introduce online ordering, but when and what the best tool is for them to use. There are many options available for pre-order services, however, they are of little use if they’re not talking to your other systems, especially EPoS - an integrated app offers operational simplicity for staff, plugging into live pricing, promotions and stock availability data.”

Increasing competition from restaurants entering the delivery market by utilising the managed delivery services of company’s such as Deliveroo and UberEats is why incorporating online ordering is essential explains Aziz Gunes, Commercial Director, 3SPOS. “Having an online ordering system can streamline your order taking process, reducing costs by not paying commission to aggregators and capturing valuable customer data for your own marketing to increase sales.”

“Ultimately, if you offer your own delivery services, a good online ordering system can help you save costs, reduce errors from orders over the telephone and increase customer satisfaction with a faster order taking process.”

What service providers are there in the market and what do they offer by way of support for businesses?  

“We believe that in order to fully benefit from online ordering the technology, the service provider has to enable restaurants to integrate this offering into their wider PoS set-up,” explains Steven.

“For example, we have developed a solution that includes browser-based ordering, iPhone and Android Apps and in-store order points such as kiosks.  For operators that choose to offer a ‘click and deliver’ service then adopting a driver management solution would also be useful to manage deliveries to the customer.”

Directly linking online ordering systems with both EPoS and Kitchen Management Systems is vital explains Aziz. “An integrated system can streamline
collection/delivery orders, reduce equipment costs and increase profits. We provide a link that our customers can embed on their website which allows them to offer a branded checkout experience.

“Our online ordering systems help QSR businesses manage their collection/delivery orders directly from their EPoS system without the need of extra hardware or software, offer customisable delivery and collection rules to match their business requirements.”

“QSR owners must look at the choices available and decide the route they want to take,” adds Annette. “The temptation to sign up to ‘all’ services is very strong and it will be interesting to see how this market area levels out over the next couple of years.The key disadvantage to this will be that the QSR will have to find space for all the different kitchen printers which could reach ridiculous proportions using up valuable kitchen or bar counter space.”

“Trust is a big consideration for consumers who are becoming increasingly savvy when it comes to sharing their data,” explains Olivia. “Our research has found that almost a quarter of 18 to 34 year olds cite lack of trust as their biggest barrier to engaging with a brand.”

“But where trust is gained, 72% are ready to engage with and share their data in return for instant offers. This can only be achieved if you have total control over your app and don’t outsource to a third party, who can use your valuable customer data to meet their own business ambitions.”

“For those operators who have embraced the change and adopted online ordering through app technology, they are reaping the rewards as sales increase and revenues jump, while improving the customer experience and winning their loyalty.”

What equipment do you need to have to ensure your online ordering system is effective?

“The great thing about technology today is that you don’t need to invest in a lot of kit to get started,” says Matt. “At its most simple, a business just needs an internet-connected device like a tablet, or even a phone to manage delivery orders, and a cloud software service. For larger operations, a good delivery software will be able to integrate with existing EPoS tills or other order management systems.”

“Importantly, you need to invest the time to set up the system and make sure it’s working for you and your business,” adds Graeme. “You will also need to promote your new service, both online and offline, which may involve spending money on flyers and good design or learning how to use social media tools. Just setting up the online ordering system isn’t enough if you really want it to work for your business.”

“The days of the old-fashioned electronic till are over,” says Steven. “Operators who are serious about implementing a successful solution need to base this offering around a platform that can integrate real time online ordering technology into their EPoS technology. This could be in the form of a web page, an app or an in-house order point/kiosk.”

“As it is web-based no physical hardware is required, other than your EPoS set-up. However if you are going to provide an online ordering service to your customers then you should also consider that they will expect to be able to order online via an iPhone or Android App.

Other options for QSRs come in the guise of software houses such as Emperium EPoS and Takeaway Genie, explains Annette; “They will create an e-commerce site based on the menu provided and will then recommend for example the low-cost TSP654II HI X Cloud based printer for kitchen orders from Star Micronics at a low monthly cost. This type of solution is commission free however it is up to the QSR to promote the site.”

If you don’t currently offer online ordering, how do you start?

“Not all EPoS systems are the same, and many do not offer the complete solution that is dedicated to providing the tools needed for a successful QSR/Takeaway business,” says Steven.

“Operators need to review the options out there and look for a provider that offers this and other web-based ordering technologies that are fully integrated with an Enterprise level EPoS system designed specifically for the QSR space. The provider must also be a company committed to on-going development focused on this sector.”

Matt adds; “If you decide to work with a platform provider, you can have the service up and running in the space of a few days. You would explain your requirements for the platform to the vendor, provide all of your branding and be available for a training session once everything is ready. If you’re launching a mobile app as well as website ordering, you can start to market it to your customers as soon as the app has been submitted and accepted by the Google Play or App Store.”

“No matter the route you choose, make sure your decision is backed up by research; does the vendor you’re considering have reputable business partners, which other clients are already on its roster?  Equally important is reading the terms and conditions of any contracts closely. Will you be charged commission (many aggregators charge commission per order), how long does the contract last and will you have access to your customer data?”

“Industry publications are a good place to start to do your research, or you can research online,” says Graeme. “Make sure you look at a few different options to understand what’s right for your business.”

“A good company should be able to provide you with case studies or enable you to speak to other companies that use that solution. You’ll need to understand the pros and cons and what level of support you can expect from the company.”

What future developments can we expect in regards to online ordering?

“The market is still young so I think we’ll see more solutions coming to market in the next few years and online ordering becoming more standard,” begins Graeme. “In terms of technology, I’d expect to see increased integration and automation, for example a software that anticipates your arrival time to collect based on your location, traffic or walking time. Or increased use of individual information to offer higher service standards and more personalisation. We may even see drone deliveries of food!”

With cashless operations currently shaping trends in the QSR sector and with payment methods such as Apple Pay and Android Pay now the preferred method of payment for low value transactions. Steven suspect’s operators will accommodate these changes by altering the way they manage their business, by introducing new methods of customer service, including self-service and cashless kiosks. Adding; “This technology complements online ordering by extending click and collect to an in-store option and is already proving very popular with customers.

Annette predicts that the traditional QSR will sign up to various services as well as creating plans for their own e-commerce site. Explaining; “We will see this particular market segment mature over the next 12 months, making the choices easier than they are at present. Just like any business decision, the QSR’s final choice of solution requires investigation and research to match their particular requirements.”

“But I do anticipate a rebellion against the large variety of equipment needed for each solution with QSR’s deciding on which printer they want to use and insisting that the solution providers offer a more common hardware solution.”

Matt concludes; “It sounds cliché, but the future really is bright. Home delivery and online ordering is already becoming more accessible and affordable for businesses of all sizes. While services like Deliveroo and UberEats charge high commission fees, there are now other options available under different, more attractive pricing models. This will serve to grow restaurants’ new found revenue streams further.”

“Social technology integrations are in their infancy will be more commonplace by the end of the decade. At the moment the success of companies taking orders through Facebook or Alexa is limited but in five years we would expect these, and others, to be prevalent. All new trends will be driven by the consumer demand for convenience, so online ordering must continue to evolve to meet their needs.”

Biffa