To borrow a phrase from tech-savvy millennials, digital ordering “is everything.” According to NPD Canada, spending through the “digital door”— defined as any access to a restaurant through the Internet or a mobile device — is pegged at $1.4 billion annually, and it’s growing by 20 per cent a year.
Robert Carter, executive director, Foodservice, at NPD Canada, says a few factors are driving this phenomenal growth: the convenience that digital-ordering tools provide customers; the growing number of third-party online-delivery services such as UberEats and Just Eats; and the high mobile-penetration rate in Canada.
With these trends converging, digital ordering is becoming a must-have for foodservice operators across the industry. “It’s going to move from something that consumers want to something consumers expect…from all types of restaurants,” says Aaron Jourden, managing editor at Chicago-based Technomic. “So, it’s coming and [operators] will need to address it if they haven’t already.”
By all accounts, providing online- and mobile-ordering tools is a win-win for customers and foodservice establishments. Most importantly to operators, the digital door drives sales. According to NPD’s Crest data, customers who enter through a digital door spend more money: average eater checks for digital traffic are 54-per-cent higher than on-premise checks for regular traffic.
Domino’s Pizza Canada is one major chain delivering results from digital ordering. Today, more than half of the pizza chain’s orders are sourced through digital platforms. In 2016, the company’s online-ordering business growth was three times that of traditional ordering at the store level or over the phone. “Digital ordering continues to be the engine behind our growth,” says Jeffrey Kacmarek, vice-president of Marketing and New Product Development at Domino’s Pizza Canada.
Using Domino’s mobile apps, customers can develop a “pizza profile” that saves payments and personal info, create an “easy order” that they can place again and again, and use in-app credit or debit-card payments. Domino’s is also testing in-store digital kiosks at a handful of restaurants in Western Canada.
Domino’s continues to innovate in the tech space to make ordering easier. In the U.S., the pizza giant launched voice-activated ordering services on platforms such as Google Home and Amazon Echo, and has a voice-ordering feature on its mobile app. Kacmarek says Domino’s isn’t actively pursuing voice-activated ordering in Canada, but the chain did bring a new app here in April 2017: the zero-click app. Users simply open the app, and after a 10-second countdown, their “easy order” is automatically placed — no clicks required.
“With the development of our technology, it’s about making the ordering process that much simpler and convenient for our customer,” says Kacmarek. “We also know the satisfaction level of customers who order through digital means is much higher as well. The menu is there, it’s easy to see and offers are there.”
Similar to Domino’s, Etobicoke, Ont.-based Pizza Pizza sees more than 50 per cent of orders come through mobile or web-based platforms. The company’s mobile apps were designed with features that encourage repeat usage, such as in-app payments, a “favourite order” feature that allows one-click ordering and app-only specials.
Users can also add their Club 11-11 loyalty card to the app, earning five per cent in loyalty “dollars” back on every order, which can be redeemed after every fifth purchase. There’s also a “Scratch-and-Win” game that rewards users with a chance to win free menu items on their next order. These features “drive frequency, which in turn drives sales,” says Pat Finelli, CMO at Pizza Pizza. “With Club 11-11, if you know there’s money you’ve accumulated over the five orders, why would you want to order from a competitor or another QSR?”
For Pizza Pizza, innovating in the mobile space is about engaging younger consumers who are always on their phones. While Finelli says he still personally likes talking to order-takers on the phone, that’s not the way of millennials. “They don’t want to communicate, so they like to order online, whether they’re on their laptop, desktop, Android or iPhone,” he says. “This is how they behave and you have to be a part of that if you want to win them over.”
Jourden agrees that reaching younger guests is one of the main benefits to operators who provide digital-ordering tools. “You’re going to put your brand in front of them where they spend their time,” he says.
Another big benefit is the technology enables more “anytime dining,” adds Jourden. “We’re seeing some erosion of traditional dayparts and more meals being eaten at untraditional times. The ability to order food from the phone in your pocket and pick it up or have it delivered when you want, is assisting in that part of the industry’s transformation.” Milford, Conn.-based Subway Restaurants is making a major push into the digital arena. Last June, the sandwich chain created a new digital division in an effort to transform the customer experience. The company brought its marketing, technology, operations and strategy under one roof, to work on all aspects of technology and the guest experience. “Right now, we’re focusing on building a digital foundation and putting in an entirely new technology stack so we can really scale our digital efforts,” says Carman Wenkoff, Global chief Information officer and chief Digital officer at Subway Restaurants.
On the digital products side, Subway will soon roll out a new order-ahead app in the U.S., which will launch in Canada later this year. The company is also integrating a new loyalty program into the app later this year.
The app will feature new ways to order and interesting customization features, says Wenkoff. “Our team is focused on delivering a highly personalized experienced for each customer and that experience will improve more and more as the customer uses the app.” The app replaces Subway’s existing order-ahead app, which launched in the U.S. in 2015. Wenkoff says it will be a seamless transition for current users. “It will be an App Store update, but the update will look, feel and function very differently,” he says. To make sure the in-store pick-up experience is also seamless, the operations team has been at the design table since day one, says Wenkoff. “In our new restaurants that we’re designing, we will have separate pick-up areas. In our existing restaurants, you still pick it up at the point of sale, but we will have better signage to make it less awkward for customers.”
Indeed, operators have to give careful consideration to in-store execution. Earlier this year, it was reported that the popularity of Starbucks’ popular mobile order-and-pay option caused bottlenecks at pickup areas and caused some customers to leave without buying anything. In the fourth quarter, Starbucks partly attributed its disappointing sales results to the delays.
“When you look at restaurants 10 or 15 years ago, it was about opening up a place where you serve food and customers come in,” says Carter. Now, he adds, operators have to think about how they’re going to design their overall establishment to accommodate delivery and pick-up orders.
While providing digital ordering seems like a no-brainer, the technology may not be right for every restaurant. “You have to take a look at your overall brand positioning and what your brand stands for,” says Carter. “For a lot of brands it makes sense, and they can identify additional revenue. But, if you’ve built your concept on an experiential visit, is a digital-door strategy going to make sense? Probably not.”
Larger chains in particular need to understand how the digital door fits with the brand, adds Carter. However, smaller independents may need to jump right in. “In the environment we’re in today, where the marketplace is flat, they need to embrace this.” Calgary’s Ke Charcoal Grill & Sushi is just one of many independent restaurants that jumped on the digital-ordering bandwagon. Last November, the restaurant partnered with Calgary-based ClickDishes, a mobile app that enables customers to order meals from the app while they’re in the restaurant or order ahead for pickup, and pay in-app. Restaurant diners can even split the bill however they choose.
Terry Ke, owner and executive chef, says his customers (who skew younger) are always on their smartphones checking Facebook and Instagramming pictures in the restaurant, so it made sense to let them order their meals from their mobile devices. “It can also help save on wages and allows our servers to do a better job because they don’t need to ask all the customers what they’re ordering,” says Ke. “They can then focus on [other aspects] of service.”
What’s next for the digital-ordering space? Carter says the digital door will continue to be a major disruptor in terms of the types of business models that will evolve. In the future, “traditional restaurants will even build their spaces based on a delivery digital-door style,” he says.
In addition, as digital devices evolve and new technology emerges, restaurants will make it even easier for consumers to order through a digital format, says Carter. “We know at the end of the day, the easier you make it for consumers, the more they [will] respond.” For Subway’s Wenkoff, app and web ordering are just the beginning. “Anywhere our customers are spending time from a digital perspective, we want to make it easy for them to access our brand and have a great experience,” he says. “Ordering is more about multi-channel commerce and not specific to a branded app or web experience. It’s going to be everywhere…so any digital front door is a good door for us to be part of.”
Volume 50, Number 2
Written by Rebecca Harris
