12/29/2021
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Trend Report on Online Ordering: Digital Demands Present New Challenges, Opportunities for Restaurants

Digital ordering is here to stay. Here are what leading operators are doing to meet current – and anticipate – future digital demands.
Anna Wolfe
Senior Editor - Restaurants
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In the past two years, digital ordering has surged hand-in-hand with off-premises dining. And as 2022 nears, both remain in demand.

Our outlook is that online ordering will continue to grow,” says David Portalatin, the NPD Group’s food industry advisor and author of Eating Patterns in America, adding that future increases will be more tempered and “not triple-digit growth.”  For the year ending March 2021, restaurant digital orders grew a whopping +124% compared to prior year, according to the NPD Group’s foodservice market research, CREST

Portalatin breaks down how the market research firm defines online or digital ordering: orders for delivery and for pickup placed online or through a mobile device. It’s an important distinction: digital order for pickup is almost three times larger than ordering for delivery. ”Both are growing. It is a very sticky behavior,” Portalatin explains.

“Off prem is likely here to stay. All of our life is centered around homes and that too is likely to be sticky,” he says.

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Charles Gray from Paytronix

Executive Insight Q&A: Online Ordering Can Unlock a Personalized Customer Experience

“Customer experience is everything, which means when it comes to digital ordering, ease-of-use is just one issue. Mobile interfaces also must be inviting and personalized so that people have the same guest experience online as they do on-site.” —Charles Gray, Chief Revenue Officer, Paytronix READ MORE!

Cracking the Off-Prem Code

After orchestrating a strategic technology rollout, casual restaurant chain Another Broken Egg Café saw its off-prem sales skyrocket from 2 percent to 15 percent. At MURTEC Executive Summit and Showcase, Paul Macaluso, President & CEO of Another Broken Egg Café, took the stage to share the details on the brand’s impressive technology transformation.

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Another Broken Egg remodel

“Because of the shift we had to make to get into the business, both through third-party delivery, our own online ordering platform through Olo, as well as now getting into more catering, it's been a very incremental and significant part of our business  – up to 15 percent, and it's actually growing. It's been a huge shift for us. It's had implications on our technology, on our store design and obviously on our customers, but all in a very beneficial way for our business,” Macaluso explains.

When it comes to Another Broken Egg’s off-prem sales, 70 percent is third-party delivery and 30 percent is through its own online ordering portal for carryout orders. 

A New Look

The growing demand for off-prem dining has impacted operations and store designs across the industry. 

Smokey Bones is among the brands tweaking the in-store layout to better accommodate in-store pickups of digital orders. "In some of our up-and-coming prototypes, we are having a dedicated pickup area for off-premise orders as a way to corral some of the traffic and ultimately take it away from the area where people are waiting to be seated,” says CTO Brian Wallunas.

Noodles and Company is shifting some of the in-store traffic to pickup window. In line with industry forecasts, Noodles was anticipating a growing demand for off-premises dining and had already started adding pickup windows for digital orders before the pandemic.

“It has become a much larger portion of our business, but we were already on that path,” explains Corey Kline, EVP of Technology. “The role that digital ordering has played in our business the last 20 months is kind of what we expected to play.”

With some locations ringing up more than 20% of their sales for to-go orders, Another Broken Egg saw the need to streamline kitchen operations. “We actually have developed a new, separate kitchen display system just for to-go orders,” explains Macaluso. “We have a dedicated to-go station where those orders come in, and there's a new position called to-go specialist that every cafe has. All they do is process and package up all the off-premises orders.” 

Restaurants too are looking to add drive-thrus to streamline the digital order pickup experience. In November, Panera Bread opened the first bakery-cafe featuring its next-generation restaurant design that emphasizes off-premises. The Baldwin, Mo., location marks the debut of the double-lane drive-thru, with one lane specifically for the brand’s Rapid Pick-Up serviceChipotle is readying its first Chipotlane Digital Kitchen restaurant in Cuyahoga Falls, Ohio, that will feature a Chipotlane and walk-up window for efficient digital order pickup. 

Like Another Broken Egg, Smokey Bones invested heavily in its technology transformation. “Off-premises springboarded during the pandemic, and we see growth continuing not only for our core brand but also for our virtual brands” (The Wing Experience and The Burger Experience,) says Wallunas. 

"How can we take the infrastructure that we've already set up throughout the pandemic and monetize it better and optimize it further?”
Brian Wallunas, CTO, Smokey Bones

“As it relates to off-premises, it is how can we take the infrastructure that we've already set up throughout the pandemic and monetize it better and optimize it further,” Wallanus explained. 

For Another Broken Egg, Macaluso and his team see an opportunity in catering. The brand launched with EZCater on November 16. Early results are promising.  Most of the catering orders tend to be for early mornings Monday through Thursday, “which works out perfectly for our kind of demand cycles. Being a brunch brand, our weekends are super busy,” Macaluso explains.

Tech Initiatives

To help help improve service and personalization, Another Broken Egg’s is rolling out a new customer relationship management through Olo in January.  As HT previous reported, Olo struck a deal to buy Wisely, known for its CRM, in October.

“We've had a disparate system of information about our customers,” explains Macaluso. “We've got emails, we've got people that connect with us through social media. We've got people that have connected with us through the previous wait list management system, but none of those things were integrated and talking to each other. Now with the rollout Wisely, we're going to have all pieces of information integrated. We'll know if you've ordered from us online through Olo, if you've ordered through EZCater, if come into our cafe, if you've been on a wait list, if you've ordered a seasonal selection item, if you're more inclined to order alcohol or not…

“We're going to have a single source of truth on our customers once this is fully rolled out. And it's going help us also have more accurate wait times for people as they get on the wait list. In addition to some of the other benefits of Revel (including payments by QR code and servers using tablets to place orders tableside), it's going help us serve people more quickly and have quicker table turns and process more orders as well,” Macaluso says.

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smokey bones party

Data-Driven Personalization

In 2022, “first-party data and using that to drive more relevant and personalized campaigns is a big focus” for Smokey Bones, Wallunas says.

On the back end, its relationship with Personica will help Smokey Bones collect and leverage member, campaign, and transactional data across offers and customer engagement journeys to help the brand build guest relationships.

"This is just a big foray for us to get into first-party data and build this robust view of our customer, in terms of where they prefer to transact, whether on-premise or off- premise, understanding a bit more of their behavior, and what they like to purchase and then building and tailoring rewards around on that," says Wallunas.

[39% of restaurants say using data to understand guest preferences and behavior is driving their next POS upgrade, according to HT's 2022 POS Software Trends report]

Wishlist: A Consistent Omnichannel Ordering Experience

When it comes to online ordering, “I think there are practical features that still don't exist,” explains Clark Matthews, Vice President Information Technology at El Pollo Loco. “First and foremost, a vendor partnership that provides web and mobile applications that are unified and not dissimilar.”

Matthews would like to see a Web ordering experience that is as slick and robust as ordering via a mobile app. Unfortunately, he’s noticed a difference in UX when ordering on the Web, which is oftentimes an old application environment where loyalty is not clearly showcased. 

In general, there’s a need for vendors that provide “a 360-degree user-facing set of functionalities that feel and look the same,” Matthews says.

Matthews would like to see credit card processors and other providers work together to deliver functionalities, including Apple Pay and Google Pay, in a frictionless way to SMBs and their customers.

 

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“All of these things are kind of there in a piecemeal way, but none of them draw together for a true, beautiful user experience,” says Matthews. “Most consumers don't care so much about features. They care about the experience.” For example, if the guest prefers “no onions” on an online order, the system should be able to save those order preferences and warn consumers if products contain ingredients they don’t like.

Matthews is on the lookout for a solution that would enable a guest to scan an offer QR code or click a link in an email that would jumpstart a workflow process based on the offer to complete the order, simplifying the user experience. 

“One of the things that we believe passionately is necessary for us at this point, is bringing that tech together, making it more frictionless. If a customer chooses to use their phone with an app, or their phone via a web browser, or their computer via a web browser, or tablet via web browser, they shouldn't have to relearn how to interact with us in those environments,” says Matthews.

The Personalized Experience

Noodles too is looking to refine its digital ordering experience so that it aligns with guests’ individual needs. 

“We are very focused on the experience. It’s complicated; it is not the same for everyone,” says Kline. “What is meaningful to you is different for different people.  Some value the fact that they can customize their orders at, in every way. For some an elegant ordering experience means fast, like the fewest touches and the fewest CTAs … What we are trying to do is find a way to continue to service that whole spectrum, and it really comes down to personalization.” 

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a close up of a person holding food