Restaurant Mobile Order and Pay

by Raymond Pucci 0

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Why wait in line at your favorite quick service restaurant? It’s becoming more common for restaurants to offer mobile phone apps for their customers who are on the go and not wanting to queue up for their favorite food or beverage. As the following article relates, mobile ordering can vary among restaurants but convenience and speed are the name of the game.

Ordering a meal with a smartphone is becoming commonplace. Even fast-food companies are getting in on the action. But the technology varies widely — from simple systems that place the order immediately, no matter what time the customer would like to pick it up, to one app that uses a customer’s location to schedule food preparation. And restaurants admit that some customers are still wary about the freshness of their food when ordering ahead.

“I think some users assume (their food) would be sitting on that counter for them because that’s how most in the industry do it,” said Hunter Swartz, the founder and CEO of Chicago restaurant company Eastman Egg, who focused on a mobile app as a cornerstone of the firm’s development.

The Eastman Egg app tracks the customer’s location to match the completion of the order with the customer’s arrival. “As much as we had to educate the public about our food,” Swartz said, “there’s been just as much education about the app.”

Mobile ordering is becoming a critical piece of many restaurants’ plans because of what it can bring in improved sales. Customers spend more and visit more often, on average, when they’re using a phone to order their food.

The first restaurants to make mobile a big part of their business were the ones that rely heavily on delivery: pizza makers. At Domino’s, you can order just by texting an emoji of pizza or opening their app. Pizza Hut and Papa John’s have made big advances, too, and all three credit about half their sales to mobile orders.

Starbucks launched mobile pay through its app a year ago, and it now accounts for about 5 percent of sales, Chief Financial Officer Scott Maw said at a conference earlier this month. That jumps to 20 percent of transactions at peak times at several hundred of its urban stores. It expects that number to accelerate quickly in the near future, as customers get more comfortable with the technology. A quarter of Starbucks’ customer payments already are made with its smartphone app.

Coffee shops and pizza chains have been the earliest and most successful adopters of mobile order and pay. They thrive on a customer’s frequent buying behavior that takes place throughout the day. Not only do average sales increase, but shops find these mobile apps drive customer loyalty through expanded marketing programs. Mobile ordering also provides another buying channel and does wonders for store staff productivity as measured by orders and customers served per hour. Coffee drinkers and pizza lovers never had it so good.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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