Why Top Restaurants are Doubling Down on Mobile Ordering Apps
by JAMES HSU
Many restaurant businesses have been hit hard by the COVID-19 pandemic, as government-mandated closures and operating guidelines have closed dine-in operations at many restaurants. Compounding the challenges, many consumers are doing their part by staying “safer at home”—even when the dinner bell rings.
However, one segment of the restaurant industry that has found a silver lining in the overall bleakness are quick-service restaurants, which are naturally well-positioned for takeout, drive-thru, or delivery-centric operations. What are brands like McDonald’s, Domino’s, Starbucks, and Burger King doing to, one, mitigate the damage/fallout now, and two, position themselves for a strong recovery once the economy reopens?
Here are some of the most common practices:
- Sanitization protocols and plexiglass barriers to protect staff and guests, curbside pickup, contactless delivery
- Prioritizing drive-thru throughput with extra staff (including staff standing in the drive-thru order), more drive-thru lanes, and faster payment collection processes
- Menu optimization (toward takeout/delivery-friendly items)
- Menu simplification to make it easier on smaller kitchen crews
- Closing or suspending operations in hard-hit locations (e.g.: located in airport terminals or Walmart stores)
- And perhaps the most impactful: improving or adding mobile ordering options
Even before the pandemic, mobile ordering was a major priority for quick-serves that recognized letting customers place their own orders before leaving home could substantially increase operational throughput. With the pandemic and public safety concerns in play, mobile ordering has taken on new importance.Why Mobile Ordering?
Mobile ordering apps are especially beneficial for quick-serves that stand to benefit in the following ways:
- Mobile ordering can bring in more customers (namely, those that value the convenience and speed these apps provide)<\li>
- Ordering ahead via mobile app reduces bottlenecks in the drive-thru lane or at the counter (because ordering can take a long time), allowing greater throughput.
- During a pandemic, with most on-premises customers coming through a single drive-thru lane, ordering ahead can really speed things up.
- Mobile ordering reduces bottlenecks in the kitchen, as orders are typically received well in advance of customer pickup, giving staff time to prep and fulfill orders without holding up the entire operation (over a batch of fries that didn’t make it into the frier, for example).
- Mobile ordering reduces the need for face-to-face conversations between staff and customers, keeping everyone safer during the pandemic. Offering contactless delivery or curbside pickup can offer additional benefits here.
- Mobile ordering apps can encourage customers to order more frequently and/or try new menu items, with features such as loyalty/rewards programs, push notifications, and gamification elements such as achievements, leveling-up, and more.
When it comes to mobile ordering, there are several ways quick-service brands can approach this critical capability. I’ll discuss each approach and then explain how they can actually synergize with each other.Food Aggregators: A Transactional Approach to Mobile Ordering
Aggregators like Uber Eats, DoorDash, Postmates, and GrubHub are an obvious mobile ordering option that many brands will at least explore.
Aggregators can expose first-time customers to your restaurant, which can be critical to your overall growth plans.
Aggregators offer convenient meal delivery (and sometimes pickup options) for a wide variety of restaurants within a single app. DoorDash, the market leader (representing 46 percent of meal delivery sales in July 2020), provides mobile ordering for “more than 300,000 local and national favorites across the U.S. and Canada.
Most aggregators have already integrated pandemic-friendly contactless delivery or “leave at door” options, which are greatly valued during this time.
Yet, because these platforms are aggregators, any play a quick-service restaurant gets on them is largely transactional. In other words, many customers who use aggregators are not looking to “build a relationship” with one or even just a handful of restaurants. They may order from your restaurant only once and continue on sampling the smorgasbord of other restaurants also listed.
Want to stand out from your competitors, who are similarly hawking their own fine alternatives above and below you on each screen of the app? Good luck doing that in an aggregator; instead, count it a blessing if users even notice your tiny restaurant listing.
Want to make your menu sing with stunning visuals, videos, and custom content? With meal aggregators, you’ll need to settle instead for the same menu template everyone else has.
The same goes for loyalty/rewards features; it’s simply not possible (or even practical) to deploy these on meal aggregators for your restaurant, specifically. Understandably, these apps use points and rewards to reward loyalty toward the aggregator (DoorDash, for example), not to your restaurant.
Finally, selling meals on aggregators is expensive. Many of the meal aggregators charge commission fees that can be as high as 30 percent of the order total, and that’s before any tips or hefty service fees your customers might be on the hook for. Even pickup orders on aggregators like Uber Eats require restaurants to pay a commission fee for the transaction, eating into already thin profit margins. In the relatively low-margin business many restaurants find themselves in, every fractional percentage point of margin given to a middle man absolutely matters—which brings us to the next solution.Proprietary Mobile Ordering App: Ideal for Repeat Customers & Profitability
Creating a proprietary mobile ordering app (like the McDonalds and Starbucks apps) is a popular solution for established or fast-growing quick-serves and can elevate a brand out of the transactional (and profit-killing) meal aggregator game.Building a dedicated app offers many advantages:
- Stop paying a middle-man for every order (i.e.: the aggregator), and/or reduce the fee structure for delivery/pickup orders
- Create the branded and personalized experience your loyal customers (and marketing team) desire
- Provide a competition-free ordering experience for your customers
- Build your menu and customization options the exact way you want
- Allow the flexibility to build in loyalty/rewards programs and gamification features
- Customize push notifications to increase share-of-wallet and order frequency
It can clearly be advantageous for restaurants to offer their regular customers a dedicated mobile ordering app. But for many restaurant businesses, the notion of designing and developing a mobile app (on iOS and Android, no less) can seem daunting. After all, quick-serves are experts at creating fast and delicious meals—not building mobile apps. To fill this common technology gap among restaurants, software development companies partner with restaurant businesses to design and develop complete mobile ordering apps for restaurant businesses, along with the requisite POS (point-of-sale), delivery/logistics, and other backend integration work. Working with an experienced agency can reduce development costs, turnaround times, and project risk—making it possible for even smaller brands to bring their apps to market quickly and affordably.
Best of Both Worlds: Using Aggregators to Attract New Customers and Operating a Dedicated App for Returning Customers
It’s important to understand that listing your restaurants on meal aggregators and creating your own proprietary mobile ordering app are not mutually exclusive propositions.
While you may certainly find value in adding order volumes or new customers by making your restaurants available on meal aggregators, the ultimate QSR mobile ordering ecosystem inevitably entails a dedicated mobile ordering app for your regular customers.
Not only will a dedicated app provide a more focused and comprehensive restaurant experience for your returning customers, but it will also allow your company to drastically improve profitability from digital ordering, through and beyond the current pandemic.