Waiting in line or making a phone call to order food from a restaurant may soon be a relic of the past, as the increased availability of digital ordering enables more consumers to get the food they want, when they want it, with just a few scrolls, taps and clicks.
It’s a trend that’s proving beneficial for time-crunched consumers, and even better for the restaurant industry, executives at market research firm The NPD Group said.
“Digital ordering is growing by double digits in a market that’s not growing at all,” NPD analyst Bonnie Riggs said.
According to the most recent NPD research, digital ordering accounts for 3 percent of total restaurant traffic, or about 1.9 billion visits. NPD defines digital ordering as placing an order via the Internet or a mobile app for either delivery or pick-up.
The availability of digital ordering is still highly concentrated among a few major chains, especially pizza concepts, but Riggs said the opportunity for growth is huge.
“It’s probably going to be chain-dominated, but they are all going to have to do it,” Riggs said. “If you don’t have it, [consumers] are going to go some place else they can use it.”
Dinner is the meal most often ordered digitally, and families are the heaviest users of digital ordering, NPD found. Fifty percent of digital orders come at dinner time, and 35 percent of digital ordering includes parties with kids.
People under age 35, African-American consumers and those with higher household incomes are among above-average users of digital ordering.
No matter the consumer, deals play an important role in digital ordering, NPD found. When consumers order digitally, they are twice as likely to order on a deal, and that deal is usually a coupon. Twenty-nine percent of all digital orders used a coupon. Other top deals used were discounted price, daily special and combined item special.
Additionally, NPD found that the ability to pay with mobile boosts customer satisfaction scores and encourages guests to visit for reasons related to loyalty.
While more consumers are still placing orders using websites, orders placed with a mobile app are growing more strongly, NPD found.
“It really is all about the mobile app,” Riggs said. “You have to have a mobile app if you’re going to play in this sandbox.”
Tapping the app
While digital ordering is dominated by pizza chains, better-for-you fast-casual concepts are also tapping into the power of digital ordering, especially mobile apps. Executives from Santa Ana, Calif.-based Nekter Juice Bar and San Ramon, Calif.-based Vitality Bowls share how their brands have benefited from digital ordering.
Nekter Juice Bar
When you make nearly everything on your menu — from green juices, to smoothies, to acai bowls — fresh to order, there’s often a delay from ordering to eating. To help reduce wait times, Nekter Juice Bar launched a mobile ordering app last January.
“For us, it’s been huge,” said Steve Schulze, Nekter president and CEO. “It’s growing each week, each period, exponentially.”
In its first month, mobile ordering generated about $15,000 in sales for the 70-unit fast-casual chain. To date, mobile orders account for more than $400,000 in sales, and the chain expects to reach $500,000 in mobile sales by March 2017.
Digital ordering has also increased visit frequency and provided a 9-percent lift in average ticket, Schulze said. Predictive ordering has also helped the chain manage labor needs more efficiently.
“We’re seeing more business because it’s more convenient,” Schulze said. “We’re just scratching the surface on mobile ordering.”
Getting into mobile required a significant initial financial commitment, but Schulze said it was worth it, and that the app has very quickly paid for itself.
Similarly, the launch of digital ordering online and via mobile app two years ago has proven, like the food this 40-unit, fast-casual chain serves, to be a healthy choice. Digital ordering now generates about 30 percent of the chain’s daily sales.
“It’s a tremendous opportunity to find ways to engage with customers and drive orders,” said Uriah Blum, Vitality Bowl vice president of operations.
But the benefits go far beyond increased sales.
“It helps us provide a better customer experience by decreasing wait times,” said Blum, noting that many of the chain’s menu items are made fresh to order.
Additionally, Blum said the chain has reduced labor costs, as there is no longer a need to have an employee take phone orders. It has also reduced the number of customers who are unsatisfied with long wait times.
To better serve and communicate with customers, the chain recently revamped both the app and its online user interface, and said it plans to continue to improve its digital capabilities, eventually adding text messaging and push notifications.
“We are going to keep evolving, keep finding new ways to drive new business,” Blum said.