The number one thing customers want with their takeout isn’t a side of fries. It’s convenience.
A recent study on the rise of online ordering systems revealed that 51% of Americans use delivery services to purchase meals, and 26% order at least once a week.
Research by the National Restaurant Association shows that for nearly one-third of all adults and 41% of people aged 18 to 34, the availability of technology options is an important factor when choosing restaurants.
In an era of right now or never, customers have come to expect that food delivery be effortless, available at all hours, and at their fingertips. The online ordering business overall was worth $5 billion for the first two quarters of 2018 alone, a 55% increase from the same period in 2017. Customers are spending more money on takeout more often than ever before.
For the majority of restaurants, online ordering is now a must-have. An online ordering system can help streamline this new takeout process, helping you cash in on the opportunity for increased traffic and revenue.
But because we know getting started involves a lot of operational overhaul, we’re ready to help you break it down.
In this article, we’ll cover everything you need to know about preparing for and working with an online ordering system, including:
- What is online ordering?
- Three different ways to do online ordering
- Top three benefits of third-party apps
- The fee structure of third-party online ordering systems
- Four steps to prepare for restaurant ordering system software
What Is Online Ordering?
Online ordering for restaurants is the option for customers to place a takeout food and/or beverage order through a restaurant’s website, app, or third-party app, either on a mobile device or desktop – often with delivery included.
An online ordering system collects all the necessary information about the order (customer info, items, payment) and allows a restaurant to receive and process these orders – either directly or indirectly – through their POS.
There are three main types of online ordering systems restaurants can use.
1. Your Own Website
An online ordering system that lives on your website allows customers to order takeout from you directly, which means you keep all the revenue. But you also get all the work.
You have to set up your website, which means building your own interactive online menu, integrating payments (eliminating the financial risks of placed orders that never show), and organizing delivery (adding labor costs and assuming additional insurance risks).
There are third-party organizations that can help you build an online ordering website from scratch or add a section onto your existing site – like OrderDirect, MenuDrive, ChowNow, and even Wix – which often have flat monthly fees.
With this option, someone within your restaurant needs to monitor your online orders closely, paying attention to your POS inventory and/or communicating with the kitchen to make sure items are taken down when they’re no longer available – or you’ll end up needing to contact the customer directly to offer an alternative item or refund. Not a fun call to make.
But the biggest consideration with this type of online ordering is audience. Odds are, your diners are ordering from other mobile apps already, so they won’t be looking to your website to place an order. This means the in-house website route may not give you the volume you need to justify the investment of time and money required to set up and run everything.
Main takeaway: Online ordering through your own website grants convenience to existing customers, but you won’t bring in a lot of new ones.
2. Third-Party Online Ordering App
Third-party online ordering apps, like Uber Eats and Grubhub, house an extensive list of restaurants, sorted by location and food type, so that customers can browse and order from individual menus on their phone or desktop.
A virtual food hall, a third-party app gets you in front of hungry customers in your area who are ready to buy.
While some of these apps focus on order-ahead takeout that customers pick up, many also offer independent contractors to deliver food from your restaurant directly to the customer, which means you don’t have to hire, train, and pay for that labor.
So how do they work in your restaurant?
- A staff member monitors orders that come in through the third-party app iPad or tablet.
- They accept or decline the order.
- Then they manually add the order to the restaurant’s own POS.
- Many restaurants in busy, urban areas work with multiple third-party apps, so this staff member might manage multiple tablets
- They also deal with the independent delivery drivers, communicating with the kitchen to get an order ready and out the door with the correct person.
The biggest consideration here is cost, since most third-party apps charge restaurants on a per transaction basis. The increased exposure – and therefore traffic – has to be at a high enough volume to offset the cost, which we’ll talk about more below.
Main takeaway: Your customers (existing and new) get convenience, and you get new traffic plus increased takeout revenue – but you have to give another company a piece of the pie.
3. Third-Party Online Ordering System with POS Integration
A third-party online ordering app with POS integration, such as Checkmate, is a centralization of all the third-party apps you use in one location: your POS.
Essentially, Checkmate acts as a bridge between your third-party online ordering platform and your POS. The integration takes the third party orders and streamlines them directly into your POS, so you don’t have to manage more than one system or manually enter orders – a big help for your operation efficiency, seeing as 5% of all manually entered orders contain at least one error. That could end up costing you $4,000 per year in lost revenue!*
*Based on TouchBistro’s estimate of a restaurant’s average annual online ordering revenue.
So how do they work in your restaurant?
- Customers order from your restaurant using the third-party online ordering app of their choice.
- Because the two systems – third-party app and your POS – can talk to each other, your takeout staff doesn’t have to stress over orders getting lost or entered incorrectly.
- Staff acknowledge the order directly on your POS.
- Staff don’t have to stay glued to third party tablets – they get to engage in other tasks, like boosting sales and making sure customers are getting a great experience.
- You can measure how each of your online ordering platforms is performing through your POS reporting, together in one single view (without a POS integration, you have to view each platform’s separate reports).
- You’re able to make informed decisions about which platforms are best for your restaurant.
This POS integration creates an online ordering system for businesses that are ready to scale this revenue stream, making the most of all available platforms.
Again, the biggest consideration here is cost, because you’ll have per transaction fees from both the third-party app and integration app. It’s important to consider what your takeout volume is – or has the potential to be – when looking into this option. Third-party online ordering with POS integration is ideal for restaurants that anticipate high volumes of orders from one or multiple apps.
Main takeaway: You and your customers get convenient online ordering that’s easy and streamlined on both sides of the transaction – but at a slightly higher cost. But if you have the volume, the convenience points are worth it.
The Importance of Online Ordering Systems: Top 3 Benefits of Third-Party Online Ordering Systems
Before we get into the nitty gritty of what a third-party online ordering system will cost you (it’s not all about the money, money), let’s start with what this system will bring you:
- More customers
- More sales
- More efficient ordering
- A better customer experience
What does that add up to for your restaurant? Incremental revenue – revenue earned by increasing production.
Translation? You make more money.
Okay, maybe it is all about the Benjamins.
More customers: Stop chasing after more traffic for your restaurant – third-party apps bring the traffic to you. The State of Full Service Restaurants in 2019 report found that FSRs that implemented online ordering saw an impressive 11 to 20% increase in sales. Plus, a recent study by Grubhub found that, on average, restaurants using their online ordering service grew their revenue by 30%. One in five doubled their takeout revenue.
More sales: Because people tend to order more when using a self-serve ordering system – both with kiosks and third-party apps – your average check size for takeout orders will likely increase. Our annual report also found that customers spend up to 20% more on online orders – due to both more add-ons and more menu items per check. A higher volume of orders and more sales per order.
More efficient ordering: Nobody wants to pick up the phone to place a takeout order anymore. With a third-party app, you get the detailed order and customer information instantly.
Better customer experience: Third-party apps give customers the ability to order when and where they want to, without any communications issues that can happen on a call. Apps make it easy to customize and pay for an order, no matter how long or complicated. The customer gets a digital receipt for their custom order and the ability to track their delivery or pick-up time.
Third-Party Online Ordering System Cost
Since cost is a major factor to consider for any third-party online ordering system, let’s take a look at the fee structure for these apps to help you navigate the costs.
Most of these third-party apps work on a three-tiered fee structure.
1. Set-up: This is usually a one-time fee to get everything up and running on the map, add your online menu to the app, and includes the hardware and software to your restaurant.
2. Transaction: Most apps charge a per transaction fee, usually a percentage of each order or of net online sales made through the app. The fees are different depending on your restaurant’s area, with busier areas typically having higher fees. Some apps charge a flat monthly fee, but it’s not as common.
Range: 10%–40% of each transaction; some have flat monthly fees
3. Marketing: On top of your listing as a local restaurant on the app, you can also get in-app marketing services, like priority placement, promoted listings, and featured offerings that make it easier and/or more appealing for customers to choose your restaurant. These services are optional, best for restaurants looking to really ramp up takeout volume.
Range: These fees vary widely, depending on the third-party app and the marketing service.
4 Steps to Prepare Your Restaurant for Ordering System Software
If you’re new to online ordering, the process can seem overwhelming. We’re here to break down the steps you need to take to set yourself up for success with this new source of incremental revenue.
1. Popularity Contest: Know the Top Third-Party Apps in Your Area
You’ll want to think about more than just price when you’re choosing an online ordering system/third-party app. First you need to know which ones are the most popular in your area.
And every area is different.
Restaurant Business studied the five most popular third-party apps – Grubhub, Uber Eats, DoorDash, Eat24, and Postmates – and broke down their share of each market for some of the biggest cities across the U.S.
Popular online ordering apps in New York
Uber Eats: 8.2%
Popular online ordering apps in L.A.
Uber Eats: 15.9%
Popular online ordering apps in Chicago
Uber Eats: 18.0%
Popular online ordering apps in Boston
Uber Eats: 14.5%
Popular online ordering apps in Washington D.C.
Uber Eats: 31.7%
Popular online ordering apps in Dallas
Uber Eats: 47.9%
Popular online ordering apps in San Francisco
Uber Eats: 18.3%
Depending on where your restaurant is – and therefore which app or apps people are using the most – you may only need to focus on one to capture the majority of the market (like in New York where Grubhub claims more than 85% of the market) and a high volume of orders. Or, you may need three or four to get the volume increase you need (like in LA, where the market share is pretty evenly spread).
That’s why it’s important to do your homework: research online and investigate each third-party app to see how many customers are using it in your area. Use that information to determine the best way to capture as much of this audience as possible.
Full Service Restaurant Looking for Online Ordering Trends?
In The State of Full Service Restaurants in 2019, we looked at which online ordering platforms are used most commonly by full service restaurants (FSRs) in some of the biggest cities in the U.S. Our report findings echo the larger consumer trends discussed above.
FSRs That Use Online Ordering Platforms in New York City
Uber Eats: 45%
Own Website: 30%
FSRs That Use Online Ordering Platforms in L.A.
Uber Eats: 47%
Own Website: 32%
FSRs That Use Online Ordering Platforms in Chicago
Uber Eats: 45%
Own Website: 33%
FSRs That Use Online Ordering Platforms in Miami
Uber Eats: 59%
Own Website: 41%
FSRs That Use Online Ordering Platforms in Austin
Uber Eats: 48%
Own Website: 28%
2. All Aboard! Prepare Your Staff for the New Workflow
Once you’ve completed your research and chosen your third-party app(s), you’ll need to inform and train your staff for the coming changes – to their roles, to the influx of new customers, and for all those glowing reviews that are bound to come pouring in.
Front of house
Step 1: Get strategic about your restaurant flow
Decide how you want customers to move through your restaurant, knowing you’ll have a lot more takeout traffic. Train your front-of-house staff to manage this flow, checking in with customers and on the status of their orders.
Step 2: Create a designated takeout area
Help your staff manage the flow of traffic by designating a specific waiting area for customers and delivery drivers who are picking up. The waiting area should be away from your restaurant’s main flow of traffic, to avoid any bottlenecks during your busiest times.
Step 3: Add signage to direct customers
Put up clear, visible signage that helps customers and delivery drivers easily find the waiting area, instead of ending up in the wrong line.
Step 4: Create a new takeout job description
Carve out a new role at your restaurant for takeout orders, so at least one person per shift is dedicated to entering orders from third-party apps into your POS. (If you’ve opted for an online ordering integration that streamlines orders directly into your POS, this staff member may be able to take on other responsibilities as well).
Look for someone with a keen eye for detail. They have to pay close attention to the incoming orders and double, triple, quadruple check that it’s entered correctly.
They also have to be fast and efficient. On average, it takes about one to two minutes to manually type in an order. The faster these orders are entered (without mistakes), the faster the kitchen can start making them, and the faster they get to the customer. And fast, convenient service will get you happy customers and more sales.
Step 5: Assign additional tasks
Train your takeout specialist for tasks beyond monitoring and manually entering orders, such as coordinating with delivery drivers and communicating with the kitchen on order times and 86’d items.
If you track inventory using your POS, items will automatically get 86’d in your system when you’re out of stock. But make sure your staff know to update the third-party apps with this info, so customers can only order what’s in stock.
Step 6: Develop a “declined order” process
Put a “declined order” process in place for staff to follow, so they know what to do if an out-of-stock order from a third-party app comes in before they’re able to 86 it. They’ll be able to “decline” the order easily on the third-party tablet, so the customer won’t be charged, but you’ll also want to send a message through the app with an apology and some effort to make up for the inconvenience: a comparable item, a rain check, a special offer, etc.
Back of house
Training for back-of-house staff will be less focused on different roles and workflows, and more focused on the increased workload.
Online ordering will definitely boost the number of orders your back of house needs to prepare. But what kind of volume increase are you looking at? Every restaurant will be different.
Step 1: Optimize your current kitchen staff
Before you jump into hiring more cooks, maximize the efforts of your current staff. Prior to launch, look for ways to be as efficient as possible in the kitchen: optimize your layout, prep takeout packaging, time orders to maintain consistency, etc.
Step 2: Set up a trial period
Use the first few weeks of online ordering as your trial period for back of house, which will help you determine who you need to hire and for what role. The rate of sales growth will also help you predict future hiring needs.
Step 3: Monitor workload during your trial period
Monitor online sales during this trial period and its impact on your kitchen staff, taking advantage of on-the-go reporting apps that keep you on top of what’s happening from wherever you are. Also talk to staff and get their feedback on any backlogs or issues that are occurring during specific hours of operation. They’re your eyes and ears on the ground – so use ‘em!
Step 4: Determine your hiring needs
If you do need to hire, consider starting with an expediting role, someone dedicated to organizing and prioritizing online orders, as well as communicating with their front-of-house counterpart.
3. The Menu Is the Message: Optimize Your Menu for Online Ordering
Optimizing your menu for this online format is a super important step. Why? You already have a menu, right?
Not this kind of menu.
An online menu will not only be read differently than your printed version, customers will also interact with it differently. It has to be designed for easy navigation and upselling.
We suggest building one menu specifically for online ordering, concentrating on the following aspects:
Showcase your delicious food and drink with high-resolution photos, helping you stand out on the app. Consider investing in a professional photographer to capture your menu at its best.
We often order with our eyes, so having drool-worthy visuals of each dish on your menu will help convince customers to bite – especially for new customers who aren’t yet familiar with how great your food is.
Your written description helps customers decide what to order. You want these words to be clear and concise, but also as tempting as possible.
Have an angle in mind when crafting these titles and description, something that fits with your brand. Focus on taste, local ingredients, health benefits, etc., and incorporate this angle into how you describe the dish, the way it’s cooked, etc.
Mighty Green Salad
Organic micro-greens, napa cabbage, cucumber, cilantro, and carrot, with slow-roasted zucchini and hand-crafted croutons, dressed with our house balsamic (served on the side).
Like in the example above, the description should also list all ingredients, which helps prevent frustrated customers who open up their delivery order and find cilantro (when they hate it) or peanuts (when they’re allergic).
Similar to what you did with the photos, consider hiring a professional writer to help with your descriptions. Remember that you are competing with other local restaurants on these apps, so you want any advantage you can get.
Your current menu design may already have categories, but you may need to rethink your structure. Think about how your menu will appear on a small screen. The more you can separate your menu into distinct categories, the easier it will be for customers to navigate – and for you to track sales. The less scrolling a customer has to do, the better.
Make sure to include a “most popular” or “recommended” category that helps customers choose your biggest sellers (and hopefully highest profit margin items) as quickly as possible.
Modifiers and add-ons
Design your online ordering menu so that each item provides a list of extras customers can add or upgrade. In one tap, customers can customize their order. Instant upsell.
On average, customers spend about $4 more on digital orders. Capitalize on that trend by presenting options that add more to your sales without adding much to your workload.
How modifiers and add-ons make you more money
A typical pad Thai ($10)
Choose your meat
Shrimp + chicken ✔️
Family size, perfect for sharing (+$3)
Brown rice noodles (+$2)
Extra veggies (+$1) ✔️
Thirsty? Add a gourmet soda.
Ginger ale (+$3)
Natural cola (+$3) ✔️
Sparkling lemonade (+$3)
How about an appetizer?
Spring roll (+$2) ✔️
Tom Yum soup (+$4)
Chicken satay (+$5)
Mango salad (+$4)
PAD THAI = $10
WITH UPSOLD MODIFIERS + EXTRAS = $16
CHECK SIZE INCREASE = 60%
They get customized orders and you get a higher average check size. There’s no downside!
Note: Not all items on your regular menu have to be available for online ordering. If certain dishes don’t travel well or cost too much to package for takeout, reserve these for dine-in only. These exclusive dishes may create an incentive for customers to ditch the digital and visit your restaurant in person.
4. Develop Your Marketing Strategy
The great thing about third-party online ordering is that the system in and of itself provides a ton of marketing, getting your restaurant attention through the app’s listing and search function. Plus, companies like Grubhub and Uber Eats invest a lot of time and resources into marketing their platforms to increase the number of users, which in turn helps you get in front of more eyeballs.
But beyond organic marketing and third-party efforts, you’ll want to prepare your own marketing strategy for online ordering before you get onboard. This will help maximize your potential for new revenue through your chosen platform(s).
Set up street-facing signage that advertises which apps you’re on. Potential customers walking by will know where they can find you and place an order with a few taps. Work with your third-party apps to create personalized signs and menu cards for your restaurant’s foot traffic.
Add a banner, blog post, or button that shows which online ordering platforms you’re on, letting customers know they can easily get takeout and delivery from you. Plus, make sure your website is mobile friendly, which will make it easier for customers on their phones to see what your restaurant is all about.
Get the word out on Facebook and Instagram, along with some of those tantalizing, high-quality photos of your food – the same photos you used on your online ordering menu. Consider investing in paid ads on these platforms as well, targeting users in your area and letting them know your online takeout and delivery options.
Promotions or discounts
A great way to attract users in the app and start building your takeout volume is through coupons and promotions. Work with your third-party app to introduce promotional codes or automatic discounts on a customer’s first order or on a new menu item. Providing an extra incentive may give someone the push they need to try out your restaurant.
This is where the marketing services we mentioned (in the fee structure section) come into play. Work with account representatives from each platform you’re on to help you optimize where and how your restaurant appears in search results. It comes at a cost – of course – but can be a really effective part of an overall marketing strategy, especially when you first launch online ordering.
Online ordering is a great way to grow your customer base – and your sales. By following the steps we’ve outlined here, you’ll set up your restaurant for success with this new technology that’s here to stay.
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