Searching for a way to boost sales and satisfy the demand for fast, no-hassle food, some operators are adopting sophisticated online ordering systems that promise to make takeout seamless for both restaurant and customer.
One model is the website that accepts online orders from customers and faxes them to the restaurant for fulfillment. This requires restaurant staff to manually enter orders into the store’s point-of-sale, or POS, system and collect payments at pickup. A more sophisticated model is the Web-based network that integrates with the POS. It processes credit payments and sends orders to the kitchen printer. This option reduces the labor associated with takeout and lets customers pick up orders with minimal delay.
The latter option attracted operator Stephen Silverstein, chairman and chief executive of Not Your Average Joe’s, a 13-unit chain of casual restaurants based in Dartmouth, Mass. He reported 20 percent growth per week in takeout sales, admittedly from a small base, since the rollout a month ago of NextChoice online ordering software integrated with the chain’s POSitouch POS system.
“It’s working very well,” Silverstein said. “The key selling point for me is that an online order prints out in the kitchen no differently than if a server took it in the dining room. The ability to take out the human element is key. Think of all the ways an order can get screwed up on the phone.”
To order, a Not Your Average Joe’s customer clicks one of the store locations on a drop-down menu on the online ordering interface. The next step is to log in, set up an account with credit information or go to the online menu page. The pickup may be set for up to eight days in the future, provided the store is open. Menu items have buttons that are clicked on to order. Each item is itemized with a running dollar total in a frame on the right side of the page. Once submitted, the NextChoice software sends the order to the POS and kitchen for fulfillment.
“I believe that 25 [percent] to 50 percent of my takeout business will be placed online this way in a few years,” Silverstein said.
Although Silverstein declined to reveal his payment details, he said, “I don’t believe the cost is significant given the opportunity to build your business without bricks and mortar.” According to NextChoice sources, operators pay $100 to $250 per month per store. NextChoice also offers outright purchase of its system.
Online customers are “virtual cashiers,” said Chris Bright, president of zpizza, a Newport Beach, Calif.-based pizza chain with online ordering in 11 of its 55 units. “They take care of payment themselves, freeing the staff to handle in-store business,” he says.
His target customer is “affluent, educated and accustomed to going online” to do business rather than using the telephone. The 411Eat online system used by zpizza integrates with the chain’s Radiant Aloha POS and sends orders to the kitchen printer.
Zpizza pays 411Eat a monthly fee of $90 per store. “They provide online ordering without upfront costs,” Bright said. “We did not want to go with a provider that has a per transaction charge in addition to a monthly fee.”
After only two months of online ordering experience, it is too early to quantify takeout-sales increases, Bright said, although takeout checks appear larger.
Officials at Fatburger say online ordering is increasing the size of the takeout check and probably the number of takeout transactions, too. The Santa Monica, Calif.-based fast-casual burger chain, which introduced online ordering in October, currently offers it in 37 of its 86 stores. The average check for online takeout in those units is $16.50, compared with the overall average of $9 to $10.
“[Takeout checks] are absolutely higher,” said vice president of marketing Elaine Patel. “If you’re in an office and say you’re ordering lunch online, you’re going to have other people add their orders, too.”
Fatburger’s Kudzu Interactive software integrates with its Radiant Aloha POS. “You pay online when you order, so you can just pick up your order and go,” Patel said.
It includes an upselling feature that suggests add-on purchases like a 32-ounce soft drink. In addition, Fatburger and several other restaurant chains are available for online and cell phone ordering via Kudzu Interactive’s
“We’ve made a commitment that corporate stores will have online ordering,” Patel said, “and the franchisees are enthusiastic about it as well.” In fact, although online sales have yet to be reviewed, Patel said that a Fatburger franchisee reported $4,000 in online orders per store during a six-week test.
Working with Kudzu Interactive, Fatburger can launch e-mail blasts of promotional offers to online customers who have opted to receive such messages. “It can help not only operations but marketing as well,” Patel said.
According to Kudzu Interactive, operators pay a monthly fee of $100 to $150 per store for its online ordering system or a per-transaction fee that is typically 3 percent.
For its part, zpizza would be “selective” about marketing outreach to customers, Bright said.
“We’re assuming that many people may not wish to be contacted,” he said. “That’s why they’re going online.”
At Rascal House USA, the simplicity of online ordering has led to “continual repeat customers,” said Mike Frangos, president of the six-unit, Cleveland-based chain doing business as Rascal House Pizza Cafe.
“Customers don’t have to wait, and they don’t take the chance of having a person who is incompetent taking their order,” Frangos said.
Online tickets are often substantially larger than those from phone orders. “We’ve had orders over the Internet as large as $1,100,” Frangos said. “That’s surprising to me.”
Online orders processed with ONOSYS software are received at Rascal House stores on TCP/IP network-enabled printers and manually entered into the SpeedLine POS system. However, the process should be streamlined in early 2007 when ONOSYS completes its integration with SpeedLine, according to the vendor.
Rascal House pays the provider $2,000 to $3,000 in fees per year for all six stores.
One proponent sees online ordering as just one facet of a larger self-service trend.
“Having a network of restaurants connected by a Web-based solution enables you to have a call center that can place orders not only online but also by cell phone,” said Jim Garrett, chief executive of Atlanta-based Kudzu Interactive LLC. “Soon customers will expect restaurants to let them order anywhere and anyhow that’s convenient at the time.”
Other vendors have similar visions, such as NextChoice, which markets its technology as applicable to at least five customer contact points beyond online: drive-thrus, in-restaurant kiosks, dining room tabletop devices, centralized call centers and cell phones, and wireless-communications instruments.
