In an age when most people would rather send an email or a text message than pick up a phone, it only makes sense that online ordering is taking off at such an incredible rate. In 2006, the Pew Internet & American Life Project reported that nearly 75% of Americans have Internet access, and, according to the National Restaurant Association, 13% of Americans placed food orders online that same year.
The switch to online ordering isn’t one that’s going to happen overnight, but don’t doubt that it is happening. Many fastfood consumers are also Internet users, which is why online ordering is fast becoming the norm for every college kid, on-the-go mom and busy executive. A recent online poll of 2,517 consumers nationwide conducted via email by AIS Media found that 89% of those polled had researched a restaurant online before visiting it, while 57% say they checked out the restaurant’s website. People are already interacting with the Web’s restaurant sites; the next natural step is to let them order while on your page.
Pizza Hut was the first national pizza chain to offer online ordering at scattered locations around the country starting in 1994, while Papa John’s, though smaller in scale, was the first national chain to release online ordering nationwide in 2002. Pizza Hut made its online ordering available nationwide in June 2007, with Domino’s following suit soon after in July. Pizza Hut was the first national pizza chain to offer online ordering at scattered locations around the country starting in 1994, while Papa John’s, though smaller in scale, was the first national chain to release online ordering nationwide in 2002. Pizza Hut made its online ordering available nationwide in June 2007, with Domino’s following suit soon after in July.
“Our consumers are on the go and expect fast, friendly and convenient service with no hold times,” says Rob Weisberg, vice president of precision marketing for Domino’s. “Adding online ordering was a no-brainer, and our major competitors were already in-market with it. Quite frankly, we were behind the times.”
With Pizza Hut, Domino’s and Papa John’s heading up the online ordering race, smaller chains and independents are beginning to jump on the bandwagon in hopes of benefiting from the massive marketing effort being put forth by the “Big Three.” Pizza Hut executives say that the chain’s online ordering business has grown sixfold over the last three years, and 30 online orders are placed every minute through the chain’s website. With numbers like that, it’s no surprise that others are curious about trying it out.
Resistance
With every new technology comes a level of resistance. This holds true in every industry but seems to appear more often than not in the pizza business, where many independent pizzerias still take orders with pen and paper and ring them up on old-school cash registers.
“Anything that’s new is going to sound intimidating,” says Stan Garber, partner, ONOSYS, a division of O-Web Technologies. “Many think it will change their operation, and they have the attitude of ‘What can online ordering possibly know about my customer?’”
“Pizzeria owners have no desire to be in the IT business; they’re in the pizza business,” says Patrick Quinn, president of Zeno’s Pizza. “People are naturally afraid of the unknown; unknown cost and technology is enough to discourage a lot of small business owners, but there are unknown benefi ts to online ordering as well.”
What resistant storeowners need to realize is that the next generation of consumers is Internet-savvy and constantly on the go. They’re always looking for a quicker way to get things done. Keeping a customer on hold while taking phone orders from five other customers is no longer acceptable; he will more than likely hang up and call one of your competitors.
“Online ordering seems to lack a level of simplicity for restaurateurs, which probably leads to some of the confusion,” says Thomas Barrineau, president and CEO of OrderCounter.com. “Online ordering is done hundreds of ways by hundreds of companies. There’s no standard that’s been set in the market yet. Though it may feel overwhelming, there are affordable options out there, and—since the larger companies are pushing online ordering, making it feel safe—the market is increasing.”
Roman Teller, CEO/CIO of eat2go (Athyron), thinks many operators may fear a loss of control over their menus and online ordering to web designers, programmers and other “experts.” But Teller says several online ordering companies let the owners remain in control of their in-store and online operations. “The Internet isn’t going away, and neither is Internet food ordering,” he says. “The concept may as well be embraced now.”
The time factor also seems to run the gamut, with some online ordering providers offering setup in a matter of hours and others taking two to four weeks or longer. This is usually determined by the method being used—POS, Internet-based, etc. The process usually requires you to fax over your menu, phone in your approvals or wait to integrate with your POS.
“We actually haven’t seen any resistance from operators thus far,” says Mike Reinecker of Signature Systems (PDQ POS). “The owners I’ve spoken to seem to be embracing it for the simple fact that it brings more orders into the restaurant.”
How to Make Sense of It All
With so many options to choose from, starting an online ordering program can seem like a daunting task. Some websites group multiple restaurants to accept online orders, while other independent sites cater to a single restaurant. Then you have the option of orders arriving in a variety of ways—faxed, phoned, printed, emailed, or integrated into a POS system. If that wasn’t confusing enough, the costs of setting up a program can range from free to thousands of dollars. So let’s cut through the confusion and break down the options so you can make an informed decision.
It’s important to understand how online ordering works before getting into the finer details. Online food ordering companies offer two methods of delivery: One is a software service that allows restaurants to purchase database and account management software and manage online ordering themselves (this also applies to the software that runs through POS systems). The other option is an Internet-based service in which restaurants sign a contract with an online food ordering website that handles the orders for a number of restaurants in a certain region. In one instance, you may be uploading and updating your menu yourself, while the other option will have someone else doing it for you.
When deciding on an online ordering service provider, you’ll need to decide how you want your orders to be delivered to your pizzeria. This will depend a lot on the equipment you already own. If you have a POS system installed, you’ll probably want to integrate it. If you don’t have any computers, you’ll need to take a different route, and many options are available. The beauty of online ordering is that you don’t need a website to get things started; a phone line is all that’s required.
POS Integration. Integrating online ordering with your POS system is by far the most convenient method of receiving orders—if you have a POS system. The orders are received directly into the system with all the information you need, and there’s no worrying about missing a fax or email. If you don’t have a POS system, purchasing one can be an expensive undertaking. Because each system integrates with different online ordering companies, take the time to research which online ordering company you’d like to use before deciding on a POS provider if you plan to take this route. For the same reason, think twice before switching POS systems if you already have one; be sure to check which online ordering companies they’re compatible with.
Fax. Many operators are happy with a fax-based option in which orders come through via fax and can be pulled off and filled. This is the ideal solution for the operator who doesn’t have a POS system, website or in-store computer. However, problems have arisen with this method, such as faxes piling up while employees are taking phone orders, faxes jamming and machines running out of paper. “If you can get synchronized with your POS company, go for it,” says Pedro Galletti, owner of Mozzarella di Bufala Pizzeria. “You don’t want to have to worry about the toner running out on your fax or the phone operator not paying attention to the faxes coming in.”
Printers. Some operators choose to have orders print directly from the Internet to an IP printer placed next to their phones, in their kitchens, or both. This allows order takers and kitchen staff to get the orders immediately and get started on them. Again, printers need to be kept stocked with paper and toner to avoid mishaps.
Email. Email alerts are usually suggested as a backup to faxes or printouts. This is for tracking and accounting purposes for the operator and usually isn’t depended upon for the initial order retrieval process, due to issues with forgetting to check emails coming in and possibly letting orders sit for too long.
Phone. Phone alerts work much the same as email alerts. They usually coincide with an order that’s already come through via fax or email, and are an added measure to let the staff know that an order has been placed.
Security
One of the biggest concerns when starting any program involving the Internet is customer credit card security. Online ordering is no different, and steps need to be taken beforehand when researching online ordering providers to find out what their security measures are.
“Most people wouldn’t consider ordering anything online 7 to 10 years ago,” says Barrineau. “Now the market is thriving because reputable companies promoted it. The same thing is happening with online food ordering.”
Taking the necessary steps to make your site secure beforehand will help eliminate future problems and help your customers feel safe when ordering from your site.
Getting the Word Out
Online ordering is by no means a get-rich-quick scheme. It’s not a matter of creating a website and waiting for the orders to come pouring in. Like any good marketing promotion, you must put effort into marketing your new offering before you begin to see significant return on your investment. And, while it’s true that you should begin to see some orders start to come in right away, the exciting results probably won’t show up until you’ve been at it for at least four to six months.
If you’re looking to copy the Big Three in your promotional efforts, it’s easy to spot their advertising methods when you turn on the TV, browse the Internet or just walk down the street. Weisberg says that Domino’s is currently marketing its online ordering option through national television (general and Hispanic markets), on dominos.com, through paid search, through all print vehicles and in all email marketing.
Even if you don’t have the budget of a big chain, you can deploy many marketing tactics to bring consumers to your new online ordering page and start reaping the rewards of your efforts—starting with box toppers and your phone message. “Add a sentence to your on-hold message that says, ‘Don’t wait on hold to place your order, simply go online to ourwebsite.com to order now,’” says Michael Weiss, vice president of RapidOrders.com.
“Most small pizzerias have low-tech websites or nothing at all,” says Gary Peek, president of Intura Solutions. “It’s imperative that they embrace the concept of a Web presence as part of their overall marketing strategy. Their websites must focus on building their brands and introducing products and services to their customers. Once that’s been accomplished, the next step is to add online ordering.”
“It’s important to include your online ordering website address on paper menus, business cards and telephone greeting/ hold messages,” says Michael Paycher, president of SoftTouch. “In addition, the site should be listed in all of the online free listing services, such as local.yahoo.com, local.google.com and yellowpages.com.”
Many online ordering providers, such as Pizza Galaxy, provide the marketing for you, making sure your new site gets listed in all of the free search engines and sending emails to your existing clients.
“Direct mailers to targeted areas work great to spread the word,” says Tara Doyle, director of marketing for Revention POS Solutions. “Current customers who receive marketing materials can also spread the word to friends, family and neighbors.”
“If owners offer incentives such as $1 or $2 coupons for online orders, this will motivate a larger number of people to jump on board,” says Richard Allen, president of One Click Dining. “Best of all, a coupon program offered through an online menu requires no money to create flyers or to deliver to the intended market.” Allen says one of the simplest ways to get the word out about online ordering is to place a banner in front of your POS/cash register where the customer pays.
With an existing POS system, you have a database of customers at the ready. Lisa Ann Bouikidis, president of Touch Pro, says that it’s an easy and recommended step to send out emails to all of your existing customers to alert them about your new online ordering option.
“It’s important to promote online ordering around the store with signage, place the website on receipts, and offer discounted pizzas or coupons when orders are placed online,” says Peter Hansen, director of marketing for Food Order Systems. “As revenues rise and online ordering becomes increasingly popular, search engine advertising becomes plausible and profi table.”
Scott Paratore, president of Microworks POS Solutions, agrees that marketing your online ordering should be crosspollinated among all materials—pizza boxes, menus, box toppers, door hangers, print ads and radio/TV ads should all have the tagline “Now Order Online at customerwebsite.com.”
The simplest advice comes from Tom Bronson, president and CEO of DiamondTouch: “Just market every way you can think of! The more you promote it, the more you’ll gain from it.”
Show Me the Money!
Across the board, operators have been finding that online tickets average up to 20% higher than phone orders and are realizing that online customers are more likely to place repeat orders. And, with an average customer return rate of 95%, according to Doyle, it won’t be long before more restaurants join in the online ordering race.
“One of the best benefits of offering online ordering is that brand loyalty is often increased,” says David Gosman, CEO of PcAmerica. “If clients have an easy time ordering online and see their orders delivered properly, they’ll tend to migrate back to the same website when ordering in the future.”
While pizza customers are usually notorious for being less than loyal when it comes to pizza chains, Pizza Hut director of digital marketing Bernard Acoca says that online ordering has boosted loyalty for the company. “We find that our customers have such a great experience ordering online that they’re happy to come back. We’ve even designed a ‘Pizza Playlist’ where customers can store up to four of their favorite pizza orders for easy, one-click ordering the next time they come back to our site.”
Jennifer Wiebe, marketing manager for Speedline Solutions, agrees that order sizes tend to be larger for online orders. “I’ve been hearing from our clients that the order sizes range from 17% to 30% higher than phone orders,” she says. “Web ordering is very appealing to business customers who may prefer to place large office lunch and catering orders online, and the service does very well in college towns and any area where a large percentage of the population has high-speed Internet access.”
It’s not a fluke that online orders average higher than phone orders. Think about it: Your customer is sitting in front of a computer with the entire menu in front of him; you have the opportunity to silently sell drinks, desserts, side items, dipping sauces, you name it. Plus, many times, the same access to coupons isn’t available, automatically making the order total higher. “Online orders have a higher incidence of credit card use, driving up the ticket,” says Weisberg. “Also, 40% of our orders online are at full menu price.”
According to Peek, there are four key reasons that online orders are higher than phone-based orders: “Customers feel less pressure adding items to their orders while online than when restaurant employees ask them; they have more time to review the products and various offers; they’re typically using a credit card online and will spend more than when using other payment methods; and websites can implement suggestive selling techniques that happen every time, whereas restaurant employees will not be as consistent.”
“The average ticket price of an online order is $25 to $30, since the customer can review the restaurant’s entire menu at leisure instead of just ordering the things they remember from last time,” says Quinn. “They get ideas for other items to buy, and it’s not coming out of the cash they have on hand, because they’re using a credit card.”
Operators who already have an existing website with good traffic have the upper hand when it comes to starting an online ordering program and will more than likely see results immediately, according to Jordan Kimberg, president of LetsGet.net. However, Kimberg warns that those who don’t spend any money on marketing other than adding an online ordering website might never see any benefit.
Future Outlook
PMQ’s Pizza Magazine recently tallied the results of the 2007 Pizza Industry Census and found that of the 302 people who responded to the question about online ordering, 27.5% were either offering online ordering in their pizzerias now or will be in the next 6 to 12 months. This number refl ects only the surface of where the industry will be in the next 5 to 10 years as online ordering grows. “Consumers as a whole are beginning to expect online ordering,” says Garber. “You will soon be at a competitive disadvantage if you don’t offer it.”
Michael Saunders, president of Campusfood.com, which has provided online ordering since 1997 and recently teamed with Vital Link POS for integration, says that the site received 44 orders per day back in 1997; now they get around 15,000 per day. “We processed 2.5 million orders online in 2007,” says Saunders, “and we plan to break our ‘10 million total orders placed’ mark by next year.”
Many online ordering companies have seen the future of multiethnic ordering, as well, offering their systems in multiple languages to cater to a diverse demographic. “Our system is fluent in Spanish, French, Portuguese and more,” says G.R. Homa, managing partner for BigHoller.
“The convenience and access of ordering online is expanding to other vehicles, such as mobile and text ordering,” says Acoca. “On January 15, Pizza Hut will be the first national restaurant chain to offer ‘Total Mobile Access’, which will provide customers with nationwide text and mobile ordering.”
“Businesses must adjust to the times,” says Weiss. “Today, online ordering isn’t so much a luxury or a nice extra feature; it has become a necessity for pizzerias.”
And, if the act of placing orders online isn’t fast enough for consumers, the executives at QuikOrder recently patented a new technology called FAVORDER that allows customers to store ordering information once and then order their favorite meals with one click of the mouse on repeat visits. Vice president of sales and marketing, Eric Bermont, says that it’s the first truly one-click solution for ordering products and services online.
The future of ordering, according to Domino’s, is something Weisberg likes to call “Couch Commerce.” “Imagine sitting on your couch, watching your favorite movie on your DVR and being able to click a button on the remote to order your pizza,” he says. “It’s not that far away.”
