Online ordering can be a game-changer for a restaurant business, especially in times as grim as the pandemic, where social distancing and other governmental norms can alter how you do business.
Brick and mortar hospitality businesses have to look for ways and means to branch out to creating assets in the digital world too. It could be as simple as adding an online ordering layer to the physical business.
Having said that, any online ordering platform out there isn’t the answer to all your problems. You’d do well to look around before signing on the dotted line.
After talking to several restaurateurs in Ireland and the UK and listening patiently to their stories, a few common points have emerged as bottlenecks in the current online ordering landscape.
- Lack of reliability and ease of use: An online ordering system is only as good as the reliability it offers. A piece of technology that lets you down in the crucial moments of a live transaction can be a cause of much angst for all stakeholders involved. Unexpected downtimes can lead to orders getting lost or falling behind. Payments can get stuck for no fault of yours and disrupt the revenue flow. Now that you know how the reliability of your online ordering system can make or mar your business flow, it’s a no-brainer to do your homework in terms of figuring out a reliable platform to partner with for the long term.
It is also important to make sure the technology you are paying money for is easy to use. The system should not be so complex that you cannot make any heads or tails out of it and you are forced to call up the support team every now and then. You made the decision to have the technology in the first place on the assumption that it would help your business grow and do its work in the background seamlessly. If you are getting stuck in the nitty-gritty of making it work for you on an everyday basis, then maybe it was designed for geeks by geeks. Here again, it is essential that you check out the front-end and back-end part of the ordering system along with the UI/UX before the onboarding process. Give it a trial run and get the feel for it before opting in completely.
- Long and drawn-out payment cycles: Imagine your restaurant runs 7 days a week and 365 days a year like a well-oiled machine. Customers pay you by cash/card at the counter, the revenues keep coming and the business keeps running. You decide to add an online ordering interface to your physical business and the last thing you’d want is a long and drawn-out payment cycle. This would obviously lead to lags and create friction in business processes. How’d you get around this? Well, start by asking questions to potential online ordering partners in terms of how much minimum time it takes on an average for the payments to get processed. Next, do a comparison of all the times and zero in on the provider that quotes the least average time without taking it at face value. Finally, choose an ordering platform that offers the shortest payment cycle and also has consistently build such a reputation in the market over a period of time. This strategy combines the efficacy of your own due diligence and the validity of the social proof that the ordering partner enjoys.
- High commissions on every order: This could be a deal-breaker for many restaurants. Online ordering providers mainly offer 3 different pricing options:
a) Monthly flat rate pricing model: A pre-fixed flat rate per month irrespective of the number of orders.
b) Commission pricing model: Only a commission at a certain percentage of the overall cost is charged on every order.
c) Combination of monthly flat rate pricing and commission pricing.
While every extra order through online ordering is always welcome, paying commissions on orders can burn a deep hole in your business pockets and impact bottom lines. It would be worthwhile to do the math taking into account the average monthly order size and the commission rate. The idea is to strike a fine balance between the two and determine if having an online ordering system that demands commissions is a drain on your business resources and diminishes the profit margins. If the answer is yes, you may want to lean towards a monthly flat rate pricing or a combination model to put a stop to unnecessary pay-outs. If your restaurant business can figure out this piece of the puzzle and nail it, then the rest of the elements become easier to manage.
- Too many aggregator orders than direct: Getting your restaurant listed on aggregator platforms is a great way to expand your physical reach and net more paying customers. There are aggregators like JustEat, Deliveroo, UberEats and others to choose from. You could decide to be on one platform or multiple platforms depending on your needs. However, just like there are no free lunches in real life, here too you would have to split your revenues with your partner company. This could pinch you more when your restaurant receives more aggregator orders than direct ones, resulting in reduced profit margins. The key here is to figure out how much is your outgo to aggregators and then balance it out with your direct orders. It should also be noted that third party aggregators do not lend themselves to offer branding/customization levels of the desired degree. On top of that, customers would often tend to look at your brand through the prism view of the aggregator your restaurant is on. A healthy ratio between the two channels should give you the best of both worlds.
- Difficulty managing own deliveries and drivers: An online ordering system can come with a myriad of possibilities, and if yours isn’t offering much scope beyond the basic stuff, then maybe it is time to look elsewhere. For instance, add-ons like delivery and driver management can really provide more spite and functionality to your online ordering process. You would have the ability to track every delivery and driver until the final destination of the package. This ensures no order is lost or falls behind and in the unlikely scenario of a technical glitch things can be remedied at a later time and improvements made. All online ordering platforms are not made equal and some go the extra mile to help you manage deliveries and drivers as well, which is similar to your own restaurant taking extra care in the physical world towards customer delight. A wise choice here after proper research and asking around should help you in a big way in the overall scheme of things.
- Integration limitations: Integration capabilities are worth pondering over when one decides to opt for an online ordering system. Integrations help in the functions of POS, payment, loyalty and marketing. Without integration and interoperability, it would be very difficult to leverage the full spectrum of benefits of an online ordering system. You would be missing out on POS integration with providers like Slowey, Caterease, Clover and Lightspeed. The same goes with Stripe, PayPal and Braintree for payment processes and Cheetah Digital, LevelUp and Punchh for loyalty management. Finally, your marketing could be crippled if there is no integration possibility with partners like Google, Facebook, AdRoll and more. Adopting a standalone ordering system that does not integrate and works in isolation is an exercise in self-limitation, which your business can do without.
- Lack of branding/customization options: Let us assume your physical restaurant has been running well in the neighbourhood community for over a number of years. You have developed goodwill and the restaurant has established itself as a brand to reckon with. However, with online ordering, It is easy to get drowned in the crowded marketplace and not be visible or heard as a brand if you do not take enough care. Ideally your physical brand value should be able to carry itself forward to the online ordering space as well. When you decide to partner with an online ordering platform, it is important to ask how many branding and customization options are on offer. If the ordering partner you are negotiating with has limited to no branding options, perhaps you should give them a skip and look around more. You want your restaurant to be on top of mind and recall of your customers, and it makes all the sense in the world to onboard with an online ordering provider who facilitates that to the maximum extent possible.
An online ordering platform can certainly help your restaurant business to grow and scale, but choosing one randomly and expecting it to yield great results would be only wishful thinking without any sound business judgment. We hope this write-up has shed some light on areas where you may want to focus upon before joining hands with an online ordering provider. Do let us know your specific pain points as a restaurant business looking for an ordering system and what do you expect from an online ordering partner. We would be happy to read your comments and hopefully tailor our next newsletter around your view