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Grow Your Business Technology

Does My Restaurant Need to Offer Mobile Ordering to Get Ahead?

Does My Restaurant Need to Offer Mobile Ordering to Get Ahead?
Credit: Joshua Resnick/Shutterstock

National chains like Starbucks, Five Guys, Chick-fil-A, Taco Bell and, most recently, McDonald's have popularized online ordering, and busy customers appreciate the convenience of skipping the line. But if you're an independent restaurant owner who doesn't have the deep pockets of a franchise or chain, does mobile order-ahead make sense for your business?

The expense and technological know-how needed to create and maintain a mobile ordering app may be daunting, but if you're looking for strategies to give your restaurant a competitive edge, offering mobile order-ahead is worth looking into – and there are several options that are less expensive and easier to implement than a custom app.

In addition to cutting your customers' wait time and making it convenient for them to quickly pick up their orders, mobile order-ahead can help you attract new customers and gain increased loyalty from your existing clientele. Consider the following:

When selecting menu items on their phone, customers have no fear of receiving a judgmental smirk (whether real or imagined) when ordering large fries with a diet beverage and low-carb entree, or of hearing impatient sighs from customers waiting behind them as they study the menu. As a result, they're likely to place larger orders. For example, Business Insider reports that Taco Bell's mobile order tickets are 30 percent higher than its in-store sales.

The National Restaurant Association's 2016 State of the Industry report shows that 63 percent of smartphone users place takeout or delivery orders using their phones. However, only 37 percent of restaurants offer mobile ordering, with chains and franchises four times more likely to offer mobile order-ahead apps than independently owned establishments. Industry experts expect the demand for mobile order-ahead to rise, estimating a 57 percent increase in these sales over a five-year period, reaching $38 billion by 2020, according to Business Insider. Adopting this technology now sets your business apart as a trendsetter and allows you to cater to customers who don't want to spend their lunch hour waiting in line.

In addition to craving convenience, consumers want to save money. By offering coupons, promotions or loyalty rewards to your customers through your online ordering app or website, you encourage repeat business.

The NPD Group, a marketing research company, notes that money-saving promotions are effective incentives for mobile order-ahead customers, with 29 percent of all digital orders utilizing coupons. The combination of order-ahead and loyalty programs has been successful for Starbucks, which reported to Forbes a 16 percent year-over-year increase in active app users and 27 percent of its U.S. sales coming from orders placed using its app.

While the benefits of offering mobile order-ahead technology to your customers is enticing, the cost and complexity of creating a custom app can be prohibitive.

"In a smaller merchant's reality, very few are ready to invest $10,000, let alone $100,000, in an ecommerce website and a mobile ordering application," said Jean-Francois Noel, CEO of mobile ordering solutions company FANS Entertainment, in an interview with PYMNTS.

However, white-label apps and order-ahead aggregators are lower-cost alternatives that can give you the functionality you need. Here are some options to consider:

Some point-of-sale companies, such as Revel Systems and SalesVu, offer white-label apps that you can customize with your restaurant's branding and use for mobile orders. The advantage to this solution is that the app is ready to use – it's already been developed and tested – and integrates seamlessly with your POS system. The drawback is that, if you switch POS systems, you also have to find a new mobile ordering solution. [Looking for a POS system? Check out Business News Daily's best picks.]

Order-ahead aggregators, such as Grubhub and Yelp's Eat24, are mobile app platforms that work with many restaurants, giving customers the ability to find multiple order-ahead and delivery restaurants from a single app. Engadget reports that Amazon is also getting into the order-ahead aggregator space through the new Amazon Pay Places feature on its app, though at this time it's only available to TGI Fridays restaurants in a few eastern U.S. cities.

The benefits of working with an aggregator are that it's less expensive than other options and helps order-ahead customers find you, which is an advantage that even restaurants with custom apps could capitalize on. However, it lumps your restaurant in with your local competitors, and repeat customers may choose to try another local restaurant when presented with multiple options.

Although mobile order-ahead is increasingly popular, especially among quick-service restaurants, developing a custom app is a costly venture that not many independent restaurant owners can afford. However, less expensive options, particularly working with an order-ahead aggregator, are viable solutions that restaurant owners would do well to investigate.

Lori Fairbanks

Lori Fairbanks has years of experience writing and editing for both print and online publications. After graduating from Brigham Young University with a Bachelor of Arts in English, she worked as an editor for Creating Keepsakes magazine and then as a freelance writer and editor for a variety of companies, including marketing firms and a medical university. She joined Purch in 2014 as a senior writer for Top Ten Reviews and now writes for Business.com and Business News Daily.