The Importance of Online Ordering
In 2016 Irish consumers spent €1.45 billion on takeaway food ordered from 3,000 different restaurants that employ 25,000 people. The industry is likely to get considerably bigger, with the growth in online ordering set to increase by as much as 60 per cent over the next four years. More and more people now rely on smartphones to have their food delivered. Independent operators must pay attention to this huge increase in online ordering and decide how to best incorporate it into their business model.
While growth in the whole sector is healthy – with research suggesting that the overall takeaway market will grow by 17 per cent by 2020 – it’s the online space where expansion is forecast to be strongest. According to QSR, projections indicate that mobile ordering will account for 10.7 per-cent of all quick-service sales by 2020, and – most excitingly for takeaway owners – statistics also show that mobile and automated orders are more profitable from an operations stand-point. According to Business Insider, Taco Bell in the States saw a 30 percent higher average order via mobile than orders taken in-store.
Yum! Brands, the parent company of Taco Bell, KFC, and Pizza Hut, announced in 2016 that mobile ordering comprised nearly half of its total U.S. delivery and carryout sales.The managing director of JustEat.ie, Amanda Roche Kelly, has said that the growth in smartphone penetration is affecting consumer behaviour and in the case of the takeaway sector, it’s driving growth: “We believe that the role of technology in helping a traditional industry to innovate and grow has only just begun. This sector is a model for other parts of the economy where technology can play a positive and disruptive force – delivering growth that previously would only have been dreamt about”.
In Ireland, Just Eat, Deliveroo and Marvin are examples of aggregate sites that list all the delivery options in your area, when you open the app. But as always with the online space, technology moves very fast and an alternative to going with the aggregates is to get a custom app for your business. Pizza chain Domino’s have developed a pizza tracker, which allows customers track their pizza’s progress. This has been downloaded more than 10 million times in Ireland and Britain, and 75 per cent of Domino’s orders are now online, which shows the huge potential, especially among younger customers.
Since 2015, Irish company Flipdish offers branded online ordering platforms for foodservice operators. Says James McCarthy, co-founder, “Each app and website is branded with a food outlet’s menu and logo, and the software comes with pre-built customer loyalty programmes and automated discounts for repeat business. Over 500 restaurants in Ireland now use our service.”
Online ordering is here to stay and is only set to increase over the next few years. What’s the best way for you to incorporate this into your business?
1 – Aggregate sites – Just Eat vs Deliveroo vs Marvin.ie
While Just Eat has been around for a while, Deliveroo is the newer trendier kid on the block targeting the premium more upmarket segment of food ordering. Irish site Marvin is also relatively new and does a similar job to its rivals – though they claim to be more focused on rewarding customer loyalty and offering a better deal to the businesses. “I’m trying to build Marvin.ie into a company that rewards customer loyalty and collaborates with business and that’s where I think our rivals have fallen down” explains MD James Galvin.
Deliveroo displays restaurant name and delivery time whilst Just Eat and Marvin are more descriptive with name, address and ratings. It makes sense for Just Eat and Marvin to show the address as they offer both delivery and collection, so users can decide taking into account address and proximity.
Another thing ‘Just Eat’ does well is offering filters for quick sorting, something which aids quick decision making and saves browsing time for the customers. Deliveroo only accepts card payments, while Just-Eat allows cash payments as well on delivery. Marvin takes both cards and the very modern Bitcoin!
Unlike Just Eat and Marvin which aggregates restaurants for customers for delivery or collection, with the restaurants themselves deciding how to deliver to customers post-ordering, Deliveroo has its own dedicated fleet of cyclists and drivers who pick the food from the restaurants and deliver to the customer – their cyclists resemble snails with large square boxes on their backs.
Each of these aggregate sites have different things going for them. In general they will provide a new stream of customers due to their market dominance and high visibility, but this comes at a price: they charge commission, ranging from 30% for Deliveroo to 13% for Just Eat and down to 7% for Marvin.
2 – Having your own branded app.
The other option for a restaurant is to have your own branded app for online ordering. It requires more work initially but once it’s up and running it allows you to be in control of your customer database and to avoid high commissions.
You can set up your own app, or you can go to a ‘whitelable’ solution like Flipdish who will do all the design and technical work for you.
Flipdish, which was founded in 2015 by brothers James and Conor McCarthy, develops per-sonalised apps and websites for restaurants and takeaways. Each app and website is brand-ed with a food outlet’s menu and logo and the software comes with pre-built customer loyal-ty programmes and automated discounts for repeat business.
Says James McCarthy, co-founder: “We developed this after talking to restaurants about what they want. We found restauranteurs were crying out for something like this. Online ordering is the way of the future but platforms like Just Eat don’t offer all the benefits needed. With Flipdish you build up your customer database, you’re in constant contact with them to that you can offer deals for repeat custom, and they’re not being pointed towards your competi-tors, which is what happens with aggregate sites.”
Flipdish customers pay a once-off development fee, which includes advertising material and you get an account manager to work with the restaurant to build a customer database. Flipdish takes an average 7% cut from all sales processed through its platforms – but it’s a tiered system which benefits those who make more sales (and for Kepak Gold customers, it starts at 6%).
Currently Flipdish is in eight countries. In Ireland 500 restaurants use its service, includ-ing salad joint Chopped, Indian takeaway Bombay Pantry, restaurant chain Mao, and inde-pendent takeaway owners.
One of these ‘indies’, Ben Macari, owner of Macari’s, is delighted with the service: “Flipdish has helped me increase total orders and to migrate customers away from costly third-party portals. Their loyalty campaigns and push notifications help to increase customer order frequency and they are always quick to respond to any menu changes or other requests.”
Depending on your location and the demographic of your customer base, online ordering may be something urgently needed right now, or something to look at implementing down the line. Either way, take a bit of time working out which is the best option for you to go with.
