What happens if you don’t offer online ordering for your restaurant?
To say that technology has transformed our very existence is no exaggeration. Technology affects every single aspect of our day-to-day lives, giving rise to accelerated lifestyles. Perhaps hyper-connectivity and availability of information at the touch of a button have led to immediacy and convenience becoming primary concerns for individuals today, especially the younger generation. This on-demand culture, driven by Millennial and Gen Z customers, is dictating the way businesses operate and the restaurant industry isn’t immune to this effect either.
According to a Nielsen study, consumers are now demanding convenience not only at the time of purchase but at every stage of shopping and brand engagement with products and services. This implies that a business needs to put convenience for customers first in whatever they do. As the study states, you have to be ‘in-store, out of the store, in the home and everywhere in-between’ in order to give consumers convenience on all fronts, from the ease of purchasing to time-saving and suitability.
For restaurants, this simply means that they are required to reach out to diners wherever they’re located, rather than waiting for them to walk in through the doors.
To stay ahead of the curve, restaurant owners need to take their business to the customers. In other words, they need to set up an online ordering system that allows customers to order quickly and get their food delivered to their doorstep.
Online Ordering — Undisputed Future of the Restaurant Industry
Indeed, thanks to technologies like smartphones and changing customer expectations from brands, online ordering is the undisputed future of the restaurant industry. It is the fastest-growing segment of the restaurant industry, with Morgan Stanley's research predicting that online food delivery will account for 30% of total restaurant industry growth through 2022.
In fact, when you look at the statistics for online ordering the numbers are quite staggering. According to UBS, online ordering sales could rise an annual average of more than 20% from $35 billion to $365 billion worldwide by 2030. These figures are only rising and are set to escalate even further with time and advancement of technology.
But even with all these clear advantages and expert forecasts, some restaurants still have not adopted online ordering in their business model. If you fall into this category of restaurant owners, this article will offer a healthy reality check for you.
Here’s what’s going to happen if you don’t sign up for online ordering for your restaurant.
You lose customers
60% of US consumers are ordering delivery or takeout once a week. This should give you a clear picture of the popularity of online ordering and how big a chunk of customers you’re losing out on by not adopting this technology.
If your restaurant’s not offering the convenience of online ordering, a customer will swiftly take their business to a competitor who does. Moreover, online ordering also helps draw in dine-in customers.
Studies show that 67% of customers who have placed an order online will visit the physical location more frequently than those who have not. Therefore, by adding this extra vertical to your business, you’re reaching out to both online and offline customers.
You give up on a new sales channel
Since 2014, digital ordering and delivery have grown 300% faster as compared to dine-in traffic. You’re missing out on a hugely profitable business opportunity by not offering online ordering for your restaurant.
Millennials have been the driving force behind this on-demand economy and now this generation is also reaching its prime spending years. Millennials overtook the Baby Boomers in spending power back in 2018 and by 2020 Millennials will have a collective spending power of $1.4 trillion.
With such data in hand, it goes without saying that if you don’t cater to this generation’s needs, you are making a big mistake. However, by embracing the need for quick, efficient and convenient dining, you open a new sales channel that could roll in the much-needed dollars as the restaurant industry is already notorious for having a slim profit margin.
You lose profits to food aggregators
If you’re resting assured after signing up with a food aggregator platform like UberEats, DoorDash, GrubHub, etc, you need to step back and reconsider your decision. There have been several instances where restaurants have been bled dry by outrageously high commissions charged by food aggregator sites. Besides unfair commissions charged by these platforms, that infringe on a restaurant’s overall profit, people have also complained about other things like hidden costs for marketing fees, dissolving brand identity, contentious tipping policies and denying access to customer data.
No doubt, food aggregator sites are still very popular, but in order to gain more control over finances, branding, and customers, it is becoming increasingly important for restaurants to divorce from these sites and set up their own online ordering channel.
Your perceived brand value decreases
Perceived brand value can be defined as the customers’ assessment of the quality of a product or service and its potential to meet their demands and expectations. There are many factors that influence how consumers perceive a particular brand’s value.
The merits and price of a product or service are certainly determining factors. But high on the list are also customer service, purchase experience and innovations offered by a brand.
When a customer is looking up information on your restaurant and finds out that you have a great menu as well as competitive prices, but do not offer technological services like the ease of online ordering, your perceived brand value immediately decreases. This can cause lasting damage to your brand in the long run, thus affecting sales and profitability in turn.
Your competition leaves you behind
Every study on industry trends, expert opinions, and business owners’ personal experiences have unequivocally proven that online ordering is indispensable to a restaurant’s success. A restaurant that fails to evolve will gradually fail to compete and eventually become defunct.
On the other hand, restaurants who are quick to endorse online ordering services will have the best chances of survival. As it is, the restaurants have a high failure rate, some statistics state that about 60% don’t make it past their first year and 80% go out of business within five years.
Without offering online ordering to your customers, you’re giving your competitors one more edge against you, while denying your business an opportunity to grow further.
If you wish to sell more and serve more, you must leverage the power of online ordering. Click here to read more benefits of having an Online Food Ordering System.
While the case for offering online ordering for your restaurant is strong, it’s also important to remember that you shouldn’t be in a rush to set up one.
Like any other aspect of a business, before taking on any new operations, you have to first introspect to understand your needs and then conduct thorough research to find the service that best meets those requisites.
By jumping into the bandwagon without careful consideration, you could end up making a fatal error. To find your starting point, you need to analyze the current state of your restaurant’s operations and our future goals.
Want to know how online ordering works?
View Demo from Restolabs, a leading cloud-based online ordering software for restaurants.