The fast food business can be traced to ancient Rome, with only slight tweaks in the ordering process done since then. Yet the XXI century requires a truly modern approach that can be delivered only with modern, sophisticated tech tools.
Online ordering has soared with the COVID-19 pandemic, showing multiple advantages, including safety and convenience. It was also the only source of income for numerous restaurants.
What has been changed, cannot be unchanged. Customers have already experienced the convenience of online and digital ordering and expect the same levels of experience in the physical locale. Yet the process of ordering there is where the inefficiencies occur. This text enlists:
- Low margins
- Low order value
- Complicated order management
- Manual work
- Limited knowledge of customer
And shows how to tackle them with a modern ordering system!
Inefficiencies in the ordering process (and how to tackle them)
The traditional ordering process has only slightly changed in modern times, usually by making procedures or good practices out of the “gut feeling” of the business owner. An iconical “would you fries with that” question is a perfect example.
Yet even boosted with modern marketing and sales, the traditional ordering process has serious limitations.
According to the Restaurant 365 data, the average restaurant profit margin in a fast-casual restaurant varies between 6 and 9 percent. Yet this approach shows only a part of the truth, with a profit margin depending heavily on the product. For example, the restaurant earns a higher share from selling fries than selling a burger, mostly due to the cost of meal preparation and ingredients.
Low-profit margins can be tackled by either selling products with a higher profit or bundling them. The second approach was mastered by McDonald’s, where nearly every product can be bought bundled with fries and a coke.
Yet bundling can be challenging to apply, especially when using more antiquated POS systems. Thus, a more flexible solution that enables the team to build ad-hoc bundles or process bundled products separately POS-wise.
Low order value
The fast food restaurant builds up profit from a large volume of transactions and even the biggest players operate on low order values. According to Bloomberg data, the average transaction value at Wendy’s was $14, $13 at Burger King, and $11 at McDonalds in Q1 2022.
Yet considering the scale of the fast food restaurant operates, every additional dollar on a recipe can result in thousands of dollars monthly. A cashier standing behind the service desk can offer more products or ask about preferences, yet he or she has limited patience and time to serve every particular client.
Solution: Upsell and cross-sell options
A more sophisticated, online system leverages all the experiences gathered by the e-commerce sites. including the upsell and cross-sell solutions. The automated online system or a self-service kiosk can use pop-up windows, limited-time offers, or suggestions to boost the average order value. According to McKinsey data, cross-selling accounts for up to 21% of value companies derive from revenue synergies.
Solution: Sophisticated marketing solutions
Marketing in the ordering process is not only about the cross- and up-sell. It is a plethora of possible solutions including loyalty programs, discounts, morning breakfast offers, and so on. Some of them are applicable in a traditional ordering system, yet most of them require a full digitalization of the ordering process.
Complicated order management – tablet hell and long queues
A marketplace like Glovo or Uber Eats can be rocket fuel for the restaurant business. According to Zippia data, online food ordering has grown 300% faster than dine-in and currently accounts for up to 40% of restaurant sales. The average American spends $67 on takeout per week.
Yet this comes with a price. In the least digitized restaurants, the food ordering marketplaces are implemented using tablets with a dedicated app, which is used to manage incoming orders. If the restaurant wishes to be seen in several ordering marketplaces, it gets one tablet per service. The problem grows if there are more disjointed ordering channels.
Solution: Integration with marketplaces
A more sophisticated ordering system comes with integrations with external marketplaces. The system works as a hub that makes a queue of orders from multiple sources to be processed by the kitchen staff.
By that, there is no need to use the tablets delivered by the ordering marketplace and to manually manage the ordering queue.
Solution: Omnichannel ordering
Apart from the marketplaces, the company benefits from providing customers with multiple ordering channels. These include online ordering, mobile apps, and ordering kiosks just to name the most significant ones.
Omnichannel ordering is one of the key strategies for dealing with queues. According to an American Express study, people are willing to wait no more than 14 minutes on average. Also, restaurants tend to lose up to 75% of their customers due to waiting times.
Providing them with multiple channels to place orders conveniently comes as a perfect way to tackle queues and let ones who will just place a particular order do that in the fastest way possible.
In the age of digital processing and sophisticated IT systems, every unnecessary manual work can be seen as an inefficiency. This is true also for restaurants, where manual work IS necessary – but not exactly in all processes.
Manual work is costly – it is both the cost of employee time invested in this particular activity and the cost of tasks that have been left undone – for example meal preparation, customer service or just keeping the locale clean.
Solution: Integration with POS systems
First and foremost, integrating the ordering system and POS system cuts out the middleman responsible for transferring the data from one system to another. By that, hours of work get automated.
Solution: Integration with external components
The POS system is only the tip of the iceberg when it comes to automation possibilities in the ordering process. The restaurant can use numerous systems to support its work – from booking tools to external contractor platforms to multiple payment gates.
Modern ordering systems like Ordering Stack use API to communicate with external systems. By that, it allows the restaurant to build a seamless and effective system from a set of external tools in a way that can be compared with building blocks. As long as the connection system is kept, new components can be added or removed.
Solution: Integration with Kitchen Display System KDS
Another challenge comes with the communication between the kitchen staff and the serving room staff. In the most traditional way, it is done by using cards sent between the employees. While it can work perfectly in a family-run single restaurant, in a fast food chain powered by connections with ordering marketplaces it is far from sufficient.
Integration between the ordering system and the Kitchen Display System makes the process fully automated and seamless.
Solution: Integration with kiosk
Another solution worth noting is the integration with digital ordering kiosks. Sometimes one just wishes not to use a personal device like a smartphone or tablet to place a casual order. On the other hand, it can be frustrating to wait in line to place an order with a cashier.
Digital kiosks are a solution for this challenge, providing the user with a standalone device that helps to place the order, has an endless amount of patience, and delivers much more information than the cashier can – for example, a full set of allergens in every meal served. This can be vital information for a large group of customers – up to 7% of UK children and 9% of Australian kids have some kind of food allergy.
Limited knowledge of customers
A typical ordering process provides little to no information about customers. At the end of the day and after three employee shifts, the owner is left with little to no information about a particular order, apart from the value and amount of goods ordered. By that, analyzing the way the customer buys is more challenging.
Solution: Analytics and data gathering
A modern and sophisticated system like Ordering Stack is enriched with a data-gathering component that provides the restaurant owner with all information it can harvest. By that, new analytics possibilities are available and the owner can, for example, get clear information on the efficiency of the promotions, and spot the best combinations of discounts or the best-performing meals for each time of the day.
The traditional ordering process has been the best that we had since time immemorial – or the beginnings of the food serving business. What was acceptable two hundred years ago is far from that in the XXI century.
Systems like Ordering Stack can help the company to deliver a truly digital and modern ordering experience to customers. If you wish to talk about how to achieve that and the benefits your business can get from it, don’t hesitate to contact us now!