Building an online ordering system for a restaurant requires both domain knowledge and a high level of technical proficiency.
The COVID-19 outbreak has been a harsh experience for restaurants and the HoReCa industry in general. The pandemic forced people to avoid public gatherings, either voluntarily or by law. According to Statista-gathered data, the impact was devastating, with the number of seated restaurant diners reduced by 100% during the full lockdown in March and then recovering slowly, yet remaining far below pre-COVID levels.
Data shows that depending on the day, in November the number of diners varied from around 50 to 70 percent of those recorded before the pandemic. The situation is harsh for businesses.
On the other hand, food delivery is thriving during these harsh times, with Uber Eats doubling its revenue to \$1.2 billion according to Reuters. Therefore it is not an exaggeration to say that people are still willing to eat food prepared for them, but they are not so eager to enter a restaurant full of strangers, who are potentially infected with COVID.
That’s why implementing an online ordering system is the most reasonable way to go for restaurants. This guide will present all the steps involved in implementing one, including:
- Why to go digital at all?
- Preparation and internal auditing
- Important issues and functions of the restaurant system
- Picking the right approach
- Maintenance and development
Considering the fact that COVID-induced changes are likely to remain in place after the pandemic, delivering using your own online ordering system is more than reasonable.
But why to go digital at all?
COVID was a game-changer, yet it is not going to stay with us forever, at least not in the severe form of a lockdown. The business-as-usual way of operations will come back sooner or later. So one would ask – why to go digital at all, if it is a lot of effort and even more money?
The simplest answer is that benefits significantly outweigh costs.
New way of gathering data from restaurant diners
The digitization of business processes arms the company with vast amount of data. When analyzed and digged for insights, the data can be a rocket fuel for the company – the most efficient tool to spot the bottlenecks and opportunities.
Also, when armed with the data, the owner gets the unbiased feedback about certain elements of the business. There are multiple other factors influencing the effectiveness of a particular promotion – not only a discount. Digital tools used to measure and optimize business processes can deliver the exact information about the importance of the particular factor.
In the most basic scenario, the peak in the orders can be caused not by a vast discount, but by the working cycle of a nearby office – so adjusting the menu for the hungry office clerks looking for a good meal for a fair price would be a better strategy than to cut the margin to the bone. And this is only one of examples.
Upselling and automation work in restaurant
‘Would you like fries with that?” is an iconic question that lies in the foundation of an offline upselling. But a single waiter or a cashier has a limited assortment of tricks to upsell – and gets tired with the time
A digital selling app installed in a kiosk or a mobile device is tireless and chews unlimited amount of data for upsell opportunities – so it is asking each customer not about fires, but the product he or she will buy with the highest probability.
Also, a lot of work is automated by design in a digitalized restaurant. The information flow between the kitchen and the cashiers is cleansed from the noise, the cookers get the automated queuing system and there is a list of used goods built after each day, so the warehouse can be refilled accordingly. Particular processes to automate are depending on a particular restaurant and can vary – but nevertheless, reducing the amount of repetitive and dull job for human staff is always beneficiary.
Flexibility
The technology is evolving fast with new generations holding no sentiments toward the “old ways of doing things”. The younger the customers, the more automation and digitality they will expect.
The new technologies deliver new ways of selling – with some getting more popular than established ones. According to Business Insider, pizza chains witness the increasing popularity of digital channels when compared to phone ordering, that used to be a symbol of many popular pizza-delivering restaurants
Marketing
Last but not least, making the restaurant more digital is a game-changer for the marketing efforts. Building the online ordering system will shorten the way from the bran awareness to the moment of buying – sometimes drastically, from days to seconds.
Considering that, going digital transfers the marketing on the new level, delivering multiple advantages, yet boosing its costs significantly.
Step 1 – Preparation and the internal audit work in restaurant
Restaurant businesses are hard to transfer to the digital sphere – there is no way to eat food via the internet in the same way one can watch a movie or enjoy the music online. Yet it is false to assume that the industry is without its digital novelties.
However, the existence of a restaurant-tech can be both an asset and a challenge. Currently there are three types of restaurant:
- Fully digital – these companies have done all the work required to implement online ordering systems before the pandemic and their processes are fully digital. The impact of COVID-19, although harsh, is manageable.
- Partially digital – companies from this group have implemented some digital systems (digital POS system, interactive ordering kiosks, kitchen displays – you name it), yet these are digital islands in a sea of analogue workflows. For various reasons these companies have chosen not to go fully digital, be that savings or having a “if it ain’t broke, don’t fix it” mentality. One of the most common models of this stage is to forge partnerships with the most popular marketplaces and integrators, yet to do all the filling work manually. Thus, the employee needs to put in all menus and discounts over and over to multiple websites, update the information manually. Also, the company needs to cooperate with multiple partners to process payments in multiple channels.
- Not digital at all – this group includes restaurants where there are little to no digital systems and everything is done in a non-digital way or using generic tools like spreadsheets.
Depending on the level of digital maturity, the challenge of implementing the online ordering system can vary. Obviously, companies from the first group are in the best position and have an online ordering system already implemented. On the other hand though, the cutting edge of today is antiquated tomorrow and no company can be “fully digital” forever without progressing. Thus, staying at the technological summit requires constant upgrades, development and research.
When it comes to the latter two groups, the situation is more complicated. Partially digital companies have already crossed the Rubicon and entered the digital realm. Yet their systems can be unintegrated or even incompatible. When it comes to non-digital companies, they can implement new technology from scratch, entering the digital level with one giant leap.
But they probably have good reasons not to do so, from the high cost of a digital transformation to the traditional mindset of owners striving to preserve the mood and values of face-to-face customer service.
So before thinking about implementing an online ordering system, the owner needs to conduct an audit, be that internal or with the help of the external experts, this will show how ready his or her restaurant is.
The good news is that the restaurant software vendor market is diverse and one can find a solution that suits business scale and needs: from SaaS through open source and tailored solutions to a modern systems built from components.
Step 2 – Important issues and functions of the restaurant system
Conducting an audit should more or less clarify the vision of the system and the required functions..
Yet there are challenges to think about before picking a solution, with the most notable ones including:
- The delivery – there are multiple ways to tackle the problem of delivering the food to the customer. Yet before the delivery itself, one needs to manae several aspects of food delivery – the area, where the deliveries are available and the number of deliveries to process. Starting from third party companies, to external marketplace-based platforms to using integrators.
- Marketing – the web-based marketing is a totally different field than offline one, deliverign a heavy data-based approach supported by myriad of sophisticated tools. There is no digital ordering system that supports them all, so there are wise choices to do.
- Payments – a crucial part of ordering, yet a tricky one. There are multiple payment processing agents and picking one (or several of them) will be severely impactful on the commisions.
- Integrators or own ordering channels – while the company has many ways to optimize costs while going digital, using at least some services offered by integrators is a must. In fact, most of the problems described above are solve by various integrators like Uber Eats or Wolt, yet for a high commision.
Building a fully autonomous and independent system would be a huge investment. On the other hand though integrators often come with technical challenges as well as they are feeding on restaurant’s margin. So managing the services delivered by integrators is a new problem to be solved while going digital.
Strong players can keep sales at the expected level using only their own channels, but for smaller restaurants this approach may result in the loss of a significant number of orders. In this case, it is a good idea to maintain cooperation with integrators and, at the same time, develop own sales and marketing channels. Modern ordering systems support such approach.
When choosing the right system, one should pay attention to the functions such as:
Frontend features
With the knowledge gathered using the heuristics above, one should know which features will be crucial. Among our top picks are:
- Multimedial product presentation using images and videos – Depending on the type of the restaurant and further development, needs can vary, with 3D visualizations and augmented reality being just a few examples.
- Product configuration – french fries or fried potatoes? Pork, mutton or vegan burger? There are always multiple ways to prepare a meal, even if it appears hard to modify. However, delivering a special version or some additional ingredients is crucial for building a customer experience and improving margins.
- Delivery regions management – depending on the type of delivery, the system needs to manage costs depending on the region. It is natural for companies to offer better prices for customers who live nearby and have higher fees for long-distance deliveries.
- Cloud kitchen management – Assuming a large delivery network, at least part of points in the area operate in the [cloud kitchen]{.ul} model, with little to no space for on-site customers. Cloud kitchen provides a restaurant with multiple interesting options and agile management of order scheduling to unload overbooked restaurants is only one of the interesting paths available.
- Sets and boxes – selling a meal in a preconfigured set is a common practice for fast food companies, yet a lot of more traditional restaurants can benefit from it.
- Altering menus depending on conditions – having the menu hard-wired into the system is rarely a good idea. There can be ingredient shortages in a particular location, whilst the rest can still serve all meals. There can be geographical or time-limited promotions (happy hours for example) or multiple other types of triggered promotions or discounts. So the ability to define a set of triggers and conditions can be crucial. The ability to turn-off (either manually or automatically) some menu positions can boost the customer experience significantly by reducing the number of disappointments.
- Multiple types of delivery – in the same way a company can deliver a different offer based on several conditions, it can also be different regarding the type of delivery. For example a company can offer discounts for using a particular channel that offers lower commissions – a free drink when the user wants to pick up the order, or other ways to promote a low-commission approach.
Backend features
It would be foolish to think that the online food ordering system only takes care of client-related functions. A good restaurant system also takes care of all the back-end work that is crucial to a restaurant\’s operations. Among the many important features we consider these the most crucial:
- Delivery management – with multiple ways to order food and an increasing number of orders, manual work would be both ineffective and prone to mistakes. Considering that, automating the delivery management performed by the system is a must-have feature. When thinking about this aspect, the company needs to consider delivery using its own couriers, external providers (like Uber Eats) or any kind of hybrid model.
- Loyalty management – a good loyalty program is not only a way to keep the customer for a longer time. It is also a great source of customer data for insight-mining. According to the Criteo data up to 65% of customers actually enjoy loyalty programs. Also, Forrester data insists that only 61% of online businesses have the right metrics to measure the omnichannel experience. Running a proper loyalty program is the best way to deliver and measure the customer experience across all channels, including digital ones. Apart from loyalty program data management, the system needs to offer multiple ways to collect loyalty points or other discount tokens.
- Marketing solutions – the digital channel offers a myriad of marketing ideas using dozens of solutions and models. Google Ads and social media marketing are just the tip of an iceberg, naming all of them is neither wise nor necessary. On the other hand, though, finding a solution that supports multiple marketing tools and possibilities. Enabling the user to place an order with a phone call directly through Google Ads is just one idea off the top of the head.
- Data gathering and analysis – last but definitely not least, a good online ordering system collects data about customers, the channels they prefer, the devices they use, their location and the best-performing promotions to name just a few. To ensure the system outputs actionable and valuable data, the user needs to have a good deal of expert IT knowledge.
Considering the complexity of the online ordering system, the only reasonable way to implement the right system is to find a trusted and experienced partner. Backed up by his or her knowledge (be that an institution like 3e software house or a skilled individual), the restaurant owner can be sure that there are no hidden traps and challenges looming deep within the system.
Step 3 Picking the right approach
To make things even worse, there is no single approach toward developing these systems, even assuming their relative similarity. In fact, having all the features listed and the vision of the system complete, the company needs to cafe the greatest of challenges – choosing a right solution and vendor.
A typical restaurant has neither the capabilities nor the need to deliver the solution with own power – the restaurant is about serving the food, not coding in the same way the software house or a dev shop is about delivering the code, not pizza.
Vendors come with their technology of choice they focus on. Among the most popular approaches from a technical point of view there are:
- 100% tailored approach – in this situation, the solution is built from scratch, tailored and adjusted to the needs of a particular client.
- Pros: a 100% tailored is… well… 100% tailored with no need to modify the processes or the business to fit the procedures built in the software. The company can save its unique and distinguishing processes or stick to the most exotic procedures and it will be supported by the tech. Also, with the organization that is big enough, the savings that come with process automation and integration stack to impressive amounts. Finally, a good vendor can adjust the system to the client’s needs in an agile way
- Cons: It works only for larger organizations. Smaller ones neither need nor have knowledge to build a fitting system. Also – it is costly. And there are multiple costs to count in – , the infrastructure, maitanance and the SLA among the most obvious ones. So it is in fact the most costly approach exiting.
- Open source solution – open source software helps companies avoid the vendor-locking and delivers a full control over the code, at least theoretically.
- Pros: the company is not vendor-locked, so if there are problems, the restaurant can just change the tech partner. Also, there is a large base of developers, from freelance coders to large agencies.
- Cons: the code is free, but the coder’s work is not. Tailoring and grinding the code to the company’s needs can be time-consuming and surprisingly costly. Also, despite being open-source, the code is not flexible to infinity, so there is a risk that some processes will never be supported. Also, there is a need to pay for maintenance and keeping lights on. Last but not least – when the system is developed by the community, there are neither predictability nor the way to influence the direction. There is only a hope.
- Cloud-based Software as a Service – a modern approach, when the user pays a monthly fee for using the service. The fee differs depending on the vendor, client and type of the software, as do the features.
- Pros: this model reduces the client company’s involvement. In this model the client has neither has to deal with code nor maintenance. Also, the solution usually works out-of-box, without the need to adjust or configure it.
- Cons: Usually cloud-based systems have no flexibility at all, delivering a preconfigured packages. With an ambitious development plans (or a fast development at all) the system can get too tight sooner than later.
- Component approach – . A novelty on the market is the component approach, which provides flexibility on a level comparable to dedicated software, while reducing the associated cons. OrderingStack is an example of the component restaurant system – the user can either implement the default configuration or build a desired system from a set of interconnective blocks.
- Pros: there is a high flexibility of 100% tailored approach combined with the stability and reliability of cloud-based systems. In fact, this type of software combines all the best from the systems above
- Cons: again, this type of approach, with all the personalization and client-centrism comes with multiple costs, starting from the customization , to maintenance and SLA.
Step 4 – Maintenance, support and development
Once the company has implemented the system of dreams, the work is not fully done. In fact, it is only the beginning. The new, online channel, once implemented, will soon be profitable.
However, much like an offline restaurant needs frequent repairs and replacing broken equipment, the online system needs to be updated, bugs fixed and new features delivered.
Depending on the company size, there are three ways to go:
- In-house developers – for a large company having some coders on a payroll to develop the system and maintain it can be a good way to go.
- External experts – most companies will find the support of a software house a good pick, with regards to value for money, the expertise of employed specialists and the overall effect of their work.
- Hybrid model – probably the most efficient one, where in-house employed IT specialists closely work with an external partner.
Also, this part holds a huge portion of costs to be accounted for when thinking about the systems total cost of ownership. These costs, stacking and amassing, are the main reason why most online ordering systems are available in the SaaS model. The cost of constant updating, bug-tracking and maintenance can be just too big for a small company, so delivering a cloud-based solution that multiple companies pay for can be the way to scale it up whilst keeping costs at bay for both the client and the vendor.
Summary
An online ordering system is a sophisticated and complicated piece of software to implement. Whilst similar, it significantly differs from typical e-commerce with a relatively simple delivery process.
Putting this guide into a strong knowledge pill, there are challenges to solve and profits to get from going digital.
Challenges:
- Dealing with delivery – external partner? Integrators? Own delivery man? None of each?
- Customer service – how to queue the orders? How to process payments effectively? How to process claims and keep the customer satisfaction a priority with no human staff involved?
- Picking the right solution – which one to pick? What are key features? On-premise or cloud based one?
- Maintenance – what is a total cost of ownership of the solution and the new model? Will it be as profitable as it looks at first glance?
Opportunities:
- Reaching new customers – either by online ads, marketplaces or any other new tools available after going digital
- New marketing opportunities – with a strong online presence, the company can get in touch with new target groups or better target existing ones
- Optimization – the digital restaurant provides new ways to cut the costs and max-out the profits by analyzing the gathered data
- Upsell, cross-sell and so on – the digital restaurant gets the access to a plethora of new functions that boost the sales and help to engage the customers
- Building loyalty – harnessing the power of mobile technologies and the data analysis results in delivering a truly convenient and effective loyalty programs
- Getting future-proof – with the increasingly digital world, the new services for restaurants will emerge. Being digital enables the company to adopt new trends further and use them for its own benefit.
If you wish to talk more about the system construction, its features, strengths and weaknesses, don’t hesitate to contact us now!
