Mobile order-ahead is growing faster than ever before, with digital ordering and delivery having grown 300 percent faster than in-store dining since 2014. Approximately 60 percent of Americans use digital ordering services at least once a week, with 59 percent of millennials’ restaurant interactions consisting of takeout or delivery.
Many of these interactions are through third-party ordering services, such as DoorDash or Grubhub. And although these apps represent a new revenue stream to their restaurant partners, they are not without controversy. Grubhub in particular has taken heat for its practice of adding restaurants to its app without asking, and at least two states — California and Rhode Island — are taking steps to pass legislation to stop this practice.
The March Mobile Order-Ahead Tracker® explores the latest digital ordering developments, including a surge in the U.K. mobile ordering market, the use of social engineering fraud to scam restaurants, and the effects of COVID-19, the disease caused by the coronavirus, on China’s mobile ordering industry.
The U.K.’s mobile ordering industry is particularly strong, with a recent study estimating that 7.5 billion food deliveries were made in the country in 2019. This amount is only projected to increase in the future, as 28 percent of U.K. consumers ordered out more often than they did the year prior. Takeout sales are also on the rise, climbing 11.4 percent in January 2020.
American quick-service restaurant (QSR) chains are also feeling the benefits of mobile order-ahead. Chipotle’s digital sales hit $1 billion for the first time during fiscal year 2019, a staggering 90 percent increase over the year prior. Much of this revenue was generated during Q4 2019, when growth surpassed 78 percent and accounted for one-fifth of the chain’s entire quarterly revenue. Chipotle’s digital ordering surge is echoed across the entire U.S. mobile order-ahead industry, which saw $26.8 billion in sales in 2019.
China’s mobile order-ahead industry, meanwhile, is getting hit hard by the outbreak of the coronavirus, which has forced many of the country’s ordering apps to shut down, while others have drastically altered their business. Meituan, for example, has instituted a new feature that allows delivery drivers to dead-drop food orders in a preselected location rather than interact with a potentially infected customer. Restaurants are being hurt by the outbreak as well, with many positioning guards at their doors to screen sick customers and other restaurants simply closing.
How Qdoba Safely Revamped Its Rewards Program, Mobile Ordering System
In-house ordering apps are commonplace among large QSR chains, with only those willing to innovate and take risks standing out from the pack. But one complication QSRs face when revamping their apps is ensuring that loyalty and payment data is kept during the switchover. For this month’s Feature Story, PYMNTS spoke with Adam Fox, director of digital experience and media for the Mexican fast-casual chain Qdoba, about how the QSR was able to ensure a smooth data migration process to the upgraded system.
Fraud targeting restaurants has been around as long as restaurants themselves, with bad actors deploying coupon fraud, credit card skimming, chargeback abuse and a host of other techniques to make a quick buck. One of the more pervasive fraud tactics is social engineering fraud, in which fraudsters assume fake identities and scam employees into giving up valuable information. This month’s Deep Dive examines how restaurants’ vendor and supplier networks make them particularly vulnerable to social engineering fraud and how they are leveraging security techniques like two-factor authentication to meet this challenge.
About The Tracker
The monthly Mobile Order-Ahead Tracker®, a Kount collaboration, offers coverage of the most recent news and trends and a provider directory highlighting key players across the mobile order-ahead ecosystem.