Retail

How Mobile Order-Ahead Drives Innovation In Restaurant Design

mobile ordering food

As diners can order a wide range of cuisines from their smartphones, mobile order-ahead continues to become more popular — and quick-service restaurants (QSRs) are taking note. The technology is changing the design of restaurants, as some coffee chains are rolling out pick-up only locations while others are refreshing stores with pickup windows.

Large chains like Dunkin’ and Starbucks were among the first to embrace mobile order-ahead technology. According to the PYMNTS Mobile-Order Ahead Tracker, however, even smaller chains such as Minnesota-based Caribou Coffee are also harnessing the technology by creating mobile-order ahead apps as well.

From Chipotle Mexican Grill to DoorDash, quick-service restaurants and food delivery platforms are making it easier for diners to order their favorite foods — and earn rewards for their loyalty. These are some of the ways that these players in the restaurant industry, among others, are harnessing the power of mobile order-ahead technology:

The share of consumers who expect restaurants to have digital ordering apps is 70 percent. And brick-and-mortar restaurants are launching new store designs amid growth in their digital business. Chipotle Mexican Grill, in one case, is piloting an evolved design “to better support its billion-dollar digital business” per a recent announcement from the company in December. Walk-up windows and premium placement for digital built-in pickup portals will allow diners to get their food more efficiently than they were able to in previous times. Chief Technology Officer Curt Garner said in the announcement, “By better suiting our restaurants to accommodate the digital business, we’re able to finalize orders more effectively and provide a better overall experience for our guests.”

The portion of car owners who use connected devices to order food while driving is 35 percent. At the same time, restaurants are enabling new mobile options that let consumers place orders from their cars. Domino’s Pizza, in one case, was bringing in-car ordering to new vehicles via a pre-loaded ordering platform dubbed AnyWare. The offering was to be powered by an automotive commerce platform for connected cars called Xevo Market and would allow diners to use the touchscreen on their vehicles to place their orders. Domino’s Director of Digital Experience Chris Roeser said in a March announcement about the in-car ordering offering, “This new AnyWare platform will make ordering pizza easy, whether you’re in the car waiting for the kids to finish soccer practice or you’re on your way home from work.”

The portion of restaurants that have chargeback rates of more than 1 percent is 10 percent per a Kount and Chargebacks911 study. The joint report also noted that 28 percent of food and beverage industry respondents had chargeback rates ranging from 0.5 percent to 1 percent of transactions. According to the PYMNTS Mobile-Order Ahead Tracker, “This may seem like a small amount, but it is a significant increase from five years ago, when restaurants reported no chargebacks at all.” The report also pointed out that the rise in chargebacks was likely due to increased mobile orders. In the past, most food orders used to be made and finished in restaurant spaces. For that reason, problems can have an immediate resolution if diners, say, received incorrect orders.

The value of the most expensive order placed on DoorDash in 2019 was $5,000. And the food delivery platform recently notched additional funding — an investment of $100 million per reports in November. DoorDash, as it stands, is backed by investing giants such as Sequoia Capital and SoftBank Group. The new capital was reportedly courtesy of the T. Rowe Price Group. As of a November, the company had already reportedly raised about $2 billion and had been on the receiving end of a Darsana Capital Partners-led $600 million funding round in May. It was also noted that DoorDash comprises approximately 35 percent of the food delivery market, making it the most dominant firm in the space per reports in November.

The amount that Uber Co-Founder Travis Kalanick’s CloudKitchens secured in funding from Saudi Arabia’s sovereign wealth fund was $400 million. CloudKitchens, for its part, is viewed as a way to tap into the increasing market for delivery. The startup buys rundown buildings that are close to the center of cities and turns them into “ghost” kitchens that restaurants can rent to make food just for delivery. It also operates its own restaurant concepts that are delivery-only with names such as Excuse My French Toast. It was previously reported that Kalanick himself had funded CloudKitchens with his Uber share proceeds. The company is said to be growing quickly around the world and Saudi Arabia’s Public Investment Fund (PIF) has reportedly been instrumental in that growth.

From CloudKitchens to Chipotle Mexican Grill, tech firms and restaurant chains alike are making it easier for consumers to order their favorite foods through digital technology. At the same time, however, restaurants are driving innovation with new approaches to loyalty programs as they tap into mobile order-ahead technology to keep digital diners coming back for more.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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