ResTech

Mobile Order-Ahead: It’s Not Just For Restaurants

Starbucks Mobile Pay Reaches China

The growing popularity of mobile order-ahead is hardly news in the restaurant industry, where customers — especially millennials — crave the convenience, speed and personalization of a mobile ordering experience both in quick-service restaurants (QSRs), coffee shops and fast-casual dining environments.

Here at PYMNTS, we’ve followed the trend closely, both in our regular coverage and in our Mobile Order-Ahead Tracker. We know that in addition to ease, diners love the control and choices presented to them by a mobile ordering platform. In fact, many value that convenience above even the security of their payment information.

It comes as little surprise that younger generations are using their smartphones in restaurants, bars and coffee shops and expect to be able to order delivery or takeout from their mobile devices. A 2016 Oracle Hospitality survey showed 39 percent of these young consumers are already using mobile order-ahead, and 41 percent want to use it even more liberally — for instance, to order from their tables within a restaurant.

As millennials and Generation Z come of age, their wish becomes the restaurant industry’s command — as it must, if the industry hopes to hook and retain these young customers. Data shows these demographics dine out more often than their parents and grandparents did. There’s no denying that they’re the future of the industry.

But could mobile order-ahead technology have a place in another industry? Point-of-sale (POS) solutions provider Wi-Q thinks so. The firm believes hospitality is the next frontier for mobile order-ahead and did the research to prove it through a partnership with hotel and restaurant news source The Caterer.

Hospitality has been slow to adopt this technology, with 80 percent of survey respondents reporting that they did not yet offer it — despite recognizing the growing consumer demand. Only 29 percent had plans to invest in mobile ordering technology in 2017. Yet 77 percent believed mobile order-ahead offerings could improve customer experience, and marked that as the number-one benefit they would hope to reap by implementing such technology, even above increasing revenue. Hospitality business owners predicted other benefits, too, from increasing staff efficiency to gathering customer data.

If hotels like the idea, and their customers want the option, then why aren’t they offering mobile order- ahead services? A recent whitepaper by Wi-Q digs into some of the reasons.

The top barrier to entry is the capital cost of introduction. This is a valid concern, and not simply a misconception about the technology. A native mobile app is indeed costly to develop, but as Starbucks, Domino’s and other QSRs and coffee shops have shown, the return on investment can be well worth it.

When done correctly, a native mobile app can generate higher engagement and loyalty among millennial populations — again, see Starbucks and Domino’s — and the investment is recouped faster because the same mobile app is spread across thousands of individual locations all profiting from the same tech.

Other factors that give hoteliers pause are integration with their existing electronic POS system, maintenance and ongoing costs, management and staff training, payment integration and customer uptake, according to Wi-Q’s survey.

To be fair, Starbucks and Domino’s do have a couple advantages, aside from sheer scale, that are not shared across the board — even within food services — and certainly not in hospitality. First, the business model at these two restaurants is extremely standardized in a way that is atypical for the industry.

“Hospitality is inherently a more difficult industry to standardize and construct within the framework of a native mobile app,” Wi-Q concedes in the whitepaper. However, “Hospitality providers prioritize service, and this requires them to be agile in all facets of their business, including the technology they integrate into their operations.”

Second, Starbucks and Domino’s both had the advantage of being early movers in the mobile ordering category, giving their apps a “wow” factor that is hard to replicate in the saturated 2017 app economy. On the other hand, since so few have adopted this tech in the hospitality world, that “first-mover” advantage may still be ripe for the picking in this space.

Wi-Q believes cloud-based apps will be the next wave onto which hoteliers will catch. They can be accessed via any internet browser on any device and offer most of the same functionality, and a business can integrate them with any number of third-party application programming interfaces (APIs) for greater flexibility, data collection and analytics.

When guests log into the hotel’s free WiFi, suggests Wi-Q, that’s an opportunity for the hotel to redirect them to a landing page featuring an interactive menu or other features. After all, those guests are already in the venue and already looking at their devices.

In addition, a cloud-based app removes the friction of asking guests to download a mobile app and learn to navigate it before successfully placing an order. It also slashes those high start-up, maintenance and development costs that gave so many business owners pause.

“If the action is quick and simple enough, it will not disrupt existing routines or expectations,” Wi-Q concluded. “By making the online ordering menu instantly accessible on any internet browser, consumers can place an order within a matter of seconds and then get back to their conversation, entertainment or pay their bill and continue to the next venue uninterrupted. The technology gives consumers unprecedented control over their own experience.”

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