Key Considerations for Online Ordering in 2024

As the new year gets rolling, restaurants are aligning their guest engagement strategies to invest in essential growth channels. One channel that operators cannot ignore is online ordering. NRA’s 2030 Actionable Insights report projects online ordering will grow to $1.2 trillion by 2030. Latest Paytronix data shows digital orders are up 50% compared to their pre-pandemic levels, while in-store orders are around 35% below that same level. Throughout 2022, digital orders rose to 25-30% of all orders, up from 10% of all orders pre-pandemic. In many ways, the pandemic accelerated the adoption of online ordering and now that it’s here to stay, restaurants need to find long-term, scalable solutions.

Today’s online ordering solutions fall into three broad categories. There’s an add-on solution available through your POS, third-party marketplaces like UberEats or DoorDash, and there’s standalone first-party through a dedicated provider. Each of these solutions has unique benefits and disadvantages, but it’s important to stay focused on brand goals and consider efficiency, when choosing the solution for your restaurant.

POS Add-On

Using your point-of-sale system’s online ordering solution is cheap and easy to stand up. It’s a great option for smaller operators who cannot handle the operational demands, or maybe the fees, of a third-party marketplace. And most guests will know how to use it, having encountered the same solution from other brands.

But a POS add-on leaves much to be desired from a brand and value standpoint. There’s no opportunity to differentiate your ordering experience, blending in brand design or unique menu modifications or ordering flows. This solution might also leave value on the table.

Third-Party Marketplaces

Third-party solutions offer similar benefits to a POS add-on with added market exposure and outsourced operations being additional perks. But the third-party marketplaces provide minimal opportunity to retain customers as the customer is constantly incentivized to shop around the market, as opposed to repeatedly visiting your brand. For that reason, third parties also share very little customer data. Compounding that, third-party marketplace fees add up, making it an expensive solution over time.

Standalone First-Party

A first-party online ordering system enables you to craft the customer experience, own your data, and maximize your return on investment. If launched from a single platform or integrated provider, you can leverage the full stack by adding loyalty, messaging, and CRM tools to improve the online ordering experience. Though it’s worthwhile, an in-house solution takes some work to launch and maintain. Depending on your tech stack too, it can simplify or complicate operations. Make sure you consider the solution that simplifies rather than complicates your tech stack.

Evaluating Cost of Ownership

When you’re choosing a solution, keep in mind that the sticker price is only the tip of the iceberg. Beyond that, consider the following:

• Operational expenses: What investments will you have to make to support your staff and make their lives easier?
• IT maintenance: What’s required to keep the solution running?
• Marketing expenses: How will you promote your solution to your customers?
• A digital agency for the front-end experience: Will you need to partner with an app design agency to help brand the front-end experience?

Making a POS or Third-Party Solution Work

For many restaurants, a POS add-on or third-party solution makes perfect sense. Your goal might be to simply get your business online, as opposed to building out a personalized, branded, digital experience. For those operators, here are a few tips to making these solutions work:

• Invest in a third-party marketplace management tool: Avoid the “tablet farm” and use a software that integrates to third-party apps to send orders directly to your POS.
• Mark up your menu: Everyone does it. Offset third-party fees by inflating your menu prices.
• Promote loyalty and leverage integrations: Wherever possible, integrate your POS add-on or third-party solution to aspects of your tech stack that help you develop relationships with customers. This includes loyalty, messaging, and CRM tools.
• Negotiate the contract and plan to scale: Ultimately, you should be planning to scale to a first-party solution. Even if that’s not in the immediate future for your brand, making smart technological decisions and building relationships with customers will boost your bottom line in the meantime.

The Shift to First-Party

We’re seeing more brands shifting to first-party solutions in the wake of the pandemic. Among many reasons for the change, many of our clients say the fees are unsustainable, they wanted to boost customer retention and trust, and streamline their operations.

Paytronix data shows investing in customers through a first-party solution is worth it. First-party guests order more frequently, tip higher and more often, and spend more per order. They’re also 35% more likely to be a member of your loyalty program.

Key Features of a First-Party Online Ordering System

When looking for a first-party online ordering system, here are a few key features you’ll need. For more information, check out our blog, What Is An Online Ordering System For Restaurants?

• POS integration with inventory management: At a minimum, your online ordering solution has to work flawlessly with your POS. A bonus feature to consider is an inventory management tool that can keep item availability up to date on your menu.
• Website and app integration: Make it easy for guests to access your menu through a website and/or mobile app.
• Menu management: You need to be able to easily update your menu to reflect out-of-stocks or price changes.
• Order customization: If you know guests want to order their way, let them! With an order customization feature, you can provide guests with the same flexibility and personalization they’re afforded on-premises.
• Secure payment: For any digital transaction, secure payment is key to keep customers safe.
• Branded experience: Make the online ordering experience unique to your brand and memorable for guests.
• Full-stack integration: Ensure your online ordering solution fits in with the rest of your guest engagement tools to maximize returns.

Evaluating Online Ordering Success

Once you have an online ordering solution, it’s crucial to monitor its success and always address areas of concern.

There are two ways to evaluate the operational success of your online ordering system. The first way is a basic online ordering funnel, displayed below.

 Use this funnel to identify issues plaguing your solution. Good completion rates will look different for different brands, but identify the numbers that are growing your bottom line, then monitor the rates to ensure they’re staying at or above those level. If any completion rate drops below a satisfactory rate for your business, troubleshoot until you identify the issue. Common issues include website crashes or bugs, a tedious checkout flow, or a difficult-to-find website.

Beyond the basic funnel are qualitative considerations such as consumer awareness of your online ordering and the quality of the guest experience. Measuring these factors with market research and guest surveys can help bring your online ordering to the next level. Improving these aspects of your online ordering experience often requires cross-team collaboration and leveraging your service provider. That's where Paytronix can help!

Building For the Future

The restaurant industry is constantly evolving with new technology and ever-shifting consumer preferences. But you don’t want to constantly reconfigure your tech stack to accommodate the latest industry trends and strategies. That’s why it’s crucial to build now, for the future. Your tech stack should be nimble and scalable, allowing you to seamlessly add on features and tools to stay ahead of your industry and maximize the value of your customer base.