Why mobile pre-order is more than just payment technology.
In one of the previous articles, we, in the PayOnline processing company team, considered payment technologies used by catering companies around the world. The author of this material has narrowed the topic and spoke on the example of the American market about the trends in the field of pre-order in catering, focusing on the role of mobile technologies.
In 1948, a pre-order was born in the In-N-Out auto-café chain. Its founders, Harry and Esther Snyder, at that time were dilettantes in the wilds of fast food business, but wanted to do something significant in their lives after the end of World War II. The restaurant business had already played a certain role in their lives: Harry met Esther at the establishment she managed after returning from service in the navy.
')
The idea of ​​"fast food" by that time was no longer new. Earlier all of this institution opened A & W in 1919, but the very first eatery chain, which applied a standardized process of cooking, menus and lack of staff to increase efficiency and lower prices, was now safely forgotten White Castle. The establishments of this brand were the first places in history whose customers could come, see how the ordered food was prepared and come out with a package of burgers in hand.
However, it was the love of consumers for their cars that made Snyder and their predecessors reconsider their attitude to the order processing process, giving consumers the opportunity to decide for themselves exactly where they would like to eat the purchased dish.
The machines, of course, played the role of a means of access to the consumer, an innovation that made possible the appearance of the order of fast food 1.0, with all sorts of variations on the theme of “drive-ins” so characteristic of him and attractive waitresses in short skirts serving them. The latter were more than just marketing bait and innovation: they played a key role in the institution, helping to reduce costs and improve operational efficiency. Sending waitresses to a car for receiving or delivering an order was the best way for such a model to serve as many customers as possible, because it allowed keeping fewer employees on the staff and reducing the geographical presence of the brand. The lack of rooms with seating places and ordinary waiters in combination with a large number of attendants and a standard menu of burgers, french fries and cocktails led to greater customer satisfaction and higher margins compared to other types of catering establishments.
However, Snyders wanted to develop this idea and relied on the growing love of American consumers for cars and their use in everyday life.
After the end of the war and thanks to the progress in the automotive industry, cars have ceased to be a luxury for rare lucky ones. By the end of the 1940s, more and more people acquired them, and as a result, by the end of the 1950s, almost 40% of American families had their own car. And actively used it.
So Snyder had their big idea, as a result of which the order of fast food 2.0 appeared for the first time. The scheme in which drivers came to the parking lot and the waitresses took their order from them was replaced with a new one: customers made orders in advance and picked them up a few minutes later without any need to get out of the car and enter the establishment. The entrepreneurs considered that this combination, on the one hand, would make visiting the establishment more comfortable for the consumer, and on the other, it would allow for greater operational efficiency, provided that the order is made on the basis of a pre-arranged menu, and its preparation will not be difficult for kitchen personnel .
As a result, having invested in two-way communication systems, In-N-Out became the first network that allowed customers to stop, explore the menu, make an order, drive a few meters forward to the window to pay for it, and leave with a ready order, having dinner at their place where including at home. This system could serve a large stream of customers at any time, including during the loaded lunch hours. More than traditional establishments with tables and chairs could cater for.
The main task, solved by Snyders about 70 years ago, does not lose its relevance today, because it is the innovation that is taking place now in the field of fast food and fast food. These innovations are aimed at optimizing and increasing the convenience of placing and receiving an order, especially during peak hours of canteens.
And the main reason why many establishments have been investing in the introduction of this innovation for several years now is not how consumers pay for food.
The thing is how the ordering process takes place.
This is the same problem that Snyders saw and decided in 1948.
The cost of eating out since 2000 has steadily increased. In the early 2000s, only 39% of food expenses accounted for visiting establishments. By the end of 2016, this figure increased to almost 44% and, most likely, will continue to grow.
The total spending on fast food is also growing. Of all the money spent on food outside the home last year, $ 228 billion fell on it, and this figure exceeded the result of 2015 by 5.3%.
As in the 40s or 50s, when the idea of ​​fast food was just getting into fashion, convenience and price remained decisive factors for the consumer.
Today, representatives of the most diverse groups of the population: from family members with two sources of income and millennials, to single parents or pensioners, they simply cannot resist the convenient opportunity to drop in or drop in at McDonald's, Taco Bell, Chick-fil-A or any other favorite place and Take a good portion of food for a great price. Often they do this several times a week.
Analysts report that 7% of Americans eat at fast-food establishments on a daily basis, 50% attend fast food restaurants twice a week, 70% do it three times a week, and 80% - once a month. The restaurant business segment, which previously accounted for the most bad jokes about the dubious quality of food these days, brought the game to a new level, making its products more “healthy” and adapting the menu to the changed appetites of American consumers, while maintaining prices for acceptable level. The American consumer satisfaction index in the fast-food sector was 79 points out of 100, which is 2.6% more compared to the previous year.
Millennial clients, so desirable for many markets, are one of the key populations that fast food businesses want to attract. And for good reason: the millennials often eat in fast foods and other similar places. According to research, representatives of this generation visit them three or four times a week, leaving 44% of their budget allocated for food in such establishments.
In the meantime, the fast food industry faces many obstacles.
First of all, competitors arise from all sides. Local and regional networks of ethnic restaurants, mobile eateries and simply new eateries appear in large cities and small towns, in many cases seeking to satisfy the demand for healthier fast food options. Grocery stores have already expanded their product range to include departments with ready meals for lunch and dinner. Even the pharmacy giant Walgreen's is not far behind: the store next to our office in Boston offers frozen yogurt and sushi, as well as a whole set of sandwiches and salads. After its opening, Amazon Go, according to some information, will offer a similar range of products.
At the same time, supervisors introduce new instructions, the adherence to which leads to an increase in operating expenses. Labor costs are rising, along with spending on health care, and federal regulations to increase minimum wage rates lead to an increase in business expenses. Consumer expectations are also rising regarding the preservation of product quality, without a perceptible price increase, and this is another pressure factor.
Labor costs account for about 30% of the budget, and in some institutions and more. Approximately at the same level are the costs of purchasing products. Against this background, fast-food chain operators are looking for help from technology and innovators to solve one of the urgent problems - simplifying the ordering process for the consumer.
The operator of gas stations and round-the-clock mini-markets Sheetz was one of the first companies to offer the possibility of ordering food using touch screens in 1997. By providing consumers with images of what they could order, the Sheetz managing director said at the time, the company immediately saw an increase in orders. Managers of the company also found that a similar presentation method simplified the introduction of new positions to the menu and increased their sales. Images of new products on the screen spurred the interest of visitors and made it possible to quickly identify the most popular ones. Integration with POS-terminals accelerated the process of payment and ordering.
Rewinding a couple of decades ahead, today we are seeing tremendous technological progress and the emergence of new data access devices.
Online orders using personal computers and mobile phones had the same effect. A few years ago, the marketing director of Eat24 said that online orders allow restaurant operators to squeeze the most out of their budget, because they allow people to be reminded that they can order more than they ordered the last time. For example, if a customer previously took a pizza and coke in a store, now, thanks to online orders, he can take the same pizza along with snacks and soda.
For Sheetz and for Eat24, the main advantages were an increase in the average order size, additional sales due to the emergence of new customers wishing to try something new and an increase in operational efficiency due to the ability to serve more customers and process more orders with fewer staff.
However, it is the combination of mobile devices with applications and payment integration that today takes the concept of a remote order to a whole new level. It allows you to take the same model of the three components of success, on the basis of which Snyders built their business in 1948 and “pump it up with steroids”. As a result, we get exceptional efficiency, excellent food at good prices and an innovative point of contact with the consumer. And all this becomes possible just at a time when fast food establishments so need help in increasing net profit.
Nowadays, the introduction of mobile pre-order allows you to stimulate consumer activity, helping operators to attract new customers and allowing them to increase the efficiency of delivery of food ordered in this way, and reducing the time it takes the customer to issue such orders. Mobile pre-order and payment open up a whole new channel that allows you to serve more consumers per hour than can be done in an attempt to push people through the queues in front of the cash registers in traditional stores. The “second restaurant”, as Chipotle’s CFO once called this phenomenon, increased sales of some stores of the chain by $ 500 a day, and in others - several times more only by increasing the productivity typical of this approach.
The concept of mobile pre-order also encourages a rethinking of the geographical imprint. Revising the ratio of the area allocated for processing offline and online orders, allows you to free up the operating budget for other needs, reallocate labor costs, and perhaps even refuse to hire employees in general. Starbucks launched a pilot project for a mobile order store in Seattle. The company is trying to figure out how many employees are required for productive order processing and whether they are needed at all. McDonald's is testing the concept of a centralized auto cafe, which also serves only mobile pre-orders, which has already led to a decrease in the number of staff in other local establishments of companies.
Some variations on the theme of mobile pre-order and payment, using the business model of subscriptions, can lead to a fivefold increase in the volume of orders processed per hour, which allows even to offer dishes at lower than usual prices.
More advanced applications for mobile pre-order and payment are able to remind users of the need to make an order and apply intelligent forecasting technology to offer the consumer those menu options that they might like. The same smart technologies can be used for planning shifts of employees, special offers and additional customer acquisition during periods and days of lull. Such platforms may even open up new opportunities for profit, helping brands to promote their proposals at a time when the consumer is going to make a decision.
Of course, the ability to build payments into such an experience is the very element that, on the one hand, makes this experience so incredibly attractive and convenient for the consumer, and on the other, real for implementation on the operator’s side. Just as Uber removed the obstacles, first providing a reliable taxi service, and then a convenient way to pay for travel, mobile pre-order and payment eliminate similar obstacles for customers and operators of establishments.
The author spent the whole excursion into history for several reasons.
Firstly, everything new is well forgotten old. Times, as well as technologies, can change, but the problems that business faces today, as practice shows, have always been and will be relevant. This means that when you think about solving the problems of your clients, whoever they are and in whatever segment you work, it is often useful to think carefully about the fundamental difficulties that they face and that you need to decide in order to maintain a positive development trend. business. After that, you can think about where the integration of payments can take the price-quality ratio to a whole new level.
Secondly, the elimination of such difficulties of a higher order is what causes major changes in the traditional segments of the industry. In the restaurant sphere, innovative changes in the approach to ordering influenced the attitude of consumers to the very process of visiting establishments during meal hours, and soon these changes would affect any meals outside the house. Very soon, consumers will begin to consider mobile pre-order and mobile payment as a standard service when visiting similar establishments.
Restaurant operators, or rather, the most savvy of them, focused entirely on keeping abreast of progress. According to data provided by Chipotle's CFO, 66% of orders processed by the network are “eaten” outside their restaurants. At the same time, only 7% are made online or from mobile devices, and the company sees only positive aspects in the hard work of transferring a larger number of them outside the institutions.
Just as Snyders did in 1948, demonstrating to consumers a completely new way of ordering and consuming food, modern innovators provide advanced restaurateurs with the tools to create and put into practice an approach based on efficiency, food quality and new points of access to services. Today, consumers are mostly eager to use devices: mobile phones, tablets and voice assistants, such as Alexa, Allo, Siri and Bixby, as well as applications, such as Waze, that allow you to make mobile pre-orders in Dunkin 'Donuts.
As for the “device” from which the whole story began - the car - it is also going through an update today, turning into a “smart” car connected to the network, once again reminding us that everything new is really well forgotten old.
Where did the mobile pre-order come from
In 1948, a pre-order was born in the In-N-Out auto-café chain. Its founders, Harry and Esther Snyder, at that time were dilettantes in the wilds of fast food business, but wanted to do something significant in their lives after the end of World War II. The restaurant business had already played a certain role in their lives: Harry met Esther at the establishment she managed after returning from service in the navy.
')
The idea of ​​"fast food" by that time was no longer new. Earlier all of this institution opened A & W in 1919, but the very first eatery chain, which applied a standardized process of cooking, menus and lack of staff to increase efficiency and lower prices, was now safely forgotten White Castle. The establishments of this brand were the first places in history whose customers could come, see how the ordered food was prepared and come out with a package of burgers in hand.
However, it was the love of consumers for their cars that made Snyder and their predecessors reconsider their attitude to the order processing process, giving consumers the opportunity to decide for themselves exactly where they would like to eat the purchased dish.
The machines, of course, played the role of a means of access to the consumer, an innovation that made possible the appearance of the order of fast food 1.0, with all sorts of variations on the theme of “drive-ins” so characteristic of him and attractive waitresses in short skirts serving them. The latter were more than just marketing bait and innovation: they played a key role in the institution, helping to reduce costs and improve operational efficiency. Sending waitresses to a car for receiving or delivering an order was the best way for such a model to serve as many customers as possible, because it allowed keeping fewer employees on the staff and reducing the geographical presence of the brand. The lack of rooms with seating places and ordinary waiters in combination with a large number of attendants and a standard menu of burgers, french fries and cocktails led to greater customer satisfaction and higher margins compared to other types of catering establishments.
However, Snyders wanted to develop this idea and relied on the growing love of American consumers for cars and their use in everyday life.
After the end of the war and thanks to the progress in the automotive industry, cars have ceased to be a luxury for rare lucky ones. By the end of the 1940s, more and more people acquired them, and as a result, by the end of the 1950s, almost 40% of American families had their own car. And actively used it.
So Snyder had their big idea, as a result of which the order of fast food 2.0 appeared for the first time. The scheme in which drivers came to the parking lot and the waitresses took their order from them was replaced with a new one: customers made orders in advance and picked them up a few minutes later without any need to get out of the car and enter the establishment. The entrepreneurs considered that this combination, on the one hand, would make visiting the establishment more comfortable for the consumer, and on the other, it would allow for greater operational efficiency, provided that the order is made on the basis of a pre-arranged menu, and its preparation will not be difficult for kitchen personnel .
As a result, having invested in two-way communication systems, In-N-Out became the first network that allowed customers to stop, explore the menu, make an order, drive a few meters forward to the window to pay for it, and leave with a ready order, having dinner at their place where including at home. This system could serve a large stream of customers at any time, including during the loaded lunch hours. More than traditional establishments with tables and chairs could cater for.
The main task, solved by Snyders about 70 years ago, does not lose its relevance today, because it is the innovation that is taking place now in the field of fast food and fast food. These innovations are aimed at optimizing and increasing the convenience of placing and receiving an order, especially during peak hours of canteens.
And the main reason why many establishments have been investing in the introduction of this innovation for several years now is not how consumers pay for food.
The thing is how the ordering process takes place.
This is the same problem that Snyders saw and decided in 1948.
Mobile pre-order and performance in 2017 style
The cost of eating out since 2000 has steadily increased. In the early 2000s, only 39% of food expenses accounted for visiting establishments. By the end of 2016, this figure increased to almost 44% and, most likely, will continue to grow.
The total spending on fast food is also growing. Of all the money spent on food outside the home last year, $ 228 billion fell on it, and this figure exceeded the result of 2015 by 5.3%.
As in the 40s or 50s, when the idea of ​​fast food was just getting into fashion, convenience and price remained decisive factors for the consumer.
Today, representatives of the most diverse groups of the population: from family members with two sources of income and millennials, to single parents or pensioners, they simply cannot resist the convenient opportunity to drop in or drop in at McDonald's, Taco Bell, Chick-fil-A or any other favorite place and Take a good portion of food for a great price. Often they do this several times a week.
Analysts report that 7% of Americans eat at fast-food establishments on a daily basis, 50% attend fast food restaurants twice a week, 70% do it three times a week, and 80% - once a month. The restaurant business segment, which previously accounted for the most bad jokes about the dubious quality of food these days, brought the game to a new level, making its products more “healthy” and adapting the menu to the changed appetites of American consumers, while maintaining prices for acceptable level. The American consumer satisfaction index in the fast-food sector was 79 points out of 100, which is 2.6% more compared to the previous year.
Millennial clients, so desirable for many markets, are one of the key populations that fast food businesses want to attract. And for good reason: the millennials often eat in fast foods and other similar places. According to research, representatives of this generation visit them three or four times a week, leaving 44% of their budget allocated for food in such establishments.
In the meantime, the fast food industry faces many obstacles.
First of all, competitors arise from all sides. Local and regional networks of ethnic restaurants, mobile eateries and simply new eateries appear in large cities and small towns, in many cases seeking to satisfy the demand for healthier fast food options. Grocery stores have already expanded their product range to include departments with ready meals for lunch and dinner. Even the pharmacy giant Walgreen's is not far behind: the store next to our office in Boston offers frozen yogurt and sushi, as well as a whole set of sandwiches and salads. After its opening, Amazon Go, according to some information, will offer a similar range of products.
At the same time, supervisors introduce new instructions, the adherence to which leads to an increase in operating expenses. Labor costs are rising, along with spending on health care, and federal regulations to increase minimum wage rates lead to an increase in business expenses. Consumer expectations are also rising regarding the preservation of product quality, without a perceptible price increase, and this is another pressure factor.
Labor costs account for about 30% of the budget, and in some institutions and more. Approximately at the same level are the costs of purchasing products. Against this background, fast-food chain operators are looking for help from technology and innovators to solve one of the urgent problems - simplifying the ordering process for the consumer.
When images increase the average check by 20%
The operator of gas stations and round-the-clock mini-markets Sheetz was one of the first companies to offer the possibility of ordering food using touch screens in 1997. By providing consumers with images of what they could order, the Sheetz managing director said at the time, the company immediately saw an increase in orders. Managers of the company also found that a similar presentation method simplified the introduction of new positions to the menu and increased their sales. Images of new products on the screen spurred the interest of visitors and made it possible to quickly identify the most popular ones. Integration with POS-terminals accelerated the process of payment and ordering.
Rewinding a couple of decades ahead, today we are seeing tremendous technological progress and the emergence of new data access devices.
Online orders using personal computers and mobile phones had the same effect. A few years ago, the marketing director of Eat24 said that online orders allow restaurant operators to squeeze the most out of their budget, because they allow people to be reminded that they can order more than they ordered the last time. For example, if a customer previously took a pizza and coke in a store, now, thanks to online orders, he can take the same pizza along with snacks and soda.
For Sheetz and for Eat24, the main advantages were an increase in the average order size, additional sales due to the emergence of new customers wishing to try something new and an increase in operational efficiency due to the ability to serve more customers and process more orders with fewer staff.
However, it is the combination of mobile devices with applications and payment integration that today takes the concept of a remote order to a whole new level. It allows you to take the same model of the three components of success, on the basis of which Snyders built their business in 1948 and “pump it up with steroids”. As a result, we get exceptional efficiency, excellent food at good prices and an innovative point of contact with the consumer. And all this becomes possible just at a time when fast food establishments so need help in increasing net profit.
Nowadays, the introduction of mobile pre-order allows you to stimulate consumer activity, helping operators to attract new customers and allowing them to increase the efficiency of delivery of food ordered in this way, and reducing the time it takes the customer to issue such orders. Mobile pre-order and payment open up a whole new channel that allows you to serve more consumers per hour than can be done in an attempt to push people through the queues in front of the cash registers in traditional stores. The “second restaurant”, as Chipotle’s CFO once called this phenomenon, increased sales of some stores of the chain by $ 500 a day, and in others - several times more only by increasing the productivity typical of this approach.
The concept of mobile pre-order also encourages a rethinking of the geographical imprint. Revising the ratio of the area allocated for processing offline and online orders, allows you to free up the operating budget for other needs, reallocate labor costs, and perhaps even refuse to hire employees in general. Starbucks launched a pilot project for a mobile order store in Seattle. The company is trying to figure out how many employees are required for productive order processing and whether they are needed at all. McDonald's is testing the concept of a centralized auto cafe, which also serves only mobile pre-orders, which has already led to a decrease in the number of staff in other local establishments of companies.
Some variations on the theme of mobile pre-order and payment, using the business model of subscriptions, can lead to a fivefold increase in the volume of orders processed per hour, which allows even to offer dishes at lower than usual prices.
More advanced applications for mobile pre-order and payment are able to remind users of the need to make an order and apply intelligent forecasting technology to offer the consumer those menu options that they might like. The same smart technologies can be used for planning shifts of employees, special offers and additional customer acquisition during periods and days of lull. Such platforms may even open up new opportunities for profit, helping brands to promote their proposals at a time when the consumer is going to make a decision.
Of course, the ability to build payments into such an experience is the very element that, on the one hand, makes this experience so incredibly attractive and convenient for the consumer, and on the other, real for implementation on the operator’s side. Just as Uber removed the obstacles, first providing a reliable taxi service, and then a convenient way to pay for travel, mobile pre-order and payment eliminate similar obstacles for customers and operators of establishments.
The author spent the whole excursion into history for several reasons.
Firstly, everything new is well forgotten old. Times, as well as technologies, can change, but the problems that business faces today, as practice shows, have always been and will be relevant. This means that when you think about solving the problems of your clients, whoever they are and in whatever segment you work, it is often useful to think carefully about the fundamental difficulties that they face and that you need to decide in order to maintain a positive development trend. business. After that, you can think about where the integration of payments can take the price-quality ratio to a whole new level.
Secondly, the elimination of such difficulties of a higher order is what causes major changes in the traditional segments of the industry. In the restaurant sphere, innovative changes in the approach to ordering influenced the attitude of consumers to the very process of visiting establishments during meal hours, and soon these changes would affect any meals outside the house. Very soon, consumers will begin to consider mobile pre-order and mobile payment as a standard service when visiting similar establishments.
Restaurant operators, or rather, the most savvy of them, focused entirely on keeping abreast of progress. According to data provided by Chipotle's CFO, 66% of orders processed by the network are “eaten” outside their restaurants. At the same time, only 7% are made online or from mobile devices, and the company sees only positive aspects in the hard work of transferring a larger number of them outside the institutions.
Just as Snyders did in 1948, demonstrating to consumers a completely new way of ordering and consuming food, modern innovators provide advanced restaurateurs with the tools to create and put into practice an approach based on efficiency, food quality and new points of access to services. Today, consumers are mostly eager to use devices: mobile phones, tablets and voice assistants, such as Alexa, Allo, Siri and Bixby, as well as applications, such as Waze, that allow you to make mobile pre-orders in Dunkin 'Donuts.
As for the “device” from which the whole story began - the car - it is also going through an update today, turning into a “smart” car connected to the network, once again reminding us that everything new is really well forgotten old.
Source: https://habr.com/ru/post/326214/
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