The Rise of Online Food Ordering
January 11th, 2021
Over the past few years the line between online and offline has become almost non-existent and businesses are making the most of it. Customers today seek convenience and choice in their purchasing and as a result, restaurant and catering online ordering systems are on a meteoric rise. Many restaurant businesses already use online food ordering systems, but as demand for convenience continues to grow, new trends are becoming the norm, such as the adoption of mobile technologies, aggregator websites such as Uber Eats and Menulog, and new delivery services like DoorDash and Deliveroo. In this ever-expanding market it’s important to understand what drives customer behavior and to look to the future to stay ahead of the game.
What is online food ordering?
Ordering food online involves a customer searching for a restaurant online and being directed to a website or app through which they can place an order for food from that restaurant. Customers usually have the option to have the food delivered to them, or pick it up in store, and may pay by credit card or cash. Many online ordering systems are also designed to keep accounts for frequent customers to make ordering easier.
Online ordering first began in the late 1990’s when the Internet was first starting up and slowly gained momentum throughout the early 2000’s, as major pizza companies began making online ordering and delivery services available. However, it wasn’t until the current decade where the rise of digital technology like smartphones and apps has seen online ordering become a normal part of our everyday lives. It is no longer limited to major companies, but is also increasingly used by smaller, local shops.
Why is it so popular?
To understand the popularity of online ordering we must consider the modern behaviors of customers. The key to the rise of this purchasing method is the convenience it creates for consumers. We lead busy lives and work longer hours and are therefore drawn to systems that save us time and energy. The ease of ordering online is made even simpler with mobile technologies and therefore many businesses have introduced mobile-friendly websites and apps that can be downloaded directly to smartphones, allowing customers to order food from anywhere. Business Insider Intelligence reveals that mobile food ordering is expected to be a $38 billion industry from 2020 and beyond.
Convenience has been developed further with the advent of aggregator businesses such as Uber Eats and Menulog, which offer access to multiple restaurants through a single online portal. This has given customers the added ability to compare menus and prices, read customer reviews, and find local restaurants wherever they may be.
Online ordering also has advantages for businesses. For instance, an aggregator website like Menulog can drive even more traffic to businesses through an expanded reach and in turn, increase sales and brand awareness. Businesses are also given the opportunity to increase customer retention. By personalising the ordering experience through storing customer details such as addresses, card details and regular orders, customers save time each time they order.
For example, Domino’s encourages their customers to create a ‘Pizza Profile’ where they can save their favorite pizza order and contact information, allowing them to order their favorite pizza simply by texting an emoji. It has been found that once a customer creates an account for a business, 80% won’t leave for another, and with convenience and efficiency like this, it’s easy to see why. Add promotional offers and email remarketing to this and it’s easy to see why online ordering has been a win for restaurants and their hungry fans.
What’s next for online ordering?
It’s relatively early days for online ordering, with some businesses still hesitant to move their services online. However, with the rapid rate at which the popularity of this system is growing, it will soon become impossible for businesses not to become part of the online world. Here are a few predictions about the future of online ordering and what they will mean for the food industry.
1. Outsourcing delivery services
As discussed above, aggregator websites like Uber Eats and Menulog were born out of the success of online ordering. However, this has been taken one step further with the introduction of new delivery services, such as DoorDash and Deliveroo, which allow consumers to compare restaurants, order online or through an app, and have their meal delivered from places that have not traditionally offered delivery services. The way it works is that the delivery services are compensated by the restaurant they are delivering for through a small flat fee that is passed on to the consumer.
New delivery services are now in direct competition with aggregator websites as they expand the market towards a new group of restaurants and customers, providing both online ordering capabilities and delivery services from one app or website.
2. Omni ordering
While online ordering has already transformed from computer-based ordering systems, to more mobile-friendly options such as websites responsive to smartphones and custom-built food ordering apps, it is predicted that this trend towards allowing customers to order and pay from anywhere will further evolve. This has started to be seen through the introduction of food ordering services to social media platforms. Allowing customers to order from your website, mobile app, aggregator apps, and social media pages will truly give the customers ultimate convenience to order and pay, book a table, view menus, and read reviews all in the once place, from anywhere, on any device, with ease.
3. Predicting orders
The data that can be collected through online ordering will be increasingly used by businesses to target repeat sales. Restaurants in the future may use algorithms in their online ordering systems to predict a customer’s next order based on previous orders. This includes the type and amount of food ordered, as well as the time, day, and place of the order.
4. Online ordering will overtake phone orders
One of the key benefits of online ordering is that there’s less chance of human error. When ordering over the phone sometimes language barriers or poor line connections and background noise can result in the restaurant getting a customer’s order wrong. Online ordering minimizes this problem and can help to improve wait times. As more and more businesses implement online ordering systems, phone ordering will be almost completely replaced.
5. Prices may drop at restaurants
With the introduction of new delivery services, many customers are choosing to dine in. Because of this, restaurants will be looking to compete and draw people in their doors through offering special dine-in promotions and dropping prices on meals and drinks.
6. Driverless and drone delivery
The food industry has so far been quick to adapt to new technologies, therefore beyond 2021 as even more technologies are created and refined, we may see the food industry being quick to capitalize. Google has been working on a self-driving car for some time now, and while the focus of these cars is to increase safety on the roads, once it becomes a norm we could one day see driverless cars delivering food to cut down labour costs for businesses. Similarly, drone technology is becoming increasingly normalized and Amazon is planning to use drones to deliver packages to customers in under 30 minutes. If this idea takes off, we may eventually see food being delivered via drones too.
Technology moves at a rapid pace and as a result customer demands and expectations continue to evolve and grow. As our lives become increasingly digitalized, catering companies, restaurants and other businesses situated within the food industry need to make the most of these opportunities by looking for ways to introduce mobile and other online technologies into their operations. Customers are drawn to businesses that make their lives easier and give them exactly what they want, so it’s important for those within the food industry to stay on top of new trends and look towards the future.
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