Last week CNBC hosted interviews from two industry leaders providing insights into online ordering: Kevin Johnson of Starbucks and Brian Nichol of Chipotle.
Kevin Johnson explained why transaction volume dropped by a whopping 25%, yet sales remained stable. Similarly, Chipotle’s average-check for digital sales were significantly higher than in-store. Starbucks and Chipotle have invested millions into digital sales, and restaurateurs can learn from these behemoths.
Digital by nature puts the buying process into the hands of the consumer at the precise time they want to order. They are ready to order and are 100% empowered to do so without any distraction. Content and navigation is lean, no-frills, making sales funnel frictionless. This combination of a very motivated customer and ease-of-use means the buyer is inclined to buy more.
Kevin Johnson stated that, more than ever, people are buying beverages for several people when they hit the Starbucks app. The outcome is bigger scale with less effort. The customer ordering online for four people in their bubble take up less resources than seating and serving a table for two.
Another interesting phenomenon is people ordering online are often buying two meals: one for now and perhaps tomorrow’s lunch or something to have in their refrigerator. Going out, ordering again, is aggravating so getting a little extra right now makes a lot of sense.
It is now well known that the wallet share of dining-out and travel been reallocated to home improvement, new cars, and digital entertainment. While people are not dining out, they miss dining out and are more inclined to self-indulge when they do order from a restaurant. Adding onion rings, a shake, or a quesadilla to the typical order is a low-cost way to upgrade the experience. Items that reheat well or have shelf life will make sense. Things that kids like are moving well too. Kevin Johnson noted online food sales at Starbucks were riding the coattails of traditional beverage orders like never before.
So what can we conclude from the above now that the behemoths are sharing their secrets with Wall Street?
- This is no time to bootstrap your online ordering experience on your website. A mobile enables platform app is now table stakes. Hint: The customer doesn’t want to waste time calling you.
- Expand the menu. Early in Covid-19, the mantra was to simplify the menu and go with tried-and-true items. That may have been a good starting point, but you offerings should be diverse enough to handle the family of four and tempting enough for the college kid doing ‘an online run for 5 friends’. Seamless customization is king.
- Offering a reorder feature makes it that much easier to order from you versus a competitor.
- For pick-up orders, help the customer by giving them an accurate pick-up time and/or texting them when the order is ready.
Disruptions like Covid-19 always lead to lasting changes in consumer behavior. Diners will be back in your dining rooms, but for now consumers are being trained by the Starbucks and Chipotles of the world to spend $50 faster than you can say, “Table for two?”