More Evidence of Higher Online Checks From Toast POS Data
Restaurant consumers are ready to order online, and they’re happy to order more from the comfort of their screens.
Domino’s announced that now more than 80% of pizza orders are made online, 60% on mobile devices, and ticket totals have risen 18.6% so far in 2016. Zoe’s reported good online order growth in recent earnings, despite a slight miss that sent the stock tumbling 19% before leveling off some. Buffalo Wild Wings has reported that 16% of sales now come via “higher-check online/mobile orders” as it promotes large, catering-like takeout packages. And Wingstop gets 15.8% of orders online, for a $4 premium.
According to Chris Comparato, the CEO of Toast POS and former CEO at Oracle-acquired ecommerce developer Endeca, consumers now see online ordering as a “natural experience.”
“If you think about what’s happened in the past eight years as far as consumer devices, tablets and cloud, you’re seeing a convergence of technology that has allowed new business models to come in that weren’t even possible,” said Comparato, who added the restaurant segment is still catching on. “We’re at an infancy as far as where this industry can go.”
Toast, which offers an Android-based POS solution exclusively for restaurants, picked up $30 million in a Series B funding round back in January led by Bessemer Venture Partners and GV (formerly Google Ventures). It’s an upstart in the digital-enabler vein of Square (valued at $6b after a $150 million Series E funding round) and “digital ordering engine” Olo, which has raised more than $60 million since inception.
Just like browsing for a shirt online, digital menus offer time to think instead of being rushed through a line.
“We think that’s because of a number of factors, they can look at the food and see images, they can look at the menu and take their time, they’re not in the store being rushed,” said Comparato.
Given the option for more control over their time to really ponder the menu, customer orders were 23% higher than in-store orders.
No doubt more orders around dinner versus lunch and group orders contributed to that bump as well, but Comparato said that given consumers’ love of efficiency (or aversion to human interaction), they’re happy to interact with a brand online.
Comparato says a universal menu is key for that interaction. Operators can update everything from the counter POS to in-store kiosks and responsive digital orders on desktop and mobile devices with one change. It’s also web-friendly, which means no space wasted on an app for storage-poor consumers.
He said it also helps restaurants in the ongoing search for higher efficiency.
“We see better efficiencies because those orders are firing right into the kitchen. So the concept of having it be an all in one platform,” said Comparato. “So for the restaurant, it becomes a much more seamless process because you don’t have to go from one workflow to the next—it’s all one workflow.”
According to Toast data for QSR (including fast-casual), 15% to 18% of sales came via online. For full-service restaurants, 8% to 10% of sales came online. And one third of both takeout and delivery orders came from online menus.
As for the murky outlook for the industry, Comparato doesn’t see adoption slowing, even if the economy grinds to a halt. The share will shift, but online ordering will continue to expand regardless.
“The founders of Toast and myself found that out back at Endeca in the retail space,” said Comparato. “It’s been a story that retail companies have gotten used to, but not one that the restaurant space is used to.”