Introduction
This article is the first of a list of articles aimed at helping small and medium restaurants become more successful through adopting world-class digital technologies. There are many articles listing lots of reasons (e.g. easier second orders, maximizing direct orders vs 3rd party orders, meeting preferences of younger population, less errors) about why restaurants need an online ordering system. While these reasons are generally valid, we believe there are big differences between large chains and small and medium restaurants. In this article, we will briefly explore why large chains work on maximizing digital orders, then show why it is strategically important for small and medium restaurants to follow suit.
Why Large Chains work on Maximizing Digital Orders?
Large chains generally have a strong brand and large volume of orders. Taking more orders online rather than on the phone allows them to save on labor costs which are expected to increase with time. In addition, they have the economy of scale to allow them to invest in world-class technology. Last but not least, they know that being the most convenient option for their customers is necessary if they want to remain competitive and increase their market share.
Why small and medium restaurants need to work on maximizing digital orders?
While small and medium restaurants may not have efficiency as a top priority as they focus more on getting more orders, most of them have no option but to offer their customers a world-class online ordering capability to thrive and not just survive. Otherwise, they will lose many potential direct orders either to other brands with more convenient ordering system or to 3rd party platforms (e.g. Doordash, Talabat, etc). This means less revenue, less profit per order (i.e. direct orders are more profitable than 3rd party orders), and lost opportunity to capture custom data that can be leveraged to build loyalty and generate future sales.
While it doesn't make economic sense for most small and medium restaurants to build the technology in-house or hire a contractor (whether a person or a company) to build a custom solution, the good news is that there are multiple vendors who offer online ordering products with affordable prices.
Conclusion
In this article, we listed specific reasons on why restaurants of different sizes need to provide effective online ordering capabilities to their customers. We elaborated on the negative implications of not doing so specially for small and medium restaurants, and highlighted the availability of vendors that offer online ordering products. In our next article, we will be talking about how can small and medium restaurants effectively utilize their online ordering system.