“Change is the only constant in life”, said the Greek philosopher Heraclitus. ‘Food for thought’, some would say. How about “thought for food”? Yes, we are talking about the paradigm shift in the way we consume food, especially due to the COVID-19 pandemic. Restaurants had faced an initial, steep decline due to the restrictions imposed to curb the transmission. In these testing times, the online food ordering system stepped in as a saving grace. The advantages of online food ordering systems are numerous, and with an estimated CAGR of 19.88% in India, this industry is poised to flourish in the coming years.
If you haven’t already adopted an online food ordering system, now’s the right time. Read on to know more about how to wield this tactical tool to boost your profitability.
Contents
- What is an online food ordering system?
- Why have restaurants increased their prices for online order delivery?
- 5 Astounding Advantages of Online Food Ordering System For Your Restaurant
- What do customers think about a restaurant’s own online ordering app?
- Success Stories
- Why choose Gofrugal?
What is an online food ordering system?
Online food ordering system is your gateway to reaching a larger audience. It enables you to automate and process online delivery and takeaway orders. Your customers can browse through a digital menu, either on your website or a dedicated mobile application, place orders, and make payments. Once the order is received, you can process it on your POS system and begin preparing the meal.
One of the important benefits of an online ordering system is that you can ensure a safe and sanitized delivery experience, which can help you instill a positive feeling in the customers’ minds. However, there are two sides to any story. According to a research study of 300 respondents conducted by Gofrugal in 2022 across various age groups and states in India, a staggering majority of 86% of respondents indicated they had witnessed an increase in food delivery prices, as well as additional charges due to surge pricing. 66% of these respondents concurred that the delivery prices have skyrocketed as compared to 2 years ago, before the impact of the COVID-19 pandemic. This leads us to the next question.
Why have restaurants increased their prices for online order delivery?
A closer examination reveals that restaurants have begun to charge their customers more for meals on food delivery apps when compared to the menu prices in their stores. A 2022 survey conducted by Jeffries Investment Group observed the online and offline menu prices of 80 restaurants across 8 cities. The median premium charged was 10-11%, while 20% of these restaurants charged a premium of 30% or more on food delivery apps. Customers couldn’t help but wonder why convenience cost an arm and a leg.
Here’s the reason: restaurants quote differential pricing in response to the increase in commission rates and take-out charges levied by third-party food aggregator apps. From consumers’ point of view, the average premium paid before discounts are 27-28% more than the menu price. This exorbitant price markup can cause customer dissatisfaction, resulting in fewer footfalls and lesser repeat patronage.
Does this resonate with your restaurant, too? Don’t worry, we’re getting to the heart of this article – reasons to build your own online ordering app.
We understand that you are constantly seeking alternatives to combat commission charges while simultaneously streamlining delivery operations. The best possible solution to address these challenges is adopting your own online ordering and delivery app. Many successful restaurants and cloud kitchens, both multi-chain and single outlets, have their own application for processing orders. Let us look at the advantages of online food ordering systems in detail.
5 Astounding Advantages of Online Food Ordering System For Your Restaurant
Enhancing Customer Experience
Customers are always looking for products that make their lives easier. One of the important advantages of online food ordering systems is the ease with which your customers can place an order. Unlike in a dine-in setup, your customers can take their time to read through your menu and place their order. Often, customers tend to buy something extra – either a side salad or a dessert – while placing an order online. You may also make your website or mobile app more engaging by sending notifications about the status of their orders in real-time.
Optimizing your CRM
You can better understand your customer preferences with the help of an online food ordering system. You can gain insights on the following questions:
- Which dishes are being ordered more frequently?
- What are (a customer’s) favorite orders?
- What time of the day do I receive the highest number of orders?
With the help of this data, you can create personalized offers based on customers’ meal preferences, and encourage customer referrals by providing incentives such as discounts and coupons. Customers can also share feedback about the meal directly with you, which is often masked by third-party online food aggregators. This way, you gain better visibility and improve your offerings constantly. You can also use your online ordering website or app to keep customers informed about your new offerings.
Growing a Cost-Effective Customer Base
You can retain your repeat patrons and loyal customers, and also increase your brand awareness, whilst avoiding pricey advertising media with an online food ordering system. A distinct online presence can help existing and new customers find your restaurant easily – either through a third-party food aggregator or through your own website or mobile app. You can also list your restaurant’s timings, menus, and customer reviews on Google My Business to make your restaurant always be the most preferable one. Instead of relying solely on customer footfalls and word-of-mouth marketing, you can increase your reach through an online food ordering system.
Refining Restaurant Performance
One of the most obvious benefits of online ordering system is that your restaurant’s operations will improve. You can process more daily orders with an online food ordering system in place. Furthermore, your kitchen staff can be relieved from the tedious task of remembering every minute order detail by heart, and focus on what they do best – craft delicious meals for delighting your customers. You can also significantly reduce the chances of making mistakes such as order mix-ups and inconsistencies in meal preparation.
Boosting your Bottom Line
Perhaps one of the critical advantages of online food ordering systems is that you don’t have to pay any commission to third-party food aggregators for delivery. With an increase in the volume of orders, you can focus on cutting down costs to boost the bottom line. You can also price your menu more effectively, attracting the majority of the foodie flock to try your delicious dishes!
Now that you know these astounding advantages of online food ordering systems, you must be wondering: I am confident to launch my own app, but will people prefer to order from it over a third-party food aggregator? Not to worry, because we’ve got you covered!
What do customers think about a restaurant’s own online ordering app?
Gofrugal conducted a research study of 300 respondents in 2022, to identify their motivation to order from a restaurant’s own ordering app. Here are a few interesting insights from the report:
- Customers want a restaurant app to offer better food and customer service quality when they order food online. They also wish for better discounts and offers from a restaurant’s own app when compared to a third-party food aggregator app. Another factor that can increase app adoption is better area coverage – and if you run a multi-outlet chain of restaurants, you can capitalize on this factor.
- A whopping majority of 75.81% of the respondents had agreed to adopt a restaurant’s own app, provided it has all the features discussed above.
- 65% of the respondents said that if a restaurant’s own app offers better discounts and offers, they would choose it, while 55% of the respondents indicated that cheaper prices would influence their decision-making. 49% of the respondents said they would prefer a restaurant’s own app because there would be a direct interaction with the restaurant.
- 88.82% of the respondents agreed that they are more likely to use the restaurant’s own app instead of a food aggregator’s app if it has all these features.
We hope we boosted your confidence in adopting your own online ordering system. Here are a few success stories of brands that have used online food ordering systems to grow their restaurant business!
Success Stories
Domino’s Pizza
“Many small restaurants don’t have a system for delivery. Meanwhile, third-party delivery apps are charging local eateries high fees to deliver, which are taking away much of their earnings.” – Russell Weiner, COO
Domino’s Pizza (source: TODAY) is one of the pioneers in combating third-party food aggregators. In 2021, they launched a campaign called “Surprise Frees” – where instead of adding extra delivery charges to the food costs, they had decided to give away free stuff, anything from a pizza to a lava cake. They witnessed a huge surge in sales in response to this campaign.
In the same year, Domino’s stores across certain areas in the US bought thousands of $50 gift cards from local restaurants, randomly gave them out to Domino’s delivery customers, and encouraged them to use the gift cards by ordering directly from the local restaurants so they could avoid delivery app fees. These local Domino’s stores gave away more than $100,000 worth of gift cards from locally owned grills, taco places, barbecue joints, bakeries, delis, and more, to roughly 2,600 customers throughout early November.
“Many small restaurants don’t have a system for delivery. Meanwhile, third-party delivery apps are charging local eateries high fees to deliver, which are taking away much of their earnings. Domino’s and its franchisees were inspired to pay it forward in these communities by helping drive business to a few neighboring restaurants – without the substantial fees.”, says Russell Weiner, COO of Domino’s.
Rebel Foods – EatSure
“We wanted people to place orders without having to compromise on a single type of meal. We are on our way to sign with some of the biggest global brands.” – Sagar Kochhar, CEO
Often, people find it difficult to zero in on one restaurant, especially when ordering food online for a group of people. In such a situation, most people tend to compromise on their choice of food and end up ordering from one restaurant.
This was the consumer pain point that Rebel Foods wanted to address. Rebel Foods owns a wide range of cloud kitchens such as Faasos, Behrouz Biryani, Oven Story, Mandarin Oak, Firangi Bake, Lunch Box, The Good Bowl, Sweet Truth, and The Biryani Life – and they launched EatSure, an ‘omnichannel platform’, in 2020. This app allowed users to place orders from multiple restaurants in a single order. The catch? The delivery charges were zero.
Aside from Rebel Foods brands, EatSure also hosts brands like Anand Sweets, Mad Over Donuts, Naturals Ice Cream, etc. “Rebel Foods has also taken license for some global brands, like Wendy’s which happens to be the third-largest burger brand globally. In just a year, we have been able to expand Wendy’s to 82 locations,” informs Sagar Kochhar, CEO.
Tasty Kitchen
“With Gofrugal, there were absolutely no mix-ups or mismatches, and we were able to witness the growth in our online orders through our own online ordering app.” – Jey Charan, Proprietor
This is not a household name, but their story is just as interesting as the former two brands we spoke about. Mr. Jey Charan, the proprietor of Tasty Kitchen, started the restaurant 10 years ago. They cater to customers across multiple areas in Chennai. Earlier, they had used a POS system for generating bills, but as soon as they expanded into a fully functional restaurant – they realized the need for adopting a robust restaurant management software with an online food ordering system.
“After adopting Gofrugal’s restaurant management software, we were able to process orders even faster. There were absolutely no mix-ups or mismatches, and we were able to witness the growth in our online orders through our own online ordering app,” says Jey. To know his entire story, click here.
With Gofrugal‘s gamut of restaurant management tools, you can make the change you envisioned a reality:
- Ordering made simple: Gofrugal OrderEasy helps you build your own online ordering app, which can help you get higher profit margins upon integration with your POS system.
- Deliveries on the fly: Gofrugal GoDeliver enables you to guarantee a delightful experience with every delivery made through your own online food ordering system.
- Contactless dining: You can also provide your customers with a safe, delightful, and contactless food ordering experience with their own devices through our Contactless Dining feature.
Embrace the change of innovative inventions by adopting a seamless online food ordering system that helps you transform your business in line with the industry’s growth. To earn maximum profit with minimal staff and training, adopt Gofrugal today!
