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Omni-channel means opportunity with on-demand consumers

By : Paul Mounkes

September 21, 2017 08:00 AM

The term “omni-channel” refers to the convergence of the digital and physical interactions you have with your customers in the age of mobile technology.  It’s driven by the explosion of different ways companies can improve their customers’ experiences, keep in touch with them, keep them engaged and keep them happy.  Happier customers generate more business.

 

At the core of the omni-channel movement is the on-demand consumer, a creature that lives a significant portion of his or her life online and takes full advantage of the mass-proliferation of mobile tech that has permeated every aspect of our lives.  The on-demand consumer wants to interact with your brand on their terms – online or on-prem, day or night, social media or mobile app, text or voice…  Too many possibilities to list.

 

Moving Forward, not Backward
The on-demand consumer has been catered to - and shaped by - the proliferation of online mega-shopping platforms that deliver a customer experience built on unprecedented ease of use, near-unlimited choice and near-instant gratification.  This is the “new normal” for on-demand consumers.

 

As technology plows ever forward, restaurants will encounter more and more on-demand consumers.  So for those who have taken a “wait it out” approach to the omni-channel trend, well….  Resistance is futile, as they say.  Because it’s not a trend, it’s a revolution.

 

That’s why delivery marketplaces like GrubHub and DoorDash have brought a version of the mega-shopping platform model to the restaurant industry.  The goal of this model is to create a win-win-win scenario. 

  1. Restaurants get additional online brand exposure, engage with new and existing customers and command a ready-made delivery team that allows them to tap into Omni-Channel opportunities. 
  2. Delivery marketplaces generate revenue for themselves and are establishing market awareness as brands that help other brands thrive and compete more effectively. 
  3. Consumers get the expanded choice and convenience they’ve grown accustomed to.

 

Managing Your Brand with Delivery Marketplaces
Many restaurants and chains have their own websites and mobile apps where customers can check menus, view images, get directions and, in many cases, order food, pay and request delivery.  These are “must-have” virtual properties that customers have come to expect, but delivery marketplaces have created all-new pathways to do these very same things.  Why was this necessary, and what continues to fuel it?

 

On-demand consumers place a high value on choice and ease of use.

 

CHOICE:  Delivery marketplaces enable consumers to browse through many restaurants, select the food style that suits their tastes that day and try out new dishes and new restaurants whenever they feel like it. 

 

EASE OF USE:  Delivery marketplaces eliminate the need to create new accounts and enter credit card information for every restaurant.

 

So, delivery marketplaces thrive because on-demand consumers are willing to pay a premium for choice, convenience and ease of use.  That means several things for restaurant brands:

  1. Table Stakes:  Even if you have the industry’s most robust website and mobile capabilities, it’s crucial that your brand be available on at least the two or three most popular delivery marketplaces because if consumers can’t find you they’ll surely find your competitors and start engaging with them.  But if you’re there, this additional online exposure will help you increase same-store sales.
  2. Beyond simple exposure:  Delivery marketplaces generally allow you to build a relatively robust brand presence on their marketplace sites.  The more creative and visual you’re able to get the better, because it attracts the eye and keeps your brand top-of-mind with your existing customers AND allows you to catch the eyes of new customers, driving business you may never have gotten otherwise.
  3. Not to be taken lightly:  As part of your brand management, your customer must have a positive delivery experience FAR more often than not.  Timing, accuracy and consistency are critical to accomplishing that, and most restaurants will need help in these areas if they’re new to delivery.

 

Huge Growth Expected, With Asterisks
Cowen chief analyst Andrew Charles said “All in, we forecast delivery to grow from $43 billion in 2017 to $76 billion in 2022, 12% annually over the next five years," specifically due to the “…ease with which people can order food from their phones or computers.” **

 

This level of expected growth may seem like wishful thinking to owners and operators who are “in the trenches” every day because there’s widespread recognition that this fledgling industry is still highly fragmented and delivery marketplaces are still in “land-grab” mode.  Meaning, their focus is still on signing as many restaurants as possible as opposed to the harder work of perfecting operations for the long haul.  That’s why there are still drawbacks for both restaurants and consumers in using Delivery marketplaces.

 

Issues for consumers: 

  1. Sometimes the food quality isn’t as good as it should be
  2. Often their orders aren’t accurately or fully executed
  3. In most cases they have to pay a premium for convenience

 

Technomic lists the drawbacks for restaurants as follows: *

  1. Loss of quality control
  2. Decreased margins
  3. No POS integration; additional labor
  4. Potential loss of loyalty/brand equity
  5. Improper blame if issues arise
  6. No national coverage from one delivery company
  7. Potential to overload kitchen with additional orders
  8. Sneaky behavior from third parties

 

Fundamental market forces (competition, industry consolidation and standardization) will eventually solve some of these problems.  But operational problems like additional labor requirements, kitchen overload, loss of quality control, etc. will have to be solved through another, more powerful force:  Innovation.

 

Tackling the Problems:  Half-Hearted or Head-On?
The key word in “On-Demand Consumer” is “Demand.”  Those who fully commit to meeting their demands will have a leg up in the tooth-and-nail restaurant industry.  We believe that delivery marketplaces can help restaurants gain that leg up, and that the surface of their potential has only just been scratched.  So how do you solve the problems and uncover more of that potential?

 

Some POS companies have formed partnerships with 3rd party software vendors and their delivery marketplace strategy consists of pointing their customers in that direction.  But this adds a great deal of cost and forces yet another vendor and yet another piece of software upon you which is not a particularly compelling “solution.”

 

However, a few of the most innovative technology companies in the world are stepping up to solve these problems for restaurants and pave a smoother path to success with delivery marketplaces. The truly innovative POS vendors are investing time and resources in this phenomenon by developing scalable cloud solutions that integrate seamlessly with multiple delivery marketplaces in a way that actually reduces costs, effort and the risk of human error.

 

To get a piece of the omni-channel pie you need to cater to the on-demand consumer.  Our expert advice:  Start with a POS system that’s already seamlessly integrated with multiple delivery marketplaces and you instantly have a foot in the omni-channel door.  From there, continue to build your omni-channel capabilities based on the critical themes we’ve discussed here:  Interaction, choice, convenience and ease of use.

 

* FARE 2017 Study – Technomic
** Food Delivery Market Surging Thanks to Online Orders – Food & Wine Magazine

Paul Mounkes

Solutions Marketing Manager, Aloha Platform

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Paul is the Solutions Marketing Manager for the Aloha Platform at NCR. He has more than 16 years of comprehensive experience in B2B marketing for high-tech companies with emphasis on Product, Communications and Channel. In addition to his experience with restaurant technology, Paul has worked with AI systems, warehouse management solutions, data center technology and POS security solutions. Paul holds an MBA from Georgia State University and a BA from Armstrong State University.