2014-05-06

Co.Labs

The Hidden Psychology Of Ordering Food Online

You might not realize it, but every time you order dinner digitally, you subconsciously order more--whether it's Domino's, deli food, or your favorite delivery app.



If you've ever stopped for gas in the mid-Atlantic, it might have been at a Sheetz--a major convenience store brand with 450 locations. Rural gas stations aren't usually the petri dish of prescient technology concepts, but back in 1993, the chain began experimenting with touchscreens to order deli sandwiches. More than 20 years on, Sheetz says the touchscreens (called "order points") haven't just become a part of their brand--they actually encourage people to try new foods--and order more of them.

CEO Joe Sheetz told me the touchscreens had some intended effects, too: They reduced the number of times customers claimed sandwiches were made incorrectly, increased turnaround time for the kitchen, and helped upsell items by steering customers towards ordering more toppings.

But the real boon was the touchscreens' crucial role in introducing new menu items.

When Sheetz introduced espresso-based drinks to their locations in 2007, they faced a challenge: Many of their customers who lived in rural markets were unfamiliar with espresso-based drinks and their various special titles. In response, the company made the drinks prominent on the touchscreen order points, where the user could see pictures of the drinks and clear, easy-to-read descriptions of all the espresso bar items. With a screen-based food ordering system, “you can put descriptors on anything," says Sheetz.

For food items like sandwiches, salads, and nachos, “People discovered toppings they didn't know we have. We cannot show a menu with all possible scenarios, but we can in touchscreens. We can offer condiment screens, vegetable screens, and a whole bunch of choices people can take their time going through,” Sheetz said. “You find that some people have interesting tastes, thanks to the touchscreen (laughs). They will put mayo on something you and I would never put mayo on. Some of things you add on to a sandwich are free, others are upcharges, which are right on the button--like bacon, cheese. You can easily put that upcharge right on the sandwich. You wonder how people will fit all the things you order onto a roll when it's volume heavy!”

Last but not least, the chain is also able to obtain valuable data from the touchscreens. Sheetz's systems retain data from the touchscreen, which they chain then uses to track item sales, margin management, and inventory management. Next up for Sheetz? They are currently running a test at 35 drive-through locations, where the traditional drive-through loudspeaker is supplemented with a touchscreen for ordering food.

But it's not just Sheetz that discovered digital orders differed from analog orders.

Why iPad Users Spend More On Food

San Francisco-based online ordering service Eat24 is the younger, scrappier brother to industry giant GrubHub/Seamless. Best known for publicity stunts like sponsoring their own strain of marijuana and advertising on porn sites, the company has also built an impressive market share with over 25,000 restaurants signed up.

“The difference between online ordering and offline is that most restaurants tell us orders are bigger and higher," says Eat24's chief marketing officer Amir Eisenstein. “For example, if you order a pizza over the phone you'll just tell them to bring an XL pizza and a Coke. But when you go online, you see the whole menu. All of a sudden, people order appetizers, ribs, salads, and stuff they don't normally order over the phone. They have more time on the menu, they spend more time on the menu, and they order slightly more items than over the phone.”

According to the company, they can even segment behavior by device: Mobile users typically spend more than desktop consumers per order. Eisenstein says there is more revenue from apps than desktop customers, that app users order more frequently than desktop users, and that Eat24's retention rate for mobile app-first users is higher.

These order rates “also includes customers trying new stuff. When you're on Eat24, going over the menu, you are exposed to all the options. You'll try stuff you never thought about ordering over the phone, and that's something we see across the board at all restaurants.”

Domino's Pizza: Touchscreens Make Customers Happier

With more than 11,000 stores, is one of America's biggest chains. The franchise has staked their consumer business model around rapid turnaround for a menu constructed out of relatively few items, which can be reassembled in an assortment of configurations (chicken-crusted barbecue bacon pizza, anyone?). A staggering 40% of the chain's domestic sales come from orders through desktop computers, smartphones, and tablets; last week, the company introduced an iPad app designed to spur sales even further.

Chris Brandon, a spokesperson for Domino's, told Co.Labs that a primary benefit from the company's online ordering is that it increases sales for add-ons. “Customers love it because they can experience more of the menu,” Brandon said. “With Domino's before, you only needed to know a phone number and to think of your regular order or pizza order. Now that we have sandwiches, specialty pizzas, chicken, all these additional products and desserts, it increases sales.”

A secondary benefit for Domino's is that it reduces errors made in the kitchen and makes customer orders much more coherent for restaurant staff. This increases customer satisfaction.

“Orders are a bit more accurate both from the customer standpoint and the order taker on our side, sometimes phone ordering can be tricky if it's a noisy store, or a busy environment on the customer's side.There are 34 million ways to make a single Domino's pizza, and a lot of conditions can get lost in translation. Digital ordering can take care of a lot of that,“ says Brandon.

There's an additional benefit too, one that secondary benefit for the large pizza chain: Gimmicks such as the Domino Pizza Tracker and a 3-D modeling feature in the iPad app help retain all-important younger users, who are likely to stick with the digital offering--which offers Domino's and other companies much more data exhaust--in the future. Leveraging customer data through digital orders is a big priority for Domino's; information processed through a bespoke geospatial business intelligence system, for instance, allows the chain to discover “over-performing stores” that could be split into two and to target specific areas based on ethnic eating habits.

Spitz: The Add-On Effect

Individual restaurants that take digital offers through Eat24 and Seamless see their bottom lines boosted by a simple psychological effect: Having to order with an entire menu in front of you leads you to order more items.

Spitz is a Los Angeles mini-chain with four locations which sells Turkish doner kebabs (gyros) alongside an extensive menu of side items. Bryce Rademan, the chain's cofounder, says that the big advantage of digital ordering for his company is that it boosts add-on sales and upselling.

“When the menu is on the screen and you're hungry, you add a side dish. You click, its ready to go. Over the phone you just order what you set out to. We see way less impulse purchases of appetizers over the phone. We also see a lot more upsells, items like street cart fries are two bucks extra with the meal because it's in front of you.”

The restaurant offers a wide menu of riffs on Turkish food like french fries topped with kebab and feta cheese, and Mexican taquitos (fried tacos) filled with kebab meat. During lunch orders, having orders come through online has helped the restaurant greatly. Rademan says that online orders are typically larger and for groups, rather than individual customers. For Spitz, like Domino's, digital orders are more reliable too. “It's loud in the restaurant,” Rademan said. “Phone is really the least reliable way to do orders ever.”

And for Spitz, if digital ordering means a group is more likely to order add another portion of fried olives and garbanzo beans, it's great news.

[Image via Wikipedia]




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3 Comments

  • Zo Ro

    I work at OpenRest - a company that develops online ordering systems for portals, but also white label ordering systems for restaurants.

    In the last three years we have seen an amazing increase of online orders in our restaurants. Today more than 40% of online orders are generated from the our restaurants' mobile websites and mobile applications.

    We also have a call-center product, so we see it very clear that orders coming from the websites and applications have a 10% higher average order price than the ones coming through the phone calls.

    We know that restaurants now aim to use the internet to build their own brand, and not forward their own clients to the portals (where they pay 10%-15% per order from their customers). For that reason, restaurants should focus on the white label solutions.

    If you're interested in online ordering system, check out how we increased our first restaurant's orders (http://blog.openrest.com/2014/04/3-years-later-openrest-first-restaurant.html)

  • It would be nice if these touchscreens can give you the Nutrition Data after you have finalized your selections. At least those who try to eat healthy can have options aside from what they normally eat day in day out, and will not be scared ordering from restaurants.