Mobile Supercharges Take-Out

While all of the tech dweebs in Silicon Valley are bickering over which local/mobile/social app will win out in the battle for merchants, millions and millions of us would rather put our eyes out than waste a second of our day "checking in" on these damned apps.

Sorry, but count me among the Luddites on this one. Vying to be "mayor" or "chief" or "potentate" or whatever you guys are doing with these check-in tools seems akin to admitting that you spend much too much time in your local Best Buy or Starbucks. I personally am not eager to become the rough equivalent of Cheers' Norm at my nearby Panera's. I know, go ahead and tell me what I am missing about this model in the comments below.

But while this new generation of apps tries to create in us a whole new set of habits, there is a class of less-heralded apps that are riding on an existing habit. And they don't have to invent a new business model. It is the great American ritual of ordering take-out.

According to restaurant search and remote ordering company Snapfinger, the Outback Steakhouse mobile app that launched late last year in the iPhone App Store had a slow start with about 250 orders that first month. Then it clocked 2,400 the second month. "This last weekend they had about 58,000 orders," says Jim Garrett, Snapfinger's CEO. "So it's definitely picking up."

And this is on little to no marketing of the app. Snapfinger has dedicated apps for about 15 restaurant chains like Subway and California Pizza Kitchen on iPhone and Android platforms. The apps include the full menu from these restaurants and even allow users to customize specific items, give special orders and save their favorites for easy reordering later. The mobile apps, like the online ordering Snapfinger also offers, are tied directly to the point-of-sale, so the app can accommodate localized special offers. "It is growing at a steep pace," says Garrett.

While mobile take-out ordering accounts for less than 10% of Snapfinger transactions now (calling and Web ordering are still more popular), Garrett believes that the platform will become the most common channel for take-out on his system in three to five years.

The restaurant industry traditionally is slow to adopt new technology and even marketing methods. Getting the chains to push the technology across their marketing channels is an uphill battle, but Garrett says the incentives for moving to mobile should be apparent. Eighty percent of a restaurant's business comes from returning guests, so increasing guest frequency is critical to business success.

"We see an increase in guest frequency from the mobile app of three to one," he claims. "If you were going once a month, you are going three times a month because you are using the order button more frequently." The app adds convenience because it saves past orders for quick reordering. Garrett also says that the mobile customer is tallying up a check that is 27% higher than phone take-out orders.

Because Snapfinger services the restaurant chains across phone, Web and now mobile, Garrett is getting to see the comparative efficiencies and trends across traditional, new-media and next-media platforms. As Web and mobile orders rise, direct phone orders decrease and overall volume also goes up. Order inaccuracy also declines. "I have been in this industry for 30 years, and this is the most tangible use of technology I have ever seen," says Garrett. "When you talk about value to the customer experience and value to the restaurant -- the increase in check-in guest frequency and the decrease in inaccurate orders, in every category -- it is a slam dunk."

There are some challenges, to be sure. The Snapfinger apps have to manage pretty dense menus that don't always translate well to the small screen. That first encounter with Outback or Boston Market on an app can be daunting. And Garrett admits that franchises need to support the app at all of their locations in order for the consumer to feel confident using the system nearby. Downloading the Subway app only to find that your local venues are not there can sour the experience.

But the potential here is staggering. If restaurants have a direct line back to their most loyal customers, and even know what their tastes are, the CRM possibilities are endless.

While scores of social media start-ups spend the next few years inventing new marketing models for leveraging local venues, my guess is that this simple extension of an existing habit, ordering take-out, is where real people's real money will flow first.

Tags: mobile
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7 comments about "Mobile Supercharges Take-Out".
  1. Paula Lynn from Who Else Unlimited , April 13, 2010 at 12:48 p.m.

    A perfect combination of need (food) and efficiency (not having to misunderstood, etc.) while infers privacy.

  2. Wes Smith from The Herald , April 13, 2010 at 12:49 p.m.

    On the Foursquare model of gaining points and Mayorships and such, to put it in Gaming parlance, we're all achievement whores. Humans are competitive by nature. We try the very hard things in games to get that extra 20 Gamerscore and the "3y3 Pwn3d j00" Achievement. Same concept with the Social apps that do that.

    Good example: we have a task management software that assigns a score to a person for creating, working on and finishing tasks. When I asked the programmers why they did that, they said the same thing I did above. Give someone a high score to beat and they'll keep trying until they either beat it or give up.

    Now if you'll excuse me, I think someone just beat my Pac-Man score. I must correct this.

  3. Stephanie Milam from On Your Mark , April 13, 2010 at 12:58 p.m.

    I'm interested to see how this compares to the geolocation advertisting/coupons some retailers and restaurants have started using for existing customers.

  4. Cal Morton from Fulcrum Mobile , April 13, 2010 at 1:12 p.m.

    And marketing the app at POS via a short code and keyword designating the store is the most efficient (simple and cheap) to get the app on their phone.
    How about a table topper offering a free dessert to each phone that texts or downloads the app... nah, that'll never work ;0)

  5. Lisa Foote from MixMobi , April 13, 2010 at 1:28 p.m.

    Steve - Great post - keep calling 'em like you see 'em.

    While I agree that location-check-in as Holy Grail is overrated, we think location-based advertising and couponing are going to be powerful. It is a different paradigm than (over?)sharing your location for no concrete benefit. Study after study have shown that consumers' #1 desire is to get a immediate benefit from mobile interactions. (In the Snapfinger case, convenience.)

    (OK, Wes, I'll admit you do get bragging rights...)

  6. Travis Priest from Sundrop Mobile, Inc , April 13, 2010 at 9:03 p.m.

    Carl, we take mobile number at POS and push texts as part of a card-less loyalty program. Beats keyword direct response by a mile and then some. Then we do mobile ordering via text and FB app (apps.facebook.com/txttogo)

  7. David Diekmann from Bloomstruck , April 14, 2010 at 1:44 p.m.

    Wondering if anyone's setting up local exchanges based on the search engine/keyword auction model that allows merchants in a food court at the mall, for example, to 'outbid' one another with discounts, coupons, BOGOs, etc for mobile users at the mall? I can see it now....Hot Dog on a Stick might be on top today with a 'Buy 2 get 2' deal but tomorrow it's alllll about Sbarro's '50% off the second entree' meal deal.