“The first thing that ever sold online was pizza,” according to The History of the Web’s Jay Hoffmann. The internet had been in existence for 25 years[1] when Pizza.net was launched, a collaboration between a forward-thinking Pizza Hut franchisee and a web development firm called Santa Cruz Operation. It was, in Hoffmann’s words, “a way for Pizza Hut to test the waters and see if this World Wide Web thing has a real shot at a future.”[2] Fast-forward 25 years to 2019, Pizza.net has proven to be the first iteration of a technology that would come to change not only the pizza business but the entire restaurant industry. Online orders account for over 55 percent of Pizza Hut’s U.S. sales volume. Domino’s and Papa Johns both see over 60% of their order volume coming from digital channels.[3]

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Photo by Call me LAMB~~~ on Unsplash

Restaurants serving traditional delivery fare like pizza and Chinese food aren’t the only ones seeing significant digital order volume. Quick-service operators like Chipotle, Dickey’s Barbeque, Fuzzy’s Tacos, Chick-fil-A, and even Starbucks are also seeing an ever-increasing portion of their sales from online and app orders. In January 2018, it was reported that the Starbucks “mobile order and pay” smartphone app, launched just 3 years prior in 2015, accounted for 11 percent of chain’s transactions in U.S. locations.[4] “Orders placed via smartphone and mobile apps will become a $38 billion industry and make up nearly 11 percent of all quick-service restaurant sales by 2020,” according to a September 2017 QSR Magazine article citing Business Insider Intelligence reports.[5]

Not to be left behind, full-service restaurants “rolling out proprietary apps left and right, for online ordering, delivery, loyalty rewards, and some even for payment,” declares a May 2019 article in FSR Magazine. An April 2018 article in the same publication praises the utility of online ordering for its audience of full-service restaurant operators: “Online or in-app ordering offers another strategy that allows guests to skip lines, saving them time and creating a more predictable workflow in your restaurant. Paired with curbside pickup or a dedicated, convenient takeout counter inside, these self-service orders can save precious time and provide a service guests value.”[6]

In 2014, casual dining giant Chili’s partnered with tabletop tablet firm Ziosk to provide an “online ordering” experience for dine-in customers. Ziosk installed over 45,000 tabletop tablets in 823 of its restaurants that allow guests to place orders, play games, and pay for their meals. As of mid-2018, the digital ordering firm had installed over 180,000 Ziosk tablets nationwide in restaurants like Olive Garden, Smokey Bones, and Morton’s The Steakhouse.[7] The same technological advances that brought “online ordering” to traditional restaurant tables is also poised to allow those restaurants to efficiently process online delivery and takeout orders.

Traditional delivery establishments, quicks service / fast casual, and full-service restaurants differ slightly in their specific implementations of online and mobile ordering. But no matter the restaurant format, productivity and profitability are improving thanks to e-commerce technology. Hungry Howie’s Pizza franchisee Jeremy O’Sullivan sums up the impact of online ordering on his bottom line: “We went from answering 2,000 phone calls a week for one store in 2011 to answering 800 per week for two stores today. Online orders are currently at 65% of our order volume. Labor ran 26% in 2011, now it’s 24%. Online orders average about $2 higher than phone orders.”

In addition to increased efficiency, O’Sullivan says the customer experience is enhanced. “People like to get much more creative with their orders… Light sauce, half this, well done, etc… Because they don’t have that human being on the other end of the line feeling they may be difficult or picky.” Restaurant POS firm Toast backs O’Sullivan’s anecdotal observations with this statistic from its 1,000-plus restaurant clients, “The average online ordering check size is 23% larger than in-store checks.”

[1] Robert H. Zakon, Hobbes’ Internet Timeline – the Definitive ARPAnet & Internet History, , accessed May 07, 2019, https://www.zakon.org/robert/internet/timeline/index.html?ver=293.

[2] Jay Hoffmann, “The First Thing That Ever Sold Online Was Pizza,” The History of the Web, July 30, 2018, accessed May 07, 2019, https://thehistoryoftheweb.com/postscript/pizzanet/.

[3] Amelia Lucas, “Starting Saturday, You Can Earn Free Domino’s Pizza for Eating a Slice from Pizza Hut,” CNBC, February 02, 2019, accessed May 07, 2019, https://www.cnbc.com/2019/02/01/you-can-earn-free-dominos-pizza-for-eating-a-slice-from-pizza-hut.html.

[4] Taylor Soper, “Starbucks Posts $6.1B in Q1 Revenue; Mobile Order-ahead Usage Grows Slightly to 11% of U.S. Transactions,” GeekWire, January 26, 2018, , accessed May 08, 2019, https://www.geekwire.com/2018/starbucks-posts-6-1b-q1-revenue-mobile-order-ahead-usage-grows-slightly-11-u-s-transactions/.

[5] Mark A. Wasilefsky, “Mobile Ordering Races to a $38 Billion Future,” QSR Magazine, September 13, 2017, , accessed May 08, 2019, https://www.qsrmagazine.com/outside-insights/mobile-ordering-races-38-billion-future.

[6] Christopher Sebes, “Why Restaurants Should Embrace Omnichannel to Drive More Sales,” FSR Magazine, April 13, 2018, , accessed May 08, 2019, https://www.foodnewsfeed.com/fsr/expert-insights/why-restaurants-should-embrace-omnichannel-drive-more-sales.

[7] Ziosk, “Ziosk® Brings Power of Data, Secure Payment and Guest Convenience to Independent Restaurants,” AP NEWS, May 18, 2018, , accessed May 08, 2019, https://www.apnews.com/3d60d3cb778793014da6d6cfbd104c8e.