The Key to Off-Premises Sales? Digital Ordering | Food Newsfeed
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Applebee’s off-premises sales now make up 10 percent of total revenue

The Key to Off-Premises Sales? Digital Ordering

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Restaurants are driving customer satisfaction with new technology.
By Donna Cobb January 2019 Expert Insights

In the highly competitive restaurant industry, technology is what’s on the menu.

For starters, mobile apps let people order and pay on their smartphones and then walk in and pick up their food. Self-service kiosks allow consumers to customize orders with the a few taps of the screen. Online reservation tools show real-time waits for seating. Tableside tablets give diners the ability to signal their waiters.

The rise of digital dining means computer networks have to become the main course. With the proliferation of mobile devices, the amount of data moving through restaurant networks has ballooned. A slowdown in speed means lost business. With an agile and flexible network, restaurants can host apps and data across multiple clouds and accommodate a variety of devices.

Dine Brands Global upgraded its network infrastructure that connects more than 2,850 Applebee’s Neighborhood Bar and Grill and IHOP locations across the U.S. By elevating the role of the network, Dine Brands can address a growing customer demand. Data shows that about a quarter of Americans order takeout or delivery two times a week. Close to half of all dinners purchased from a restaurant are consumed at home.

The key to growing to-go and delivery sales is digital ordering

Consumers demand the convenience of ordering their favorite foods whenever and wherever they want and paying for it with the click of a button. That’s why IHOP revamped its takeout program last year with the national rollout of a fully integrated online ordering system through its website.

To ensure an exceptional carryout experience, the brand also began training and certifying restaurant staff members to be experts on every touchpoint of the to-go platform, called IHOP ‘N GO, from plating to packaging to guest service. Each IHOP restaurant has at least one team member certified in the program to ensure that every carryout order meets the same high-quality standard that guests have come to expect from eating at IHOP.

Applebee’s followed up by enhancing its to-go experience earlier this year with a redesigned mobile app and online ordering platform. Customers have noticed.

For the quarter ended September 30, 2018, off-premises business ignited sales growth for Dine Brands. At Applebee’s off-premises sales increased 37 percent and now make up 10 percent of total revenue. At IHOP, to-go comparable sales grew by 35 percent and to-go traffic by 26 percent.

Dine Brands has gleaned some insights from its online platform. For instance, the company has observed that bills for online to-go orders tend to be considerably higher than for call-ins. Evidence shows that when customers dwell more over the online menu, they purchase more.

Restaurants need delivery to gain—and maintain—market share

The next phase of Dine Brands’ off-premises strategy is delivery. It has become a consumer expectation, even at breakfast and lunch.

Third-party services, such as Grubhub, DoorDash and UberEats, are driving growth of digital delivery. IHOP has partnered with DoorDash to launch a national delivery program. Applebee’s is testing both third-party and staff delivery of meals. The casual brand expects its off-premises business to double from 10 percent to 20 percent of total sales over the next few years.

Fast-food chains Taco Bell and KFC are quickly adding delivery service to their restaurants, after parent company, YUM! Brands, invested $200 million in Grubhub. Taco Bell is ready to expand delivery after modernizing its network infrastructure, including guest WiFi, at more than 6,200 company and franchise locations across the U.S. The improvement included redundant connections and business continuity services because network downtime at any location or on a mobile app can lead directly to lost sales.

As restaurants expand their online order and mobile payment platforms, they are testing the next frontier of digital innovation. Starbucks is experimenting with refusing cash at a location in downtown Seattle. Its mobile payment and ordering app was a trailblazer in the industry and has been unquestionable success, representing about 30 percent of total transactions.

Smaller chains have already gone cashless. Sweetgreen, a high-end salad concept, stopped accepting cash last year at most of its locations and has found the policy has had no effect on the bottom line.

Restaurants are finding new ways to connect with their customers, which demands a computer network that is fast, secure and reliable. A successful technology strategy will require new network architecture. The main ingredients are software-defined and virtualized network services, hybrid connectivity and increased reliance on broadband Ethernet for direct access to the cloud.

Adopting advanced networking is key to driving customer satisfaction. As the restaurant industry has come to learn, cooking up new technology can be more important than rolling out a new menu item.

Donna Cobb is the Executive Director, Enterprise Marketing for Comcast Business, responsible for the development and implementation of winning marketing strategies and integrated sales and marketing programs. She is an accomplished marketing executive and business leader, experienced in developing strategic partnerships, implementing organizational change, and managing projects designed to transform the enterprise.