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Online Ordering Systems *

Market Summary – Online Ordering Systems

Market Overview

Existing trends combined with the happenings of the pandemic caused major changes in the restaurant, golf, and hospitality industries, as many understand all too well. The result was a need and desire to accommodate online ordering for customers to fulfill delivery, pickup, order ahead, and onsite customer requests. While taking phone orders will suffice to an extent for specific restaurants, it’s likely many will reach a point when they choose to facilitate orders from digital channels.

Capsolve researched solutions that could help individual restaurants or restaurant groups as they fill or enhance this gap in their marketing and technology capabilities. Capsolve’s research covers 216 products and services across the globe to define the category of Digital Ordering Solutions. This research identified 95 features and capabilities that may be important across these industry segments to receive and fulfill these orders successfully.

Marketplace Context

The global restaurant industry is planning for its current needs and how they may change over the coming months based on local and economic conditions. Many restaurants and brands have made choices and created solutions to meet today’s needs. Others are researching and preparing for the new wishes of their respective communities.

More optimistically, while this creates significant amounts of change within a climate of limited resources, it also creates opportunity. Those companies able to dig deep and find the wherewithal and resources to compete should reap the rewards. Supporting this concept, numerous marketing and technology solutions have surfaced in recent years, creating more options concerning adding Online Ordering Systems for restaurants. This level of innovation supports the industry as it makes decisions about the services needed within their local communities.

Solution Paths

Changing your DOS may be less complicated than other core system changes, but the scope of these systems is increasing, and planning is always essential. The key element is deciding what solution you want to select as your new core element of technology. While it is not required to take this approach, the most common path is to choose a DOS that will support your most important strategic and tactical technology capabilities and then decide what new or existing technology should complement it. A few standard approaches enabled by today’s technology solutions within this category include:

• Comprehensive Core: A solution with multiple modules designed to provide a fully integrated approach to covering most or all online ordering needs. This may include a POS with a DOS module or treat both the POS and DOS and crucial components of the technology stack.
• Best Fit Core: A solution with multiple modules covering the minimum requirements in combination with important strategic capabilities. This might also provide a POS and DOS combination from one vendor but require less training and implementation due to a simpler feature set.
• Minimized Core: A solution typically covering the most crucial strategic and operational needs but providing significant flexibility to connect to other best-of-breed solutions to complement the core. Here, a POS may provide the core system, but it is then complemented by a DOS that covers only the crucial requirements.
• Best Strategic Fit: A solution balancing comprehensiveness and long-term strategic needs.

These solution paths are not necessarily mutually exclusive. Solutions within the marketplace may create the opportunity to combine one or more paths and meet more of your selection criteria. Appropriately formulating an RFP to share with potential vendors will help to ensure you ask the best questions specific to your business while allowing you to learn about the depth of each potential vendor partner.

Pricing Information

Numerous pricing models exist in the marketplace, and it is crucial to understand how each one will affect your total cost of ownership. The standard pricing structures are:

• Base Software Price plus a Maintenance Charge: This pricing is usually charged for on-premise software installed on local servers. It is generally charged based on the number of servers, user licenses, or user accounts. There is an ongoing charge for modifications and upgrades based on the percentage of the base software. This is not too common within this category.
• Subscription Price: This pricing is more common today with the adoption of Software-as-a-Service. The price is often charged annually, quarterly, or monthly and applied to each location or user account. This pricing is applied relatively often but is occasionally eliminated and replaced with a Transaction price.
• Transaction Price: These fees are based on the volume of activity flowing through the software and closely align with its usage. This type of pricing is usually experienced as part of a payment solution affiliation, where the POS is provided as part of the agreement. There may be any combination of a percentage and a flat fee per transaction. When applied, this model may include other fee components, such as payment transaction fees.

As expected, a combination of these pricing approaches may be applied to any given software.

Sales & Marketing Considerations

Online Ordering Systems are designed to be sales engines. They accept restaurant sales orders and introduce them to the inner workings of the business to get fulfilled. Any engine needs an input source to run effectively. Marketing programs play this role, providing interested diners the engine to buy. Therefore, you may consider whether your current or planned marketing programs will feed the engine appropriately and generate the desired results. A portion of the DOS companies have built complementary marketing features into their product and service offerings. As your restaurant designs a holistic approach to curating online orders, these may provide part of the needed adjustment to your new marketing and advertising programs.

Current Trends

The following suggestions are founded on the principles of being practical and quickly finding solutions to real-world issues and opportunities. These trends, and others that eventually replace them, may be useful when considering your purchase of Digital Ordering Solutions.

1. Consumer preferences continue to change in part due to the lingering effects of the pandemic.
2. Change Risk is High—The number of solutions in this category has grown rapidly in a short amount of time, increasing the risk of change for any given restaurant implementing online ordering technology. Furthermore, the average solution in this category has added many new features in recent years.
3. Processing payment at the time of purchase will decrease your financial risk associated with online orders. Still, it is important to know what happens if changes occur after the order is placed.
4. The breadth of payment types is increasing for many solutions in an effort to placate consumer demand for flexibility. Similarly, understanding how payment capabilities for a given solution affect pricing is crucial to estimating its total cost of ownership.
5. Businesses are changing processes to account for current economic conditions, the local business environment, and the realities of their limitations and opportunities.
6. Many technological solutions exist to assist your business in managing this new order management functionality.

Questions for the Future

As you ponder the future and what Marketing & Technology needs you may have, here are some questions your business may want to answer:

1. Am I managing customer data well for customers who purchase online?
2. Are marketplaces and their food delivery services appropriate for my business, and what criteria should I apply when selecting these providers?
3. Consumers expect change from restaurants. If I could rewrite how people buy food from a restaurant, what would I do differently?
4. What is the best individual or combination of online ordering solutions, given the uniqueness of my business?
5. How will my business interact differently with customers as a result of these marketing and technology changes?
6. What information or expertise sources could I rely upon to keep me aware of increasing or decreasing demand as consumer habits and technologies change?
7. How will my business position itself to take advantage of necessary and innovative solutions as it plans its own Roadmap?
8. How could I estimate the financial implications of either an investment or divestment in capabilities or business processes?
9. How will my business manage the changed or new responsibilities and systems that arise from taking digital orders?
10. How will my business manage employee compliance with changes in procedures?

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About this Report

This document reviews marketing information and capabilities of this category’s solutions and the surrounding technology ecosystem. It contains original content written by Capsolve to provide a perspective of current trends affecting one or more of the hotel, restaurant, golf, and country club industries. The analysis covers a statistically significant portion of the previously defined category marketplace.