Digital commerce takes on Super Bowl

By Noah Glass, CEO of OLO

Baltimore’s Joe Flacco and San Francisco’s Colin Kaepernick will lead their teams onto the gridiron in New Orleans this Sunday for the opportunity to take home the coveted Vince Lombardi trophy. Whichever team emerges as the victor of Super Bowl XLVII, a growing number of fans will be picking up their smartphones, tablets, and laptops to order food for the big game. The true winner will be digital commerce.

In an article in Online Media Daily, Gavin O’Malley references a recent study by the Interactive Advertising Bureau (IAB), indicating that 26 percent of survey respondents plan to order takeout or delivery on Super Bowl Sunday. According to the IAB study, 50 percent of mobile users “now have at least one restaurant-specific app on their devices.” O’Malley goes on to explain, “like an online bookmark on steroids, apps are attractive to brands because they create a direct link between their services and consumers’ smartphones.”

In recent bylines for FastCasual.com and QSRWeb.com, I have highlighted some of the benefits of restaurant brands “going digital” with mobile apps and creating digital commerce experiences for their customers. Some of these benefits include: differentiating your brand from the competition, closing the gap between customer digital media time and digital media advertising spend, achieving more efficient and targeted marketing and customer engagement, implementing customer relationship management (CRM) at scale, and enhancing customer intelligence and real-time marketing capabilities.

While this age of digital commerce shows incredible promise, restaurants must make sure that they are truly going digital in the right way, by both laying a solid foundation for the long-term digital future ahead and protecting their core values.

Restaurants have always been in control of what ingredients they use in their recipes (e.g. the “secret sauce”) and have enjoyed a personal and direct relationship with their customers. The digital age is putting these core values at risk, however. Goliath restaurant technology providers are creating closed “walled garden” approaches to restaurant technology that lock a restaurant into a bundle of technology products, limiting the restaurant’s freedom of choice in technology and never truly offering “best of breed” solutions. “Online Marketplace” and “Daily Deals” websites and apps are seeking to insert themselves in between restaurants and their customers, relegating restaurants to the role of undifferentiated wholesalers and destroying a restaurant’s ability to practice CRM at scale.

These are not new threats. In fact, this is a cycle that one can witness in the larger retail category. But there’s good news. In a recent blog post about the rise of branded retailer mobile apps by mobile analytics startup Flurry, President & CEO Simon Khalaf explains that time spent on Retailer Apps grew more than five-fold over the past year, taking market share away from Online Markeplace (e.g. Amazon) and Daily Deals apps (e.g. Groupon), primarily (see chart below). This speaks to the power of brands developing high-quality digital experiences that differentiate them in the marketplace and directly connect the brand to its loyal customers. As Khalaf puts it, “To keep dollars flowing through their cash registers, retailers need to re-examine the consumer relationship from the ground up and through the lens of mobile-first.”

The lesson from this retail example is that brands must create their own digital customer experience through their own mobile apps. Not only is this approach critical to maintaining control of the customer relationship and forging a CRM platform to enable meaningful customer-brand engagement at scale, now customers are voting with their feet and choosing branded retailer apps over the aggregated marketplaces and daily deals sites. That means that both consumers and brands are yearning to come together and skip the middleman!

When going digital, restaurant brands, like their retail brethren, must be sure to preserve their freedom of technology by working with open and interoperable technology platforms. For example, brands interested in adding online and mobile ordering capabilities to their websites or mobile apps should do so with the help of a service provider that can integrate into multiple point-of-sale platforms. Building mobile and online ordering directly on top of one POS system (a seemingly harmless “bundled offering” from the POS provider) can ball and chain the brand to that POS system for the long-term and make it impossible for franchisees on another POS platform to participate in the integrated online and mobile ordering program.

Furthermore, restaurant brands must also preserve an independent relationship with their customers when going digital. Doing so means that restaurant brands must create their own, differentiated mobile apps that provide customers with value by letting them “Skip the Line” to have a better, faster experience in the store. These mobile apps also allow the brands to learn from the information that guests willingly share and create a CRM database that serves as the enabling foundation of targeted, location-aware, real-time interaction with the customer.

On this Super Bowl Sunday, launching a branded mobile app and differentiated digital commerce experience built on open and interoperable technology is the winning play for all restaurant brands.

 p.s. So what are football fans ordering this Sunday? The answer might surprise you. The IAB study found that 72 percent will order pizza and just 24 percent will order Buffalo wings. No wonder Papa John’s and Pepsi are sponsoring the title bout!

 Noah Glass is the Founder & CEO of online and mobile ordering provider OLO. Founded in 2005, OLO has raised $13.75M in funding from PayPal and leading venture capital firms. Highlighting OLO's innovation, Glass has been featured on Good Morning America, The Wall Street Journal, and ABC World News.

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