Are SMBs Ready For Mobile Order-Ahead?

Hungry consumers have been conveniently ordering takeout on their mobile devices for a few years now. Starbucks, Dunkin’ Donuts, Five Guys and many other “fast-casual” chains are receiving orders from their clients’ phones (or desktops) in branded apps or websites.

But can small and midsized businesses (SMBs) follow suit? Rolling out mobile order-ahead can involve big operational changes, and the road to innovation — or convenience, as it were — isn’t always clearly marked.

For established businesses, the investment in digital ordering technology makes sense: more and more consumers are walking around with mobile devices. The native eCommerce app has quickly gone from novelty to arguable necessity. In 2015, mobile order-ahead was an available feature for roughly 60,000 merchant locations across the U.S. That figure tripled in 2016 to 180,000.

Of course, smaller merchants are looking to get in on the action, but can they re-think their operations to accommodate new consumer demands? Will they be able to keep everyone happy? Few merchants properly anticipate the effort involved. New customers show up to their establishments expecting to walk in and out with purchases, while usual clients still line up, just as they did a couple months ago.

When introducing mobile order-ahead capabilities, the right level of preparation and resources can go a long way toward keeping frustrations at bay — on both sides of the cash register. That’s where mobile ordering solutions company FANS Entertainment, part of the Paysafe Group, comes into play. FANS recently launched GOLO, an online and mobile ordering platform designed to connect smaller merchants with local consumers. PYMNTS spoke with Jean-François Noël, CEO of FANS Entertainment and GOLO, about not only the operational impact merchants face with this new solution, but also its potential upsides.

Giving Merchants Access To eCommerce

The GOLO app and online platform launched earlier this year to help smaller businesses level the playing field as they compete with their larger counterparts. Noël said the solution is designed to help SMBs step up their eCommerce game — and encourage consumers to “go local” when shopping for goods — by creating a marketplace through which customers can submit orders for local pickup or delivery.

It is free to set up shop on GOLO. Merchants are only charged a transaction fee per order, which Noël said helps smaller businesses access the online marketplace at low cost.

“In a smaller merchant’s reality, very few are ready to invest $10,000, let alone $100,000, in an eCommerce website and a mobile ordering application,” Noël said. “GOLO provides a very secure environment, with all the benefits we’ve come to expect of online markets, at a very low cost.”

Are SMBs Ready For Mobile Order-Ahead Prime Time?

GOLO is currently operational in a number of Canadian metro areas, including Toronto, Quebec City and Montreal. While very popular among the food and restaurant sector, GOLO can be used by other merchants, too, from bakeries and florists to pharmacists.

Noël noted, however, that wanting access to an eCommerce marketplace does not mean shop owners are ready to dive in. “The first thing that many of our merchants realize is that they have to change the way they operate to meet the customer flow generated by the online ordering system,” he said.

Noël pointed to an early adopter of the GOLO solution, a Quebec City restaurant, which saw an increase in lunchtime orders after signing up for the service.

“Their success in attracting customers via the app created a chaotic environment in which they were having to recognize, process and prepare a previously unexperienced volume of orders, for customers who arrive expecting their takeout to be ready,” he said.

To help the client settle the chaos, the GOLO team shared lessons on how to better manage and accommodate the new volume of pickup orders. Recommendations included rearranging the restaurant’s counter so customers who placed orders using GOLO would have a designated section for pick up.

It’s not just operations that need to be refreshed when adapting for order-ahead, though. Product presentation and marketing also go a long way to attract consumer attention, according to Noël. The GOLO team often works with merchants to advise on how to best present their offerings — from food orders to flower arrangements. For many SMB merchants, offering online transactional capabilities is fairly new territory. Even basic advice, such as providing as much information as possible about the product and featuring only high-quality, well-shot images, is welcomed counsel.

Can SMBs Deliver?

GOLO is not solely a pickup app. Many shops are also using the service to offer delivery. But Noël wants everything on GOLO to be deliverable.  For that reason, the company is developing partnerships with mobile-friendly delivery services, and fine-tuning its API accordingly, to help merchants more easily connect with nearby delivery service providers without having to install new services.

Not surprisingly, Noël reports that finding delivery providers in urban areas is considerably easier than in suburban settings.  While there are certain businesses where a slow delivery can be forgiven, such as florists and bakers, consumers are less willing to tolerate a slow delivery when it comes to food orders at lunchtime.

“It doesn’t matter that you order flowers and get them two hours later,” he said. “But if you wait two hours for a sandwich, that’s a problem.”

The company is working with downtown partners to build more reliable delivery options. Once the technology kinks are ironed out, Noël believes GOLO will be able to more effectively address the challenges of suburban delivery.

Teachable Moments In Mobile Order-Ahead

The market for online ordering from restaurants alone is growing quickly. Data from The NPD Group found an 18 percent increase for digital food orders, including mobile apps, text messages and online ordering forms, since 2016. The NPD report noted 1.9 billion food orders were placed using digital methods, with a significant rise in orders placed using mobile apps.

With the mobile order-ahead market growing, the pressure is on for smaller merchants to deliver a smoother experience for their customers to enjoy frictionless orders. To make sure SMBs signing up are better prepared for this new technology, GOLO now shares with them the collective lessons learned from across its stores.

The company offers educational tools and resources to merchants, including guidelines for identifying and addressing potential changes and challenges. The company’s Merchant Support team can also help with any questions or queries.

In addition to having to re-engineer kitchen processes and front office setups, it’s also important for merchants to keep their staff up-to-date on how to actually handle mobile orders, Noël noted.

The average employee will not miss a client walking into a store, but the app’s notifications might go unnoticed during a busy, noisy lunch hour.

“In some cases, new staff are hired but training on mobile ordering is overlooked,” he said. “We have a training guide we give clients, and one of the items included is ‘don’t forget to train the new staff.’”

The Benefits of Mobile Ordering

GOLO offers merchants basic eCommerce and mobile order-ahead capabilities. Beyond these functions, Noël said, one of the more practical benefits of the GOLO platform for merchants comes from data insights. Most shop owners are too busy serving customers to monitor the average dollar value of each client, for example. GOLO works to address that blind spot by offering robust analytics on web and mobile activity.

“We can say to a high-volume customer, ‘On Monday, you’re going to receive an average of 15 new lunch orders for Type A,’ so they can make sure they have enough [supplies] and prepare in time,” Noël said.

While established merchants will usually already know how to handle rush periods, these data insights around peak times can offer SMEs the same level of data to plan their own inventory and staffing needs.

The solution also aims to help SMEs make more informed marketing decisions. For example, a recent client that joined GOLO operates a restaurant — and that can only seat a maximum of 24 customers at a time — is focusing its efforts on takeout. The GOLO analytics tool can offer insights into customer demographics. These insights can help the merchant create targeted marketing offers, such as promoting food items that are more popular with a certain age group.

Whether small businesses will be able to take on the major players of digital ordering remains to be seen. SMBs will also need to rely on their entrepreneurial adaptability to act and react quickly, because technology changes are fast paced. With more customers reaching for their phones to place orders on food, flowers, pharmacy goods and other items, it seems both merchants and payment solution providers are being pushed to learn the right lessons about mobile order-ahead implementation.

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About the Tracker

The PYMNTS.com Payments as a Service Tracker™ is designed to give an overview of the trends and activities of merchant platforms that not only enable payment processing of new and old technologies but also integrate with other features to improve the merchant’s experience, including customer engagement, security, omnichannel retail, analytics, inventory management, software and hardware management and more.