The writer is editor of Fast Casual magazine.
Tossed, a fast-casual salad concept in Manhattan, boasts that it hosts the "world's first online salad bar."
Big deal, you say?
Mighty big, said chief executive Eric Schmitt. Tossed's Web site generates $65,000 a month in sales at its two units. That's a whole lot of green for greens.
"I don't think that ($65,000 a month) is a true depiction of online ordering for other markets," said Eric Schmitt, president and chief executive of Tossed. "Our stores are sort of an anomaly since they're downtown New York."
Camille's Sidewalk Café's top-selling online stores are downtown, too, said Carolyn Archer, senior vice president of operations. She said the majority of their Web-based customers are businesspeople leaving the office for a few minutes. "They order online because it's convenient."
Surprisingly, Camille's and Moe's Southwest Grill are two of just a handful of the 100-store-plus fast casuals marketing online ordering. Restaurants that don't offer Internet ordering are hurting their sales, said restaurant marketing expert Kamron Karington.
"You have this new generation coming up and they get a seizure unless they're next to a computer, and they are going to spend money at places that have online shopping," Karington said.
Karington compared the restaurant industry's position to the retail segment a decade ago. "Look at the growth on eBay and Amazon. Web-based purchases are growing year after year while retail sales are flat," he said.
Pizza Pan, a 100-unit Cleveland-based chain, launched its Web-ordering system in June. Mike DeGirolamo, the chain's director of franchise operations, said the system is designed to allow every operator of every store to tweak his menu and specials online. When customers enter their addresses, the system determines which store is closest to him and which menu offerings those customers see.
He expects online ordering to boost efficiencies at Pizza Pan in multiple ways.
"This will cut back on errors in the kitchen and increase our average ticket size," DeGirolamo said. "We want those Web pages to be selling pages for us. And really, we already know they do because (in our tests) we've seen ticket averages increase as much as 18 percent."
Tommy Woycik, president of Nextep Systems, which creates online ordering and self-service kiosk solutions, said some of his clients claim 50 percent of their sales come from online ordering. "That's a high number and is certainly not the norm. If somebody implements an online solution, they will see a gradual climb in sales of maybe 3 to 12 percent over three to six months."
He added, however, that people just won't come to the Web site and order. They need an incentive.
"When they first go live, they have to market the solution," Woycik said. "A good way to do that is to offer 10 percent off of the customer's first order and do some in-store marketing."
The online look
Atlanta-based Kudzu Interactive has built online ordering sites for Fatburger, Tony Romo's, Moes Southwest Grill, McAlister's and Subway. Kudzu president Jim Garrett said the company's Web-based solution is integrated with all the major POS systems.
In addition, Kudzu's application has the ability to instantly send emails to registered customers right before lunch. "Emails before lunch are very effective," Garrett said. "At Moes, we have seen as much as a 22-percent acceptance rate right before lunch with Moes."
Nextep is currently working with at least a dozen large fast-casual chains to develop self-order Web sites.
Instead of creating a basic Web-form interface, Nextep's solution gives sites rich color and graphics, Woycik said. Just as an employee would in the store, the Web-based ordering program upsells cheese and drinks. The consumer can even customize his sandwich.
O-Web developed Pizza Pan's site, where customers set up accounts including their address and payment information. Patrons order exactly what they want, including particulars such as no mayo on a sandwich, and state exactly when they want the order to arrive. For large orders, such as at an office, the names of each person can be placed beside each order on the ticket to ease distribution after delivery.
To simplify future transactions, each customer's order history is stored in the site's database. Should customers want the same thing, they need only click "reorder." The system also upsells customers based on past orders.
"We call that intelligent upselling," said Stan Garber, senior sales manager for O-Web Technologies. "Say I buy a salad. The system will ask me if I want to get breadsticks with that. It's programmed to ask if they'd like a Coke with that."
At Camille's, customers must log in or set up an account before proceeding. If a store in the consumer's area has the online service, the person is taken to Camille's online menu.
"The log-in system is a great data collection point for us," Archer said. "Our franchisee can use that for any direct mail piece or online marketing like if they wanted to do a birthday promotion."
Archer said it only cost $500 to develop its current Web-ordering format and the franchisees can offer online ordering for free. "Now all we do is plug in updates from time to time," she said.
For Pizza Pan and Tossed, the online ordering features have become selling points to potential franchisees.
"When selling new franchises, we've found that potential franchisees want an operation that uses new technology like online ordering and POS systems running sophisticated programs," DeGirolamo said. "They don't want to hear that we're just another pizza house. These are experienced business people who understand that the more an operation is automated, the more efficient it is and the more money you save."
Steve Coomes contributed to this article.
