These Apps Mean You'll Never Wait in Line for Coffee Again
For the caffeine-deprived, nothing is more daunting than a 12-person line at Starbucks. Come December, though, there will be relief at about 150 Starbucks stores in Portland, Ore.—assuming customers are coherent enough to use a new preorder app that gives them a pickup time. Upon arrival “your beverage will be sitting there,” says Starbucks spokeswoman Linda Mills. “If we need to remake your beverage to make sure it’s the right temperature, we’ll gladly do it.”
Fast-food chains including McDonald’s, Taco Bell, Pizza Hut, Domino’s Pizza, Subway, and Dunkin’ Donuts are using, testing, or developing similar apps. Startups such as OrderAhead, a three-year-old company in San Francisco founded by former derivatives trader Jeffrey Byun, are assembling networks of merchants and taking a 5 percent to 10 percent cut of each transaction. (The typical app eats 3 percent to 10 percent.) “OrderAhead addresses latent demand. We’re enabling behavior that was not possible before,” says Byun, whose company has signed up thousands of merchants in places such as California, Seattle, and Washington, D.C.
Struggling mobile-payment startup Square, looking for more transaction fees, released its own preorder app for restaurateurs in New York and San Francisco in October and has signed up hundreds of businesses, says spokesman Johnny Brackett. Two years from now, every quick-service restaurant should have a mobile express lane, says Richard Crone, who heads researcher Crone Consulting. “All of them that have a chance of staying in business will have this,” he says.
With the Starbucks app, customers select their item and pickup location, then receive an approximate wait time. (OrderAhead allows users to select a pickup time.) Customers pay through a registered account, and the app displays recent orders so customers who tend to buy the same thing can do so quickly. With their permission, Square tracks users via GPS, so the order only hits the restaurant’s prep queue when the person is nearby. At Sprout Café in Palo Alto, customers who’ve downloaded OrderAhead’s app can cut their lunchtime wait for to-go sandwiches and salads from 45 minutes to seven, says owner Vinh Vi, who’s been using the app for almost three years. He says his mobile orders have almost doubled this year and now account for as much as 30 percent of his total traffic.
To retrofit their computer systems, redesign restaurants, customize the apps, and train employees to work with them, many stores have to spend about $25,000, Crone estimates—a significant sum for a lot of franchisees or mom and pop restaurants. Improved planning, however, will let them serve as many as 30 percent more customers, he says. Hudson Riehle, senior vice president of research for the National Restaurant Association, says mobile apps can nudge up spending by people age 18 to 34, who most frequently eat out but generally spend less than other age groups. It’s a boost that the restaurant industry, which grew less than 4 percent last year, could use. Restaurateur Jean Paul Coupal says the customers who’ve been testing mobile-order apps at two of his seven Coupa Cafes in the U.S. spend 50 percent to 80 percent more per order than those who don’t preorder, and on some days they account for as much as 15 percent of sales at each location. “We see a steady growth on these orders every day,” he says.
Some chains are using a separate line to handle all of a location’s mobile orders or making a dedicated waiting area. At Chick-fil-A, 130 of 1,850 locations are testing ordering apps from payment-systems maker NCR, and each has designated a parking space or two for customers so their mobile-ordered food can be delivered to their car. The Chick-fil-A app lets customers specify whether they need condiments, utensils, and napkins, which workers bag with the orders. “We’re fundamentally changing operations in many ways,” says Sherry Shirah, a customer service director at NCR.
There can be hiccups in rolling out the apps. Some restaurants have to type mobile orders manually into their internal transaction systems to process payments, and employees occasionally make errors. “It’s a change in process, and anything that disrupts the flow is a risk,” says Brian Stein, founder of Pervasive Path Consulting, a mobile researcher. Starbucks spokeswoman Mills says it takes baristas a little time to work mobile orders into their routines, but “the hardest part is just customer awareness, just getting them used to a different behavior and a different routine.”