Posted by Brady Thomason, NetSuite Solution Manager, Restaurant & Hospitality
Mobile technology continues to reign supreme in today’s digital age, drastically changing the way many businesses operate, and the restaurant industry is no exception.
“In 2016, the total revenue from mobile app downloads, advertising and in-app purchases was $88 billion—this number is projected to pass $188 billion in 2020,” wrote MindSea.
According to Statista, 34% of online orders are $50 or more when using a smartphone or tablet app, indicating one of the highest growth rates compared to other industries.
For restaurant owners, creating an app is a great way to tap into these projected purchases. A study by Deloitte noted that 70% of respondents want a restaurant app that “knows them” and delivers personalized offers. Eighty-five percent said they viewed menus of restaurants before deciding where to eat.
It is clear that mobile is a burgeoning trend for restaurants, but the question remains: how can the potential investment help your business? Before you decide, consider these six things.
Weigh the cost.
An app is a great way to increase revenue, inspire guest loyalty and promote brand visibility for your restaurant. However, how much to invest to build an app is a big decision. Who builds your app, how your app gets built and what you want your app to do impact how much you will pay.
There are several main types of apps with varying prices depending on how many functions the app serves; the more functions, the higher the build price.
On average, it costs from $1,000 to $10,000 to build a simple restaurant app with one function. More complex apps with multiple functions, such as processing payments and adding GPS capabilities, cost between $10,000 and $20,000, according to BuildFire.
Though these costs may seem high, a restaurant app can pay for itself.
Avoid form over function.
Never create an app for appearances. An app’s main purpose should be to perform a specific function for your restaurant that improves the guest experience.
An app should allow you to use push notifications to offer discounts and promote upcoming events at your restaurant. You can even tailor your notifications to suggest menu items from past orders.
This is not to say the app shouldn’t be attractive. There are several ways to build a good-looking app. First, use the décor and brand identity of your restaurant to determine the app’s style. The app should be an extension of your restaurant in a mobile form with beautiful photos of your restaurant and the dishes you serve.
Starbucks, Panera and Taco Bell have been named the best restaurant apps in 2019, by one outlet.
Determine your why.
When it comes to investing in a large marketing cost like an app, you must always have goals in mind. Are you looking to grow sales? Or, maybe increase guest retention? You could just want to boost your digital profile.
Whatever your end goal, your restaurant app should offer continuous interaction between you and your guests. And, your app should also improve your guests’ experience and promote loyalty to your brand, noted The Manifest’s blog on mobile app developments for restaurants.
According to AppInventiv’s “How Much Does it Cost to Build a Food-Delivery App like UberEats or GrubHub?” article, 67% of guests who order online are more likely to visit a restaurant. Additionally, an app that facilitates things such as online reservations, can increase your bookings, noted AppInstitute.com.
Plus, if developed properly, stated The Manifest, your app will ultimately create a circular pattern, leaving guests happy to comment, review and recommend your restaurant to others.
Simplify the ordering process.
In-app ordering and payment is a simple win for your restaurant because it allows clients to order food with minimal operational costs -- you do not need a staff member to complete the order.
Ordering from the app also decreases the congestion and wait times at your restaurant because guests can arrive and take food home more quickly. In a hospitality study by Deloitte, half of all guests prefer to pay by phone.
Starbucks, for example, combined an intuitive menu with online ordering to drive early adoption from users, delivering 23.4 million users including 14.5 million rewards members. According to Vox, 55 million people will make an in-app purchase on mobile. Of those people, 40% will make a purchase from Starbucks. In the first quarter of 2019, it accounted for 12% of transactions.
Five years prior, the Starbucks’ app garnered only 16% of its sales, or $1.6 billion. The ease of use has helped to rocket the app’s growth.
Consider loyalty and offer referrals.
Restaurant apps encourage loyalty and provide the opportunity for discounts and referrals for new guests. With an app, clients can connect directly to you since you are top of mind on their phone instead of competing in local search results.
Loyalty programs are a popular way to attract repeat business. In fact, over half of consumers will go out of their way to earn rewards for a discount.
Offering a rewards program like those of Panera or Chick-fil-A can be successful in driving repeat business. For more ideas on what types of discounts big chains offer, these restaurants offer free food and have the most loyal client base due to their rewards programs.
In-app coupons are another way to gain new sales. Even for big brands like fastfood chain Carl’s Jr., offering coupons had a direct return on investment. The restaurant offered a discount on a combo meal that had a 19% redemption rate. Carl’s Jr. earned $14 for every dollar it spent on the campaign.
Most guests want to know there’s a spot for them when they dine out. Allowing for mobile reservations by integrating Open Table or your own reservation system are a great ways to secure a table for them and offer promotions to these guests. Maybe it’s free appetizers or a discount for booking ahead of time – no matter the discount, the ease of booking helps bring in new guests.
Additionally, an app that facilitates online reservations can also increase your bookings, noted AppInstitute.com. People are making fewer phone calls. This means less staff is needed to answer the phone and manually book reservations.
While the online booking feature of an app isn’t much different than one on your website, it does offer push notifications. These notifications can easily confirm, cancel and alert guests of open tables, proving to be an advantage to get guests to fill seats.
As you decide what you want for your mobile app, remember that these improvements not only have the opportunity to add to the experience of your restaurant, they have the potential to increase your sales right away. So if you’re ready to ride this upward trend of online ordering and consumer spending on restaurants, get started: The return on your investment is waiting.