Let’s face it, life as a consumer today can be somewhat frustrating. Given the advancements in mobile phones, the social web and auto-payments, by 2011 one would think interacting with local merchants would be a bit more, shall I say… enjoyable.
Yet here we are, still required to actually think about where we are going to eat, look up the merchant online, make the call, hope they answer, talk to the person (with possible language barriers), repeat the same thing I told them last time, read each number of my credit card and expiration date out loud, and then wait for my order with no idea when it will be ready.
Ever sit back and watch people as they are waiting for food in a restaurant or service at a local merchant? You’ll notice heir heads are down, palms out and thumbs moving. Most people I speak with seem tired of wasting precious moments of their life standing in line or being idle waiting for something; inevitably they resort to grabbing the closest thing they can find for distraction. Indeed, they are using some device to surf the web, text a friend or read an email.
In light of the recent $50 million Series E funding for GrubHub and all the hoopla over the daily deals space, I thought I would evaluate the state of the local commercial market and the current web options. Semil Shah does a fantastic job of starting a conversation about what is emerging on the merchant side of the equation, but since the local market is quite deep with numerous verticals this post will focus on the local restaurant and ordering experience from an end consumer point of view.
My goal is three-fold: First to describe where the market is currently; second to illustrate the inherent problems, and lastly to give an idea on the direction of where the local space is heading based on consumer and general societal trends.
The Current Local Consumer Experience
The current local consumer experience can be summed up by the word “discovery”. Observing the options established thus far, most are built for a consumer to use when they are looking for a “new ” food experience. Apparently we have become obsessed with creating a plethora of ways to find the new, whatever it may be. Also interesting is the realisation that most are already antiquated because they were designed with the online consumer in mind with little consideration of the mobile experience. This is why, as you will see below, web based ordering and communications with local establishments has yet to experience mainstream adoption.
- GrubHub, SeamlessWeb, Snapfinger and many others allow users to place orders online with local restaurants.
Daily Deal Sites
- Groupon, LivingSocial and the others bring users massively discounted deals on random things around the local community
- OpenTable is the king of online reservations for local restaurants
- Yelp, Urban Spoon and a few others allow people to research comments and recommendations on local places of interest
Social Discovery apps
- Downloadable apps help users find new places,including places others have checked into and commented on
It is obvious with a little research in the online ordering space for instance, a great chasm still exists. There are about 500,000 restaurants in the U.S. and 90,000 in Canada. About half are chain (franchise) stores. About half the chains supposedly have some kind of online and/or mobile online ordering system (custom apps) but as we go into these stores to inquire about online ordering, nobody at the store knows what we are talking about. SnapFinger has over 500,000 restaurants in it’s directory but you can only use it’s online ordering for about 30,000 of them. Grubhub (including it’s acquisitions –> CampusFood and AllMenus) has about 300,000 in it’s directory but only about 25,000 you can use online ordering. Eat24Hours estimates it has about 12,000 signed up for online ordering but when you check their directory there are lots and lots of restaurants listed as “closed”.
Going further, the user experience with current mobile ordering apps is atrocious. Here is an experience I had recently during a trip to San Francisco in which I reported back to our team . (specific names have been removed)
Mobile Ordering App A. To put it bluntly, they sucked. And their execution, amongst many others, is why “mobile commerce” has not taken off. The experience is just terrible and based on their current model there are just too many wires left unconnected. When I got to (local restaurant) I asked the guy at the counter if they accepted mobile ordering and payments and he said NO with a questioning look on his face. Interesting, I thought… because there they were right on the app.
Using a nicely designed mobile app I was able to browse many different cities, restaurants, categories, menus, etc.. I found (local restaurant) and after minutes of clicking and scrolling I ended up trying to buy a “beer” (didn’t allow me to actually determine what kind I wanted) from the mobile app as I sat right outside the restaurant on the patio. Yet, after going through the entire process and once I clicked purchase…. nothing happened. Pay $4 and nothing else? No one communicated back to me and no one brought out my beer. Seriously, nothing happened! Weirdly, I received a message from ______ through the app the next day saying “Hi Nick”. I responded with ” Hello” and then nothing else came back. This experience was just ridiculous….
Amazingly, this not-to-be-mentioned mobile app is being touted as a hot new app with great potential. Unfortunately I must disagree. The current online ordering websites are not any better, here is an perspective from a recent correspondence I had with a user of an online ordering site.
“…Should mention one more thing about online ordering at a restaurant with lots of chain stores. Most of the time you have to go to the brand (i.e. Subway, Five Guys, Pizza Hut, PF Changs, etc.) home website and then enter a zip code or some kind of locator information after which you find a store to order from. It’s not a local experience. It’s a top down kind of thing. I don’t think patrons like that. If I want to order something at the PF Changs in Bellevue, why do I have to navigate through all the PF Changs around the world? I’m in bellevue. Just show me the bellevue PFChangs.
So, bottom line is the only tried and true option for a consumer is to just look up a phone number and call ahead or show up in person – ya know, what we did back in 1970. This is a growing hassle and something needs to be done.
The Everyday Consumer
There is a certain disconnect right now in respect to 1) how we live as consumers and 2) available mediums for local merchants to connect with customers. It might help to review a few obvious aspects of the local consumer experience that, when brought to light, will allow us to discuss what is now possible. When I closely evaluate someone going about their everyday life I see peculiar phenomena not currently leveraged by technology. First, people frequent the same places on an ongoing basis. They go to the same coffee shops, restaurants, retail outlets, etc… you get the picture. We are creatures of habit and if you stop for a moment in your own life you will start to see how you do this as well. Second, at these places we mostly order the same things – lattes, pepperoni pizzas, t-shirts… you get the picture. Again, we are very habitual creatures. Think about what types of things you are ordering repeatedly… Third, people love to be identified, called by name and have “uniquely personalised” experiences. We love to feel special, to feel “in” and to feel like we have been upgraded. When you walk into a bar or restaurant, how much better do you feel when the address you by first name? And lastly, we are naturally mobile. We are increasingly on the fly, in a hurry and the ever growing demand is that all aspects of our life keep up with our dizzying pace – using technology. When was the last time you left the house without your mobile phone?
With all that being said, a quick glance back to the current state of the local consumer will show a void in the space becoming clearer. Why is it that even though we are habitual consumers, all the consumer oriented options are built for discovery? Why is it the industry is obsessed with bombarding our email boxes with half off deals at places we will never go? Why is it that most local businesses live and die by their “loyal” customers, yet they keep getting trapped in the push oriented advertising? Ask them, they will tell you they mostly see they same people week in and week out. This was very interesting to us at Order SM. On the consumer side, we found they want control of who connected with them and marketed to them. We also found they demand immediacy when they want their food. The current options for customers are anything but immediate.
The everyday consumer expects a frictionless interaction, one without miscommunications and mistaken orders. The everyday consumer sends A LOT more texts than phone calls, and would greatly appreciate text based communications with local merchants, rather than having to speak to someone on the phone. (funny we have become this type of society). And consumers seek personalised interactions with local merchants, having them remembering previous orders creates an incredible consumer experience. Ironically, with advancements in technology there seems to be is a growing desire for the way it was “back in the day”.
Where the Local Experience Is Going – “I’ll Have The Usual”
The era of Repeatability is now upon us. All the pieces are in place – mobile devices, the mobile web, personalised networks and now direct web integration with local merchants. Since almost all people carry some type of mobile device, customers now have a medium to communicate with their favourite local merchants, just like they communicate with their friends. Now that we understand the everyday consumer, the idea of consumer repeatability driven through the mobile web starts to really make sense. Being able to text “I’ll have the usual” to a local restaurant and everything else is taken care of behind the scenes is now possible. Very Possible.
Think about it: just pull up the last correspondence in your phone and quickly send off a message to your favourite restaurants or cafes and say “Hey, I’ll have what I had last time, it was great!” Since order history is provide in detail they will be able to respond with “got it Nick, your sandwich will be ready in 5 min…. Pay now or pay when you get here”. Then you swing by, grab the order and go about your day.
Repeatability. I have written previously on how utilities make the world go around. This seems to be another area where utility comes into play – quick and easy communications with local merchants. “Just make it easier for me to repeat the things I do each day of the week” is a statement I am starting to hear more often. Just as the land line has been a century old utility for local merchants, something else is starting to displace wired communication – wireless communications.
That’s just kindergarten stuff. Now imagine if that information was (anonymously) shot out to a public feed, where ALL orders and commercial information was aggregated and displayed (possibly twitter style) so people could quickly see what types of things were being ordered, purchased and shared in a local area – in real time! One could drill down into a specific cafe and see what is “hot” that day. And if I found something interesting in that feed… with one simple touch I could purchase the same thing. It’s now possible.
What if a merchant could know all their customers by name? What if they could visually see Joe is a very loyal customer, this is his 55th visit, has an aggregated total spend of $1,445, his usual order is the #1 and tips well. To this merchant Joe is a very valuable customer. Again, building around repeatability is now starting to make a lot of sense.
To make this a reality we need to get over this group deal stuff. Loyalty is not found by offering bottom barrel prices; it is earned by providing quality products with great service. Part of “great service” is meeting consumers at their level, and opening communication channels so they can connect with you. Loyalty is going to be one of the most important actions in the next decade and every company – from small mum and pop shops to large tech behemoths – are looking for better ways to keep their customers.