Digital ordering is bigger business than delivery

June 12, 2019

Delivery seems to be the darling of the industry these days, but digital ordering is even more important, according to The NPD Group. It found that delivery — although growing — represents only 3 percent of total industry traffic, but by next year, digital orders will represent 8 percent of foodservice industry traffic.

"Digital ordering has raised the bar on convenience and with it the customer experience," David Portalatin, NPD food industry adviser and author of Eating Patterns in America, said in a company press release. "Digital ordering overall and apps have provided a path to market to consumers on a one-to-one basis and offer them a restaurant experience customized to their needs."   
Restaurant digital orders —  defined by meals or snacks ordered via mobile app, internet, or text message —  have grown by 23 percent over the past four years and now represent 3.1 billion visits and $26.8 billion dollars. NPD said digital orders will continue to grow by double-digits through 2020, with growth across all service modes including delivery, on premises and carryout, according to NPD's Delivering Digital Convenience report.
Although convenience is the top reason consumers choose digital ordering, NPD said other top reasons include: no waiting; the ability to order, pay, and have it ready; ordering at own pace and earning rewards/feeling valued. In addition to these reasons, since mobile apps represent 60 percent of digital orders, users of leading restaurant brand apps are also drawn to other motivations, like saving money, customizing orders, ordering on the way and earning rewards, according to the release.
Loyalty rewards have been successful for restaurant brands in getting customers to keep using their apps, NPD said. These type of loyalty programs offer a compelling reason for consumers to carry a larger number of restaurant apps on their phones, helping to ensure the success of newer entrants in gaining mobile phone real estate. An app on a phone helps increase usage because it's top-of-mind when a consumer is deciding what and where to order.

Topics: Mobile Payments, Restaurants

Companies: The NPD Group, Inc.

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