The Complete Guide to Online Ordering for Restaurants
How do I create an online food ordering system?
Here are a few steps to take when setting up your restaurant's online ordering system.
- Invest in a Restaurant Online Ordering System for Restaurants
- Build Your Online Ordering Menu
- Weigh Out the Pros and Cons of Third Party Apps and Delivery
- Create A New Guest Experience for Online Orders
- Market Your Online Ordering
- Train Your Staff to Handle Online Orders
- Gather Insights from Online Ordering Restaurant Reporting
In just a few short years, the popularity of takeout and delivery skyrocketed. Experts project that by 2023, the market will continue to expand at an incredible rate, with the online food delivery industry reaching an astonishing $1 trillion in revenue.
Throughout the past 5 years, many restaurants have taken advantage of this growth – adapting their operations, menus, teams, and marketing to online channels. But many sit-down restaurants, from family-style to fine dining, are now leaning in and setting up online food ordering, as well.
Whether your restaurant only experimented with off-premise ordering before it became a lifeline, or you’re a longtime online ordering champion looking for a growth strategy that increases your online ordering sales, you’ve come to the right place. In this guide to online food ordering, we’re breaking down everything you need to know to get started with online ordering, takeout, and delivery in the restaurant industry, today and tomorrow.
What is online ordering?
First, some history. At restaurants, your customer experience can be enjoyed one of two ways: On-premise or off-premise. An on-premise dining experience occurs within the four walls of your restaurant, while an off-premise dining experience happens wherever the guest is, typically occurring through online ordering, takeout, and delivery. Until the pandemic, off-premise dining often was largely regarded as an add-on, a strategy to supplement on-premise sales, expand a restaurant's reach, and build rapport with a new digital customer base.
Now, restaurants have learned that off-premise dining can be a huge revenue driver. In fact, off-premise dining for fast-casual restaurants increased from just over half of visits pre-pandemic to more than 80% just after. It has shifted a bonus dining experience to an essential part of any successful sales strategy – and restaurants are responding quickly.
According to a Technomic study, 78% of restaurant operators said off-premise business was becoming a strategic priority. Of the restaurateurs who had implemented off-premise ordering, 92% said it generated additional sales, 87% said they added new customers, 81% said off-premise has increased profitability, and 68% said it has increased average check size.
Additionally, the demographic that is most likely to value that convenience has an incredible amount of spending power. There are currently 84.8 million 19-37-year-olds in the U.S. with a collective spending power of $2.5 Trillion, according to YPulse.
For restaurants just beginning their journey into the wild world of off-premise dining and online ordering, the terminology can be confusing. So, for your convenience, we’ve defined some of the common words and phrases you’re bound to hear in conversations around off-premise dining.
Online Ordering FAQs
What is online food ordering?
Restaurant online food ordering is a way for customers to purchase meals online from a restaurant’s website. These items can then be picked up as takeout or can be delivered to the customer wherever they are if the restaurant offers delivery or works with a third-party delivery service.
What is mobile ordering?
Mobile ordering is often done through a mobile app and allows guests to order ahead, skip the line, and pick up food in-store or order delivery. Mobile ordering apps such as Toast TakeOut App can give your regulars an easy way to reorder the food they love.
What is takeout?
Takeout is food that is picked up and taken outside the restaurant to be enjoyed.
What is third-party delivery?
Third-party delivery refers to food delivery handled by a business on behalf of the restaurant, like UberEats, Doordash, or Grubhub. This method is known for its high commissions charged for each order.
First-party delivery refers to when a restaurant provides delivery without a third party, whether through their own drivers or through a partnership with their point of sale provider.
What is curbside pickup?
Curbside pickup is often done from the safety of your car. Customers order or call ahead, pull up to a restaurant, and a server delivers food to you as you wait in your car.
What is contactless delivery?
This refers to food that is delivered to a customer and no physical contact is made between delivery driver and guest. Oftentimes, contactless delivery also involves mobile payments, so there’s no handing back of cards or need for cash exchange.
Now that we’ve broken down the basics of what off-premise and online ordering entail, it’s important to understand why we’ve seen a rise in off-premise restaurant sales and how it’s impacted restaurant operations from coast to coast.
How to Set Up Online Ordering for Your Restaurant
Developing a successful online ordering strategy will be different for each and every restaurant.
Laying down a concept, a business plan, a staffing plan, a marketing plan, and a menu are the first steps of opening a restaurant. Start thinking of the shift to online ordering as your second chance at opening – but this time with a developed customer base in place to help propel you forward.
For full-service and fine dining restaurants – two types of restaurants whose ability to generate repeat visits rely heavily on ambiance and a memorable in-person dining experience – the move to an off-premise dining-only model will take thoughtful planning to create those same memorable experiences in a different package.
Restaurants must also understand that many guests aren’t looking for the same meals they might come into a restaurant for. Check sizes may be smaller due to the lack of alcohol sales (in most cases) and fewer opportunities to upsell.
Let’s get into the specific steps you need to take to learn how to set up online food ordering and how to take online orders, and start generating revenue for your business.
Invest in a Restaurant Online Ordering System for Restaurants
Online ordering platforms for restaurants provide a digital way for guests to order food directly from your restaurant’s website. Through an online food ordering system, your restaurant is involved in every step of the process; from setting up your menu to facilitating the order to completing the transaction. You are in the driver’s seat, communicating with guests throughout their entire online ordering dining experience.
If you offer off-premise dining options to guests but aren't currently using a restaurant online ordering system, you most likely use a third-party service or delivery platform. We will dive into the pros and cons of using third-party later in this guide. What you should know ahead of time is that these platforms charge commissions from restaurants on their platform, totaling between 15-30% of each check.
The best online ordering systems for restaurants should allow you to customize your website to fit your specific brand, providing clear CTAs, a mobile-optimized version for guests ordering through their phones, and the ability to optimize your menu so it is included in search engines. Providing a seamless online experience for your guests through a well-optimized restaurant website will help them find exactly what they’re looking for and guide them to purchase without friction.
On the back end, your online ordering platform should streamline your operations with direct POS and kitchen integrations, and grow your sales with upsell capabilities, and loyalty and marketing integrations.
Build Your Online Ordering Menu
Even when guests are eating off-premise, your menu is still the core of your dining experience.
You’ll want to create an online ordering-specific menu, but no need to go about reinventing the wheel. Your online ordering menu can be the same as your dine-in menu, or be a simplified version of that menu.
If you’re simplifying, this is called a minimum viable menu (MVM). A minimum viable menu is a smaller, condensed version of your menu whose items still offset overhead throughout the business and gives customers attractive options. It is the smallest menu you can build that simultaneously creates customer value and showcases what works and what doesn’t.
When switching to online- or digital ordering, you should prioritize popular, profitable menu items that will be easy to transition to takeout and delivery meals. In menu engineering terms, this means keeping your stars and your puzzles. You could also focus on reimagining your top 10 to 15 menu items in order to limit inventory spend and make your kitchen process more efficient.
With a detailed view of your menu items’ profitability and popularity, you can easily identify your top 10 dishes. Learn how to do that (and what stars and puzzles are) in this Menu Engineering Course.
Here’s a breakdown of what to consider when deciding what goes and what stays on your MVM:
Measuring menu item profitability involves calculating menu item food cost and menu item food cost percentage. You can learn how to calculate the profitability of your menu items here. Profitability can also be achieved by creating new dishes that stretch the ingredients you already have or what you can purchase in bulk. This will help keep your inventory costs low, eliminating the need to purchase new supplies for your off-premise menu.
Take historic sales data into account and feedback from customers about their favorite things to order. Which menu items do your guests order over and over again? At what time of day? Keep in mind that consumer preferences are bound to shift. When in doubt, reach out to your community on social, send a message to members of your restaurant loyalty program, or ask fellow restaurateurs what they’ve seen since adding off-premise ordering options.
Prioritizing delivery-friendly menu items is a key aspect of developing a solid online ordering menu. You don’t want your fries to show up at your customer’s house soggy after sitting in oil, or for their soup to be spilled outside its container and sloshing around in the bag. If a menu item doesn't travel well and can't withstand the voyage outside your restaurant to a waiting customer’s home, it may be worth excluding from your online ordering menu.
Besides understanding what your guests order the most frequently at your restaurant, you should also be exploring what guests are ordering from other restaurants. Your guests are still looking to experience great food, but they might want a bit of added comfort or entertainment as they eat from home. Maybe a make-your-own pizza kit or a build-your-own Bloody Mary will scratch that itch.
Menu Engineering Course
Weigh Out the Pros and Cons of Third Party Apps and Delivery
If you would never allow a server who is unfamiliar with your brand, menu, and values to interact with your best customers on a busy night, you should consider the implications that follow from giving third-party delivery vendors the keys to your off-premise dining experience.
Before the takeover of UberEats, Postmates, DoorDash, and other third-party delivery services, the only way to order food online was through a form on a restaurant’s own website. As delivery continues to rise in popularity and convenience, it's especially important to keep these services in mind and consider how they’re impacting your business.
Since getting orders to customers is the centerpiece of an off-premise strategy, now is a great time to analyze your delivery options. If you choose to work with a third-party delivery vendor, it’s standard for them to take a percentage of every order they send your way.
It’s no secret that third-party delivery apps have become a catch-22 for restaurateurs: They may have the power to improve sales and delivery capabilities, but they also take away a significant portion of revenue. It can either be a price of convenience or a surefire way to lose needed profit.
Here are some of the biggest players in the third-party food delivery space:
When using third-party solutions, orders are received on those respective delivery marketplace apps or websites. It is common practice for these marketplaces to keep guest data, and for restaurants to pay 15-30% in commissions per order. If you decide to use third-party apps consider using direct integrations with your POS so you can seamlessly manage orders and menus from one place and save your team time.
There are plenty of pros to using third-party food delivery services. These apps can serve as a great marketing tool because they expand your reach to customers within their apps who may have never heard of your restaurant's brand. And if you aren’t able to shoulder the cost of starting your own delivery service, the cost of doing business with a third-party vendor might be worth it.
Before deciding on third-party delivery service, ask your fellow restaurant operators what service they’re and which have been the most popular in recent weeks. It may be time to consider setting up your own delivery and takeout through your website. Doing this allows you to take ownership of the entire process.
But with commission-free Toast Delivery Services, a form of first-party delivery, orders are received via Toast online ordering, Toast Takeout App, or through the phone, restaurants have access to customer data and pay a flat delivery fee that can be shared with the customer.
Create A New Guest Experience for Online Orders
Foodservice and hospitality are social, service-oriented businesses. Off-premise diners don’t physically interact with your restaurant or your staff, so figuring out ways to show them genuine hospitality, build a relationship, and win their repeat business will involve some outside-the-box thinking. This is especially relevant if your guests are ordering through a third-party delivery service, and not your website.
What you need to do is incorporate elements of your restaurant’s ambiance and personality in every order taken off-premise, so guests get that personal experience both in and out of your restaurant. Something as simple as writing a personal note adds a human touch to an otherwise digital relationship. Joanne Chang’s Flour Bakery and Cafe often includes a handwritten “have a great day” on each order.
Other options include branded takeout containers, including a postcard picturing of your restaurant, a physical loyalty program card and sign-up form, decals, and stickers, or a guest feedback form that includes a link to your website and social channels.
Adding these personalized elements to your off-premise orders will make guests feel more connected to your restaurant, and help promote repeat visits.
It’s also worth putting a plan in place for customer support and how to handle a situation when things go wrong. Mistakes that used to be rectified by comping an appetizer or providing a free dessert require a different approach when your guests are miles away. Consider leaving a note in every order that encourages guests to reach out with feedback. You can also add this to the bottom of their receipts, or send a survey digitally.
Market Your Online Ordering
All these personalized elements add up to one thing. Marketing.
In addition to personalization, you should be thinking about the consistency of your messaging to concretely define your restaurant brand to prospective takeout and delivery diners. Due to the nature of these sales, it’s important to ensure that all your information online is accurate and up to date.
Where do customers go for information about your business? Some guests might visit your website first, others may check out your Instagram page. No matter where they’re looking, provide clear instructions on where to place online orders. To ensure that as many guests as possible order directly from your restaurant, rather than through third-party services, you have to communicate your preferences and promote accordingly.
The first step is to add your menu link to online marketing channels. Create a clear pathway on your website that puts your menu front and center with simple CTAs such as “Order Online”. If your online ordering solution offers a Google My Business integration, make sure to use it to publicize your menu.
We’ll dive deeper into social media promotions and website design and optimization later in this guide, but for now – make sure your social media profiles link back to your website in order to drive that traffic. Add links to your bios, make sure it’s in your pinned tweet on Twitter, and visible on your review sites.
As with your on-premise dining experience, you’ll want to track the success of your off-premise guest experience over time and make necessary tweaks along the way. Consistently comb through your profiles on online restaurant review sites like Yelp and TripAdvisor, solicit guest feedback directly via your restaurant CRM solution, track loyalty sign-ups, and analyze sales data from your restaurant POS or reporting solution.
Restaurant Marketing Plan
Gather Insights from Online Ordering Restaurant Reporting
Restaurant reporting gives you visibility into how your off-premise business strategy is working. Gathering insights will help you improve your tactics and inform strategic growth decisions in the coming months.
Questions regarding the most profitable menu items, staff scheduling, and inventory waste can all be answered by metrics collected through your POS system.
Metrics like your break-even point, the calculation that pinpoints how much you must make in sales to earn back an investment, will definitely change if you are adding online ordering to an existing revenue stream. You’ll also want to keep an eye on your prime cost because it represents the bulk of your restaurant’s controllable expenses such as vendor payments and staff pay, which are likely to shift.
By regularly calculating these performance metrics, you can identify areas that require improvement and what to change to bring in more cash flow through online ordering.
Train Your Staff to Handle Online Orders
When adding a new part to your business, your staff is going to have questions about the role they each play in this new dining experience. Be prepared to answer these questions and set aside time to provide guidance throughout this growth.
Putting together an off-premise training manual will help standardize your operating procedures and create a place for employees to answer their own questions about their role in the off-premise sales cycle. Your staff should be prepared to handle any incoming off-premise restaurant sales from the second a guest begins their order with your restaurant, all the way through their food being picked up for takeout or delivered to their door.
Be as clear and specific as possible in your training manual, don’t overlook the new processes and systems that accompany off-premise. Use this Training Manual Template to get started.
It is extremely beneficial to host a training session with all staff members who will play a role in the online ordering dining experience, from taking orders over the phone to the line. This training session will give you and your team an opportunity to talk through any questions or areas of concern. You may even need to hire a person dedicated exclusively to packing online orders.
Effective Ways to Increase Online Ordering Restaurant Sales
Restaurateurs are masters in the art of delivering delight through genuine hospitality, which historically has relied heavily on the opportunity to connect face-to-face with guests. Finding ways to develop that rapport digitally takes a little bit of creativity and a deep understanding of your customer's likes, dislikes, and behavior.
To market your restaurant effectively, you need to connect with your digital guests wherever they are on the web.
This customer communication strategy will largely be determined on what you know about your target customer’s behavior when they’re not at your restaurant. Say, for example, you have a large Gen Z and young Millennial customer base: Consider creating a Tiktok account or running sponsored posts on Instagram. If your customer base is older Millennial (35+) and Gen Y, SMS notifications, emailing, and Instagram makes sense to get the word out about your off-premise dining experience.
Developing relationships with your online customers creates loyal guests. Loyal guests lead to more repeat business and increased cash flow. According to McKinsey & Company, repeat online customers spend more than double the amount on online orders, on average $55.50, compared to new customers, who spend an average of $24.50.
It may seem simple, but constantly communicating your offerings to your customers is a great way to put your online ordering front and center. Atwater’s in Baltimore, MD makes a point to post their hours of operation every day on social media.
Announce the launch of your off-premise dining experience, or, if applicable, your shift to off-premise only, through the following three major channels: Social media, your website, and email.
Once you’ve gotten the word out about your new online ordering platform and have implemented your online ordering solution, you can focus on promotions to attract new customers or engage existing ones.
Build A Digital Presence for Your Restaurant
Restaurants are all about community. That should extend to guests who support your business but don’t physically pop in for a visit. Developing a digital presence, or a restaurant digital marketing strategy, regives you a way to build relationships with customers and market your brand online.
As restaurant customers become more digitally oriented, it’s critical to establish an online presence and create an identity that stands out. The three places you should devote your time, energy, and resources when developing a digital presence for your restaurant are your website, social media, and restaurant review sites.
Maximize the Discoverability of Your Restaurant’s Website
Website optimization is critical when standing up online ordering or shifting your revenue streams. A well-optimized website makes it easy for guests to discover your restaurant online and find exactly what they’re looking for. Clearly calling out the availability of online ordering options makes it easier for guests to order from you, creating a better ordering experience for them — and easier for you to keep revenue coming in.
Learn how you can start improving the performance of your website with this Restaurant Website Checklist.
You’ll want to make sure that your restaurant’s online ordering channel is optimized for both desktop and mobile. We’ve all been on a website before that isn’t configured for mobile: It’s slow, jumpy, and frustrating. These days, the majority of guests place orders directly from their mobile devices. Don’t inadvertently discourage guests from ordering by having an online ordering site that isn’t optimized for mobile users.
Build a Social Presence
Social media has always been an incredible tool for getting your restaurant brand in front of new eyes.
Step one is making sure that your online ordering information is in your profiles.
Add links to your Instagram, Twitter, and TikTok bios.
Write a Facebook post about your online ordering preferences or what platform or service you would prefer guests to order from.
Include your online ordering link in automatic replies on Facebook Messenger by going to your Facebook Business page, clicking "Inbox" and clicking "Automated Responses." Then you can craft an instant reply and contact information for your business.
Make sure your links are updated on Yelp and Google My Business.
Add Instagram story posts with your online ordering link attached.
Attach QR codes that lead to your online ordering website to social media posts and check presenters.
By ensuring that all your social media channels are updated with the correct information, you make it easier for guests to make it all the way to purchase.
Step two is regularly getting your brand in front of potential and existing customers by posting engaging content that generates business. Here are some essential tips to consider when sending posts out into the world.
Include calls to action for customers to support your online ordering. Provide links to online ordering or online gift cards. Include your phone number and website link in every post.
Highlight your loyalty program, and talk about how each order will get them closer to a fun prize or discount.
Highlight promotions like waiving minimum order sizes for online orders, offering curbside takeout, or contactless delivery.
If you don’t have time to create your own content to populate social channels, adapt your existing print materials to inform your customers of your online ordering capabilities. If you’ve designed flyers or promotional materials in the past, post pictures of them. Or, challenge your customers to a user-generated content contest and incentivize entries with a discounted meal or a gift card. The great thing about social media is that it helps generate word of mouth, which is one of the most powerful tools in online ordering marketing. If your audience is creating content for and about your restaurant, their followers will see it as well and increase your reach.
Now that you’ve improved your digital marketing, it’s time to focus on the aspect of online ordering that meets your customers face-to-face: Delivery.
Guide to Restaurant Social Media Marketing
Consider Running Restaurant Delivery on Your Own
Creating and operating your own delivery system also gives you greater control over the guest experience, has the potential to bring more traffic directly to your website, eliminates the fees that come with using third-party, and improves customer loyalty. Additionally, your POS system should be able to take care of direct-to-you online ordering for you.
Things you’ll have to consider when developing your own delivery service:
Availability of delivery vehicles
Staff dedicated to delivery
Delivery driver insurance
Delivery tracking system
For a detailed list of considerations to keep in mind when deciding if handling delivery on your own is right for your restaurant, check out this guide from Toast.
If setting up an independent delivery service is out of reach, Toast Delivery Services is a great option that offers delivery without having to hire drivers and provides a guest experience that’s integrated seamlessly with Toast Online Ordering software and Toast TakeOut. Toast Delivery Services was built to help restaurants take control of delivery, providing a flat rate without unpredictable commissions.
“Right now, restaurants think they’re generating a lot of business through using third-party delivery services, but in three years, they're going to realize that they gave away 30% of their business paying commission for these services.”
Owner, Tios Mexican Cafe
Expand your Online Ordering Offerings
Online Ordering Catering
Catering presents an opportunity for incremental revenue. It’s in catering’s very nature to be off-premise, so building a catering strategy may help drive long-term business.
Your catering offerings can consist of items that are on your current menu or your MVM. Now, in addition to considering the deliverability of these items, (which you’ve already done) you will have to think of how it would be prepared and served to a large group. It is also important for the catering side of your restaurant to mirror the similar quality and pricing of the original full-service menu. Make sure you have the inventory and interest before you begin your catering strategy.
Wine and Spirits
Many states and cities are introducing bills that allow bars and restaurants to sell alcoholic beverages with delivery or takeout orders.
If you are in one of the cities that has made these changes and have a liquor license that allows you to profit from these sales, promoting the availability of wine and spirits can help increase average order sales. Check the mandates in your area to see whether offering alcoholic drinks to your takeout and delivery customers is legal, and if it is, consider adding on this service.
Online Ordering is a Critical Shift
Online food delivery revenue is expected to show an annual growth rate of 8.29%, resulting in a projected market volume of U.S. $466,472 million by 2026. As delivery and takeout have become more popular, customer preferences and service standards have shifted. Satisfying those needs and predicting what they’ll want next will make your restaurant competitive and drive future business.
Like any business shift, you may need to attempt a few iterations of your menu, delivery system, and marketing tactics to find what works best for your restaurant. The key here is to keep experimenting.
Once you’ve gotten a hold of your online ordering strategy, you can take steps to expand your menu, move into retail, offer catering or family meals — anything you can think of. The great thing about online and off-premise ordering is that it will only continue to grow from here, and there are plenty of tech options to meet your vision for your restaurant.
Your expertise and sense of the industry got you this far — and it will carry you through the success of pivoting your business model to off-premise and sustaining it.
To learn more about optimizing off-premise dining, check out the Toast video course on online ordering & delivery.
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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.