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Cornell Hospitality Report Vol. 11, No. 7, March 2011 Online, Mobile, and Text Food Ordering in the U.S. Restaurant Industry by Sheryl E. Kimes, Ph.D., and Philipp F. Laqué

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Page 1: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

wwwchrcornelledu

Cornell Hospitality ReportVol 11 No 7 March 2011

Online Mobile and Text Food Ordering in the US Restaurant Industry

by Sheryl E Kimes PhD and Philipp F Laqueacute

Advisory Board

The Robert A and Jan M Beck Center at Cornell University

Cornell Hospitality Reports Vol 11 No 7 (March 2011)

copy 2011 Cornell University

Cornell Hospitality Report is produced for the benefit of the hospitality industry by The Center for Hospitality Research at Cornell University

Rohit Verma Executive DirectorJennifer Macera Associate DirectorGlenn Withiam Director of Publications

Center for Hospitality ResearchCornell University School of Hotel Administration489 Statler HallIthaca NY 14853

Phone 607-255-9780Fax 607-254-2922wwwchrcornelledu

Back cover photo by permission of The Cornellian and Jeff Wang

Niklas Andreacuteen Group Vice President Global Hospitality amp Partner Marketing Travelport GDS

Rarsquoanan Ben-Zur Chief Executive Officer French Quarter Holdings Inc

Scott Berman Principal Industry Leader Hospitality amp Leisure Practice PricewaterhouseCoopers

Raymond Bickson Managing Director and Chief Executive Officer Taj Group of Hotels Resorts and Palaces

Stephen C Brandman Co-Owner Thompson Hotels IncRaj Chandnani Vice President Director of Strategy WATGBenjamin J ldquoPatrickrdquo Denihan Chief Executive Officer

Denihan Hospitality GroupBrian Ferguson Vice President Supply Strategy and Analysis

Expedia North AmericaChuck Floyd Chief Operating OfficerndashNorth America

HyattGregg Gilman Partner Co-Chair Employment Practices

Davis amp Gilbert LLPSusan Helstab EVP Corporate Marketing

Four Seasons Hotels and ResortsJeffrey A Horwitz Chair Lodging + Gaming and Co-Head

Mergers + Acquisitions ProskauerKevin J Jacobs Senior Vice President Corporate Strategy amp

Treasurer Hilton WorldwideKenneth Kahn PresidentOwner LRP PublicationsKirk Kinsell President of Europe Middle East and Africa

InterContinental Hotels GroupRadhika Kulkarni PhD VP of Advanced Analytics RampD

SAS InstituteGerald Lawless Executive Chairman Jumeirah GroupMark V Lomanno President Smith Travel ResearchBetsy MacDonald Managing Director HVS Global Hospitality

ServicesDavid Meltzer Vice President of Global Business Development

Sabre Hospitality SolutionsWilliam F Minnock III Senior Vice President Global

Operations Deployment and Program Management Marriott International Inc

Mike Montanari VP Strategic Accounts Sales - Sales Management Schneider Electric North America

Shane OrsquoFlaherty President and CEO Forbes Travel GuideThomas Parham Senior Vice President and General Manager

Philips Hospitality AmericasChris Proulx CEO eCornell amp Executive EducationCarolyn D Richmond Partner Hospitality Practice Fox

Rothschild LLPSteve Russell Chief People Officer Senior VP Human

Resources McDonaldrsquos USAMichele Sarkisian Senior Vice President MaritzJanice L Schnabel Managing Director and Gaming Practice

Leader Marshrsquos Hospitality and Gaming PracticeTrip Schneck President and Co-Founder TIG Global LLCAdam Weissenberg Vice Chairman and US Tourism

Hospitality amp Leisure Leader Deloitte amp Touche USA LLP

Thank you to our generous Corporate Members

FriendsAmerican Tescor LLC bull Argyle Executive Forum bull Berkshire Healthcare bull Center for Advanced Retail Technology bull Cody Kramer Imports bull Cruise Industry News bull DK Shifflet amp Associates bull ehoteliercom bull EyeforTravel bull 4Hotelierscom bull Gerencia de Hoteles amp Restaurantes bull Global Hospitality Resources bull Hospitality Financial and Technological Professionals bull hospitalityInsidecom bull hospitalitynetorg bull Hospitality Technology Magazine bull Hotel Asia Pacific bull Hotel China bull HotelExecutivecom bull Hotel Interactive bull Hotel Resource bull International CHRIE bull International Hotel Conference bull International Society of Hospitality Consultants bull iPerceptions bull JDA Software Group Inc bull JD Power and Associates bull The Lodging Conference bull Lodging Hospitality bull Lodging Magazine bull LRA Worldwide Inc bull Milestone Internet Marketing bull MindFolio bull Mindshare Technologies bull PhoCusWright Inc bull PKF Hospitality Research bull Resort and Recreation Magazine bull The Resort Trades bull RestaurantEdgecom bull Shibata Publishing Co bull Synovate bull The TravelCom Network bull Travel + Hospitality Group bull UniFocus bull USA Today bull WageWatch Inc bull The Wall Street Journal bull WIWIHCOM bull Wyndham Green

PartnersDavis amp Gilbert LLP Deloitte amp Touche USA LLPDenihan Hospitality GroupeCornell amp Executive EducationExpedia Inc Forbes Travel GuideFour Seasons Hotels and Resorts Fox Rothschild LLP French Quarter Holdings Inc HVS Hyatt InterContinental Hotels Group Jumeirah GroupLRP PublicationsMarriott International IncMarshrsquos Hospitality Practice MaritzPricewaterhouseCoopersProskauer Sabre Hospitality Solutions Schneider Electric Southern Wine and Spirits of AmericaThayer Lodging Group Thompson HotelsTravelportWATG

Senior PartnersHilton WorldwideMcDonaldrsquos USAPhilips HospitalitySASSTRTaj Hotels Resorts and PalacesTIG Global

4 TheCenterforHospitalityResearchbullCornellUniversity

ExECuTivE SuMMary

Asurveyofthetop326USrestaurantchainsinallcategoriesfindstheindustrygraduallyadoptingelectronicordering intheformofonlinemobileandtextordersQuick-servicechainsmostnotablythosesellingpizzaandfast-casualchainsarefaraheadofothersegmentsinadoptingelectronicorderingparticularlyusingonlineapproaches

MobileappsarelesscommonalthoughtheiruseisgrowingAlthoughorder-placingfunctionalityislimited for mobile apps the fast-casual chains are leading the way in allowing customers to placeorders Nearly all restaurant chains have a Facebook presence but just 3 percent allowed orderingthrough that channel The advantages of electronic ordering include increased sales particularlythroughautomaticupsellingandbystoringorder informationsothatcustomersareencouragedtorepeattheirpreviousorderswithasingleclickOtherthanthecostofinstallationandoperationthechiefdisadvantageofelectronicorderingisthepotentialforamplifyingrushtimevolumewiththepotentialofoverwhelmingthekitchenCreatingaseparatelineforelectronicordersandpickupsisonewaytoaddressthatproblem

OnlineMobileandTextFoodOrderingin the US Restaurant Industry

bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 5

abouT ThE auThorS

Sheryl E Kimes PhD is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration where she has also served as interim dean (sek6cornelledu) In teaching restaurant revenue management yield management and food and beverage management she has been named the schoolrsquos graduate teacher of the year three times Her research interests include revenue management and forecasting in the restaurant hotel and golf industries She has published over fifty articles in leading journals such as Interfaces Journal of Operations Management Journal of Service Research Decision Sciences and Cornell Hospitality Quarterly She has served as a consultant to many hospitality enterprises around the world including Chevyrsquos FreshMex Restaurants Walt Disney World Resorts Rubyrsquos Diners Starwood Asia-Pacific and Troon Golf

Philipp Laqueacute is a student in the Master of Management in Hospitality program at the School of Hotel Administration (pfl23cornelledu) During his time at

Cornell University Philipp concentrated in multiunit restaurant management Prior to joining the MMH class of 2011 he worked for Starbucks Coffee in Germany and the trade publications FoodSerivce Europe amp Middle East and food-service Philipp completed internships at The Savoy Hotel London The Palace Hotel Beijing and Darden Orlando Philipp holds a Bachelor of Science Degree in International Hospitality Management from the

Ecole hocircteliegravere de Lausanne Switzerland

The authors and the Cornell Center for Hospitality Research greatly appreciate the sponsorship of Nationrsquos Restaurant News in supporting this research study

6 TheCenterforHospitalityResearchbullCornellUniversity

CornELL hoSPiTaLiTy rEPorT

Online mobile and text food ordering is growing in popularity among bothconsumersandrestaurantsbecauseelectronicorderingcanbenefitallconcernedConsumers are embracing electronic ordering because of its ease speed andprecision1 while restaurants see the potential for increased revenue and fewer

errorsmdashand they are responding to obvious consumer demand Electronic ordering has becomeparticularlysuccessfulforpizzachainsAfterlaunchinganupdatedonlineorderingsystemin2009Dominorsquosisnowthenumber-fouronlineretailerintheUS2andPapaJohnrsquoshasreportedthatover25percentofitstrafficcomesfromelectronicorders3

1MichaelJDixonSherylEKimesandRohitVermaldquoCustomerPreferencesandUseofTechnology-BasedServiceInnovationsinRestaurantsrdquoCornell Hospitality Report Vol9No7(2009)CenterforHospitalityResearchhttpwwwhotelschoolcornelleduresearchchrpubsreportsabstract-15027htmlandTechnomicldquoLeveragingSocialMediaandTechnologyUserdquoTechnomicAssociates20102ClaireCainMillerldquoOntheGoandHungryDinnerIsanAppAwayrdquoNew York TimesMay312010httpwwwnytimescom20100531technology31snapfingerhtml_r=1ampdbkviewedDecember2320103PapaJohnrsquosldquoOnlineOrderingLeaderPapaJohnrsquosFirsttoSurpass$2BillioninOnlineSalesrdquoMay32010httpirpapajohnscomreleasedetailcfmReleaseID=465852viewedDecember262010

OnlineMobileandTextFoodOrdering

in the US Restaurant Industry bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

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2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

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Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

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2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

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2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

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2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

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Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

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Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

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Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

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2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 2: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

Advisory Board

The Robert A and Jan M Beck Center at Cornell University

Cornell Hospitality Reports Vol 11 No 7 (March 2011)

copy 2011 Cornell University

Cornell Hospitality Report is produced for the benefit of the hospitality industry by The Center for Hospitality Research at Cornell University

Rohit Verma Executive DirectorJennifer Macera Associate DirectorGlenn Withiam Director of Publications

Center for Hospitality ResearchCornell University School of Hotel Administration489 Statler HallIthaca NY 14853

Phone 607-255-9780Fax 607-254-2922wwwchrcornelledu

Back cover photo by permission of The Cornellian and Jeff Wang

Niklas Andreacuteen Group Vice President Global Hospitality amp Partner Marketing Travelport GDS

Rarsquoanan Ben-Zur Chief Executive Officer French Quarter Holdings Inc

Scott Berman Principal Industry Leader Hospitality amp Leisure Practice PricewaterhouseCoopers

Raymond Bickson Managing Director and Chief Executive Officer Taj Group of Hotels Resorts and Palaces

Stephen C Brandman Co-Owner Thompson Hotels IncRaj Chandnani Vice President Director of Strategy WATGBenjamin J ldquoPatrickrdquo Denihan Chief Executive Officer

Denihan Hospitality GroupBrian Ferguson Vice President Supply Strategy and Analysis

Expedia North AmericaChuck Floyd Chief Operating OfficerndashNorth America

HyattGregg Gilman Partner Co-Chair Employment Practices

Davis amp Gilbert LLPSusan Helstab EVP Corporate Marketing

Four Seasons Hotels and ResortsJeffrey A Horwitz Chair Lodging + Gaming and Co-Head

Mergers + Acquisitions ProskauerKevin J Jacobs Senior Vice President Corporate Strategy amp

Treasurer Hilton WorldwideKenneth Kahn PresidentOwner LRP PublicationsKirk Kinsell President of Europe Middle East and Africa

InterContinental Hotels GroupRadhika Kulkarni PhD VP of Advanced Analytics RampD

SAS InstituteGerald Lawless Executive Chairman Jumeirah GroupMark V Lomanno President Smith Travel ResearchBetsy MacDonald Managing Director HVS Global Hospitality

ServicesDavid Meltzer Vice President of Global Business Development

Sabre Hospitality SolutionsWilliam F Minnock III Senior Vice President Global

Operations Deployment and Program Management Marriott International Inc

Mike Montanari VP Strategic Accounts Sales - Sales Management Schneider Electric North America

Shane OrsquoFlaherty President and CEO Forbes Travel GuideThomas Parham Senior Vice President and General Manager

Philips Hospitality AmericasChris Proulx CEO eCornell amp Executive EducationCarolyn D Richmond Partner Hospitality Practice Fox

Rothschild LLPSteve Russell Chief People Officer Senior VP Human

Resources McDonaldrsquos USAMichele Sarkisian Senior Vice President MaritzJanice L Schnabel Managing Director and Gaming Practice

Leader Marshrsquos Hospitality and Gaming PracticeTrip Schneck President and Co-Founder TIG Global LLCAdam Weissenberg Vice Chairman and US Tourism

Hospitality amp Leisure Leader Deloitte amp Touche USA LLP

Thank you to our generous Corporate Members

FriendsAmerican Tescor LLC bull Argyle Executive Forum bull Berkshire Healthcare bull Center for Advanced Retail Technology bull Cody Kramer Imports bull Cruise Industry News bull DK Shifflet amp Associates bull ehoteliercom bull EyeforTravel bull 4Hotelierscom bull Gerencia de Hoteles amp Restaurantes bull Global Hospitality Resources bull Hospitality Financial and Technological Professionals bull hospitalityInsidecom bull hospitalitynetorg bull Hospitality Technology Magazine bull Hotel Asia Pacific bull Hotel China bull HotelExecutivecom bull Hotel Interactive bull Hotel Resource bull International CHRIE bull International Hotel Conference bull International Society of Hospitality Consultants bull iPerceptions bull JDA Software Group Inc bull JD Power and Associates bull The Lodging Conference bull Lodging Hospitality bull Lodging Magazine bull LRA Worldwide Inc bull Milestone Internet Marketing bull MindFolio bull Mindshare Technologies bull PhoCusWright Inc bull PKF Hospitality Research bull Resort and Recreation Magazine bull The Resort Trades bull RestaurantEdgecom bull Shibata Publishing Co bull Synovate bull The TravelCom Network bull Travel + Hospitality Group bull UniFocus bull USA Today bull WageWatch Inc bull The Wall Street Journal bull WIWIHCOM bull Wyndham Green

PartnersDavis amp Gilbert LLP Deloitte amp Touche USA LLPDenihan Hospitality GroupeCornell amp Executive EducationExpedia Inc Forbes Travel GuideFour Seasons Hotels and Resorts Fox Rothschild LLP French Quarter Holdings Inc HVS Hyatt InterContinental Hotels Group Jumeirah GroupLRP PublicationsMarriott International IncMarshrsquos Hospitality Practice MaritzPricewaterhouseCoopersProskauer Sabre Hospitality Solutions Schneider Electric Southern Wine and Spirits of AmericaThayer Lodging Group Thompson HotelsTravelportWATG

Senior PartnersHilton WorldwideMcDonaldrsquos USAPhilips HospitalitySASSTRTaj Hotels Resorts and PalacesTIG Global

4 TheCenterforHospitalityResearchbullCornellUniversity

ExECuTivE SuMMary

Asurveyofthetop326USrestaurantchainsinallcategoriesfindstheindustrygraduallyadoptingelectronicordering intheformofonlinemobileandtextordersQuick-servicechainsmostnotablythosesellingpizzaandfast-casualchainsarefaraheadofothersegmentsinadoptingelectronicorderingparticularlyusingonlineapproaches

MobileappsarelesscommonalthoughtheiruseisgrowingAlthoughorder-placingfunctionalityislimited for mobile apps the fast-casual chains are leading the way in allowing customers to placeorders Nearly all restaurant chains have a Facebook presence but just 3 percent allowed orderingthrough that channel The advantages of electronic ordering include increased sales particularlythroughautomaticupsellingandbystoringorder informationsothatcustomersareencouragedtorepeattheirpreviousorderswithasingleclickOtherthanthecostofinstallationandoperationthechiefdisadvantageofelectronicorderingisthepotentialforamplifyingrushtimevolumewiththepotentialofoverwhelmingthekitchenCreatingaseparatelineforelectronicordersandpickupsisonewaytoaddressthatproblem

OnlineMobileandTextFoodOrderingin the US Restaurant Industry

bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 5

abouT ThE auThorS

Sheryl E Kimes PhD is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration where she has also served as interim dean (sek6cornelledu) In teaching restaurant revenue management yield management and food and beverage management she has been named the schoolrsquos graduate teacher of the year three times Her research interests include revenue management and forecasting in the restaurant hotel and golf industries She has published over fifty articles in leading journals such as Interfaces Journal of Operations Management Journal of Service Research Decision Sciences and Cornell Hospitality Quarterly She has served as a consultant to many hospitality enterprises around the world including Chevyrsquos FreshMex Restaurants Walt Disney World Resorts Rubyrsquos Diners Starwood Asia-Pacific and Troon Golf

Philipp Laqueacute is a student in the Master of Management in Hospitality program at the School of Hotel Administration (pfl23cornelledu) During his time at

Cornell University Philipp concentrated in multiunit restaurant management Prior to joining the MMH class of 2011 he worked for Starbucks Coffee in Germany and the trade publications FoodSerivce Europe amp Middle East and food-service Philipp completed internships at The Savoy Hotel London The Palace Hotel Beijing and Darden Orlando Philipp holds a Bachelor of Science Degree in International Hospitality Management from the

Ecole hocircteliegravere de Lausanne Switzerland

The authors and the Cornell Center for Hospitality Research greatly appreciate the sponsorship of Nationrsquos Restaurant News in supporting this research study

6 TheCenterforHospitalityResearchbullCornellUniversity

CornELL hoSPiTaLiTy rEPorT

Online mobile and text food ordering is growing in popularity among bothconsumersandrestaurantsbecauseelectronicorderingcanbenefitallconcernedConsumers are embracing electronic ordering because of its ease speed andprecision1 while restaurants see the potential for increased revenue and fewer

errorsmdashand they are responding to obvious consumer demand Electronic ordering has becomeparticularlysuccessfulforpizzachainsAfterlaunchinganupdatedonlineorderingsystemin2009Dominorsquosisnowthenumber-fouronlineretailerintheUS2andPapaJohnrsquoshasreportedthatover25percentofitstrafficcomesfromelectronicorders3

1MichaelJDixonSherylEKimesandRohitVermaldquoCustomerPreferencesandUseofTechnology-BasedServiceInnovationsinRestaurantsrdquoCornell Hospitality Report Vol9No7(2009)CenterforHospitalityResearchhttpwwwhotelschoolcornelleduresearchchrpubsreportsabstract-15027htmlandTechnomicldquoLeveragingSocialMediaandTechnologyUserdquoTechnomicAssociates20102ClaireCainMillerldquoOntheGoandHungryDinnerIsanAppAwayrdquoNew York TimesMay312010httpwwwnytimescom20100531technology31snapfingerhtml_r=1ampdbkviewedDecember2320103PapaJohnrsquosldquoOnlineOrderingLeaderPapaJohnrsquosFirsttoSurpass$2BillioninOnlineSalesrdquoMay32010httpirpapajohnscomreleasedetailcfmReleaseID=465852viewedDecember262010

OnlineMobileandTextFoodOrdering

in the US Restaurant Industry bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

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Vol9No3Compendium2009

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2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

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2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

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Page 3: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

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4 TheCenterforHospitalityResearchbullCornellUniversity

ExECuTivE SuMMary

Asurveyofthetop326USrestaurantchainsinallcategoriesfindstheindustrygraduallyadoptingelectronicordering intheformofonlinemobileandtextordersQuick-servicechainsmostnotablythosesellingpizzaandfast-casualchainsarefaraheadofothersegmentsinadoptingelectronicorderingparticularlyusingonlineapproaches

MobileappsarelesscommonalthoughtheiruseisgrowingAlthoughorder-placingfunctionalityislimited for mobile apps the fast-casual chains are leading the way in allowing customers to placeorders Nearly all restaurant chains have a Facebook presence but just 3 percent allowed orderingthrough that channel The advantages of electronic ordering include increased sales particularlythroughautomaticupsellingandbystoringorder informationsothatcustomersareencouragedtorepeattheirpreviousorderswithasingleclickOtherthanthecostofinstallationandoperationthechiefdisadvantageofelectronicorderingisthepotentialforamplifyingrushtimevolumewiththepotentialofoverwhelmingthekitchenCreatingaseparatelineforelectronicordersandpickupsisonewaytoaddressthatproblem

OnlineMobileandTextFoodOrderingin the US Restaurant Industry

bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 5

abouT ThE auThorS

Sheryl E Kimes PhD is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration where she has also served as interim dean (sek6cornelledu) In teaching restaurant revenue management yield management and food and beverage management she has been named the schoolrsquos graduate teacher of the year three times Her research interests include revenue management and forecasting in the restaurant hotel and golf industries She has published over fifty articles in leading journals such as Interfaces Journal of Operations Management Journal of Service Research Decision Sciences and Cornell Hospitality Quarterly She has served as a consultant to many hospitality enterprises around the world including Chevyrsquos FreshMex Restaurants Walt Disney World Resorts Rubyrsquos Diners Starwood Asia-Pacific and Troon Golf

Philipp Laqueacute is a student in the Master of Management in Hospitality program at the School of Hotel Administration (pfl23cornelledu) During his time at

Cornell University Philipp concentrated in multiunit restaurant management Prior to joining the MMH class of 2011 he worked for Starbucks Coffee in Germany and the trade publications FoodSerivce Europe amp Middle East and food-service Philipp completed internships at The Savoy Hotel London The Palace Hotel Beijing and Darden Orlando Philipp holds a Bachelor of Science Degree in International Hospitality Management from the

Ecole hocircteliegravere de Lausanne Switzerland

The authors and the Cornell Center for Hospitality Research greatly appreciate the sponsorship of Nationrsquos Restaurant News in supporting this research study

6 TheCenterforHospitalityResearchbullCornellUniversity

CornELL hoSPiTaLiTy rEPorT

Online mobile and text food ordering is growing in popularity among bothconsumersandrestaurantsbecauseelectronicorderingcanbenefitallconcernedConsumers are embracing electronic ordering because of its ease speed andprecision1 while restaurants see the potential for increased revenue and fewer

errorsmdashand they are responding to obvious consumer demand Electronic ordering has becomeparticularlysuccessfulforpizzachainsAfterlaunchinganupdatedonlineorderingsystemin2009Dominorsquosisnowthenumber-fouronlineretailerintheUS2andPapaJohnrsquoshasreportedthatover25percentofitstrafficcomesfromelectronicorders3

1MichaelJDixonSherylEKimesandRohitVermaldquoCustomerPreferencesandUseofTechnology-BasedServiceInnovationsinRestaurantsrdquoCornell Hospitality Report Vol9No7(2009)CenterforHospitalityResearchhttpwwwhotelschoolcornelleduresearchchrpubsreportsabstract-15027htmlandTechnomicldquoLeveragingSocialMediaandTechnologyUserdquoTechnomicAssociates20102ClaireCainMillerldquoOntheGoandHungryDinnerIsanAppAwayrdquoNew York TimesMay312010httpwwwnytimescom20100531technology31snapfingerhtml_r=1ampdbkviewedDecember2320103PapaJohnrsquosldquoOnlineOrderingLeaderPapaJohnrsquosFirsttoSurpass$2BillioninOnlineSalesrdquoMay32010httpirpapajohnscomreleasedetailcfmReleaseID=465852viewedDecember262010

OnlineMobileandTextFoodOrdering

in the US Restaurant Industry bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

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Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

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Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

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Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

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2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

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Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

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Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 4: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

4 TheCenterforHospitalityResearchbullCornellUniversity

ExECuTivE SuMMary

Asurveyofthetop326USrestaurantchainsinallcategoriesfindstheindustrygraduallyadoptingelectronicordering intheformofonlinemobileandtextordersQuick-servicechainsmostnotablythosesellingpizzaandfast-casualchainsarefaraheadofothersegmentsinadoptingelectronicorderingparticularlyusingonlineapproaches

MobileappsarelesscommonalthoughtheiruseisgrowingAlthoughorder-placingfunctionalityislimited for mobile apps the fast-casual chains are leading the way in allowing customers to placeorders Nearly all restaurant chains have a Facebook presence but just 3 percent allowed orderingthrough that channel The advantages of electronic ordering include increased sales particularlythroughautomaticupsellingandbystoringorder informationsothatcustomersareencouragedtorepeattheirpreviousorderswithasingleclickOtherthanthecostofinstallationandoperationthechiefdisadvantageofelectronicorderingisthepotentialforamplifyingrushtimevolumewiththepotentialofoverwhelmingthekitchenCreatingaseparatelineforelectronicordersandpickupsisonewaytoaddressthatproblem

OnlineMobileandTextFoodOrderingin the US Restaurant Industry

bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 5

abouT ThE auThorS

Sheryl E Kimes PhD is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration where she has also served as interim dean (sek6cornelledu) In teaching restaurant revenue management yield management and food and beverage management she has been named the schoolrsquos graduate teacher of the year three times Her research interests include revenue management and forecasting in the restaurant hotel and golf industries She has published over fifty articles in leading journals such as Interfaces Journal of Operations Management Journal of Service Research Decision Sciences and Cornell Hospitality Quarterly She has served as a consultant to many hospitality enterprises around the world including Chevyrsquos FreshMex Restaurants Walt Disney World Resorts Rubyrsquos Diners Starwood Asia-Pacific and Troon Golf

Philipp Laqueacute is a student in the Master of Management in Hospitality program at the School of Hotel Administration (pfl23cornelledu) During his time at

Cornell University Philipp concentrated in multiunit restaurant management Prior to joining the MMH class of 2011 he worked for Starbucks Coffee in Germany and the trade publications FoodSerivce Europe amp Middle East and food-service Philipp completed internships at The Savoy Hotel London The Palace Hotel Beijing and Darden Orlando Philipp holds a Bachelor of Science Degree in International Hospitality Management from the

Ecole hocircteliegravere de Lausanne Switzerland

The authors and the Cornell Center for Hospitality Research greatly appreciate the sponsorship of Nationrsquos Restaurant News in supporting this research study

6 TheCenterforHospitalityResearchbullCornellUniversity

CornELL hoSPiTaLiTy rEPorT

Online mobile and text food ordering is growing in popularity among bothconsumersandrestaurantsbecauseelectronicorderingcanbenefitallconcernedConsumers are embracing electronic ordering because of its ease speed andprecision1 while restaurants see the potential for increased revenue and fewer

errorsmdashand they are responding to obvious consumer demand Electronic ordering has becomeparticularlysuccessfulforpizzachainsAfterlaunchinganupdatedonlineorderingsystemin2009Dominorsquosisnowthenumber-fouronlineretailerintheUS2andPapaJohnrsquoshasreportedthatover25percentofitstrafficcomesfromelectronicorders3

1MichaelJDixonSherylEKimesandRohitVermaldquoCustomerPreferencesandUseofTechnology-BasedServiceInnovationsinRestaurantsrdquoCornell Hospitality Report Vol9No7(2009)CenterforHospitalityResearchhttpwwwhotelschoolcornelleduresearchchrpubsreportsabstract-15027htmlandTechnomicldquoLeveragingSocialMediaandTechnologyUserdquoTechnomicAssociates20102ClaireCainMillerldquoOntheGoandHungryDinnerIsanAppAwayrdquoNew York TimesMay312010httpwwwnytimescom20100531technology31snapfingerhtml_r=1ampdbkviewedDecember2320103PapaJohnrsquosldquoOnlineOrderingLeaderPapaJohnrsquosFirsttoSurpass$2BillioninOnlineSalesrdquoMay32010httpirpapajohnscomreleasedetailcfmReleaseID=465852viewedDecember262010

OnlineMobileandTextFoodOrdering

in the US Restaurant Industry bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

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Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

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Complete program information and applications available online

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Page 5: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 5

abouT ThE auThorS

Sheryl E Kimes PhD is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration where she has also served as interim dean (sek6cornelledu) In teaching restaurant revenue management yield management and food and beverage management she has been named the schoolrsquos graduate teacher of the year three times Her research interests include revenue management and forecasting in the restaurant hotel and golf industries She has published over fifty articles in leading journals such as Interfaces Journal of Operations Management Journal of Service Research Decision Sciences and Cornell Hospitality Quarterly She has served as a consultant to many hospitality enterprises around the world including Chevyrsquos FreshMex Restaurants Walt Disney World Resorts Rubyrsquos Diners Starwood Asia-Pacific and Troon Golf

Philipp Laqueacute is a student in the Master of Management in Hospitality program at the School of Hotel Administration (pfl23cornelledu) During his time at

Cornell University Philipp concentrated in multiunit restaurant management Prior to joining the MMH class of 2011 he worked for Starbucks Coffee in Germany and the trade publications FoodSerivce Europe amp Middle East and food-service Philipp completed internships at The Savoy Hotel London The Palace Hotel Beijing and Darden Orlando Philipp holds a Bachelor of Science Degree in International Hospitality Management from the

Ecole hocircteliegravere de Lausanne Switzerland

The authors and the Cornell Center for Hospitality Research greatly appreciate the sponsorship of Nationrsquos Restaurant News in supporting this research study

6 TheCenterforHospitalityResearchbullCornellUniversity

CornELL hoSPiTaLiTy rEPorT

Online mobile and text food ordering is growing in popularity among bothconsumersandrestaurantsbecauseelectronicorderingcanbenefitallconcernedConsumers are embracing electronic ordering because of its ease speed andprecision1 while restaurants see the potential for increased revenue and fewer

errorsmdashand they are responding to obvious consumer demand Electronic ordering has becomeparticularlysuccessfulforpizzachainsAfterlaunchinganupdatedonlineorderingsystemin2009Dominorsquosisnowthenumber-fouronlineretailerintheUS2andPapaJohnrsquoshasreportedthatover25percentofitstrafficcomesfromelectronicorders3

1MichaelJDixonSherylEKimesandRohitVermaldquoCustomerPreferencesandUseofTechnology-BasedServiceInnovationsinRestaurantsrdquoCornell Hospitality Report Vol9No7(2009)CenterforHospitalityResearchhttpwwwhotelschoolcornelleduresearchchrpubsreportsabstract-15027htmlandTechnomicldquoLeveragingSocialMediaandTechnologyUserdquoTechnomicAssociates20102ClaireCainMillerldquoOntheGoandHungryDinnerIsanAppAwayrdquoNew York TimesMay312010httpwwwnytimescom20100531technology31snapfingerhtml_r=1ampdbkviewedDecember2320103PapaJohnrsquosldquoOnlineOrderingLeaderPapaJohnrsquosFirsttoSurpass$2BillioninOnlineSalesrdquoMay32010httpirpapajohnscomreleasedetailcfmReleaseID=465852viewedDecember262010

OnlineMobileandTextFoodOrdering

in the US Restaurant Industry bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

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2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

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Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

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Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

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Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

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Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

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Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

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Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

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Vol9No3Compendium2009

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2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

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2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

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Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 6: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

6 TheCenterforHospitalityResearchbullCornellUniversity

CornELL hoSPiTaLiTy rEPorT

Online mobile and text food ordering is growing in popularity among bothconsumersandrestaurantsbecauseelectronicorderingcanbenefitallconcernedConsumers are embracing electronic ordering because of its ease speed andprecision1 while restaurants see the potential for increased revenue and fewer

errorsmdashand they are responding to obvious consumer demand Electronic ordering has becomeparticularlysuccessfulforpizzachainsAfterlaunchinganupdatedonlineorderingsystemin2009Dominorsquosisnowthenumber-fouronlineretailerintheUS2andPapaJohnrsquoshasreportedthatover25percentofitstrafficcomesfromelectronicorders3

1MichaelJDixonSherylEKimesandRohitVermaldquoCustomerPreferencesandUseofTechnology-BasedServiceInnovationsinRestaurantsrdquoCornell Hospitality Report Vol9No7(2009)CenterforHospitalityResearchhttpwwwhotelschoolcornelleduresearchchrpubsreportsabstract-15027htmlandTechnomicldquoLeveragingSocialMediaandTechnologyUserdquoTechnomicAssociates20102ClaireCainMillerldquoOntheGoandHungryDinnerIsanAppAwayrdquoNew York TimesMay312010httpwwwnytimescom20100531technology31snapfingerhtml_r=1ampdbkviewedDecember2320103PapaJohnrsquosldquoOnlineOrderingLeaderPapaJohnrsquosFirsttoSurpass$2BillioninOnlineSalesrdquoMay32010httpirpapajohnscomreleasedetailcfmReleaseID=465852viewedDecember262010

OnlineMobileandTextFoodOrdering

in the US Restaurant Industry bySherylEKimesandPhilippFLaqueacute

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

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Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

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The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 7: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 7

Thisreportreviewstherestaurantindustryrsquoscurrentstatusregardingelectronicorderingincludingrestaurantsrsquocurrentelectronicorderingcapabilitiesandexaminestheis-suesinvolvedinitsadoptionSubsequentreportswillpresenttheresultsofasurveyofUSconsumersrsquoattitudestowardanduseofdifferentelectronicorderingoptionsandasurveyofhowUSfast-casualandquick-servicerestaurantsareusingelectronicorderingprocessesandwhatexperiencetheyhavehadwiththesetechnologies

Wewillstartbyreviewingorderinganddistributionchannelsandvendorsandthendiscussthepotentialadvan-tagesanddisadvantagesofusingonlinetextingandmobilesourcesfororderingWewillnextconsidercustomeradop-tionandreactiontoelectronicorderingSubsequentlywewillpresenttheresultsofastudyoftheelectronicorderingcapabilitiesofthelargest326USrestaurantchainsWewillconcludewithadiscussionofissuesthatrestaurantoperatorsshouldconsiderbeforeimplementingelectronicordering

ElectronicDistributionChannelsandProvidersRestaurantscanofferelectronicorderingboththroughtheirowninternetormobilesiteandthroughmulti-restaurantsitesIfarestaurantwantstouseitsownsiteitneedstomakesure(1)ithasorderingcapabilityand(2)itdoesitsbesttothelinktheelectronicorderenginetothePOSsystemasdirectlyaspossibleDevelopingaproprietarysystemcanbeexpensiveintermsofdevelopmentcostsbutwouldofferamodestcostperorderoncethesystemisestablishedSeveralvendorsdevelopproprietarysystemsorsupportrestaurantsrsquoelectronicorder-ingsystemsincludingExit41KudzuSnapfingerONOSYSorderTalkQuikOrderandTakeOutTechnologiesAllofthesevendorsofferonlineorderingandmostalsooffermo-bileappsExit41KudzuSnapfingerandorderTalkalsosup-portFacebookorderingandtextorderingForthesesystems

upfrontdevelopmentcostswouldbefairlylowbutthecostperorderwouldbeacontinuingexpense

Multi-restaurant siteEvenifarestaurantestablishesitsownsiteitmayalsowanttoappearonamulti-restau-rantsitesuchasSnapfingercomorGrubhubcomWhilethesesitesincreasearestaurantrsquosvisibilitytheyalsoriskpossiblecommoditizationoftherestaurantandtheyincurper-ordercosts

Thelargestmulti-restaurantelectronicorderingsiteSnapfingerKudzulists28000restaurantsandothermajorplayersalsohaveasubstantialnumberofclientsCampus-Foodcom(25000restaurants)GrubHub(13000restau-rants)andDeliverycom(10000restaurants)ThevolumeofmobileapporderinghasgrownforthesesitesIn2010Snapfingerrsquosmobileordervolumeroseto17percentwithinoneyearofthelaunchofitsmobileapps4

Facebook orderingAlthoughmostrestaurantshaveaFacebookpresencefewofferFacebookorderingExcep-tionsincludePizzaHutwhichbeganFacebookorderingin2008JimmyJohnrsquosGourmetSandwichesandCaliforniaPizzaKitchen5FacebookuserscanalsoldquoLikerdquoaparticularmenuitemandtheirfriendscanclickintotherestaurantrsquosonlineorderingsystemiftheywanttoordertheldquoLikedrdquoitem6

4AlanJLiddleldquoMoreConsumersUsingMobileAppsforRestaurantsrdquoNationrsquos Restaurant NewsNovember92010httpwwwnrncomarticlemore-consumers-using-mobile-apps-restaurantsad=marketingviewedDecember2320105AlanJLiddleldquoRestaurantsUsingFacebooktoDriveOnlineOrdersrdquoNationrsquos Restaurant NewsNovember192010httpwwwnrncomar-ticlerestaurants-using-facebook-drive-online-ordersviewedDecember2320106Ibid

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

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2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

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2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

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Page 8: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

8 TheCenterforHospitalityResearchbullCornellUniversity

preparetheorderandbetterspreadouttheloadonthekitchenMoretothepointincreasedordervolumecanhelptherestaurantmakebetteruseofanyslackinkitchencapacity

(3) Improved order accuracy and productivityElectronicorderingcanhelprestaurantsimproveorderaccuracyandemployeeproductivityElectronicorderingim-provesorderaccuracysincetheordersareallinwrittenformandproductwasteandreworkshouldbereducedInadditionelectronicorderingreducesoreliminatestheordertakingfunctionfreeingemployeestofocusonproducinganddeliveringanorder

(4) Improved customer relationship managementFinallyelectronicorderingroutinesproviderestaurantopera-torswithkeycustomerinformationthatcanbeusefulfordevelopingpromotionstrategiesincludingtargetedpromotionsdesignedtobuildoff-peakdemandspecialsaimedatcertaincustomersegmentsandcouponingstrategiesWithelectronicorderingcustomersrsquodataarestoredautomaticallywhothecustomersareandhow(andwhether)tocontactthemwhattheyliketoorderhowmuchtheyusuallyspendandwhentheyliketoorder

PotentialDisadvantagesPossibledisadvantagesofonlinemobileandtextorderingincludeincreasedcostoverburdenedfacilitiesandpotentialcommoditization

Increased costsThecostofeachorder(typically5to7percentoftheorderamountpaidtotheorder-systemvendor)orthecapitalcostofbuildingasystemandintegrat-ingitwiththePOSmustbeconsideredespeciallyiftheelectronicorderingcannibalizestraditionalorderingmecha-nismsandaveragecheckremainsthesame

Impact on food quality and customer satisfactionWhileweanticipatethatelectronicorderingwillhelpwithworkflowitispossiblethatdemandwillnotbesmoothProductionpeaksmayoverwhelmthekitchentothedetri-mentoffoodqualityandcustomersatisfaction

ThekitchenoverloadissueisnothypotheticalAlthoughelectronicorderingsystemscanofferincentivesforoff-peakoradvanceorderingrestaurantsstillcannotcontrolwhenelectronicorderswillcomein(anymorethantheycancon-trolconventionalorders)IfelectronicorderspileontopofanormallybusytimefortherestaurantthekitchenmaynotbeabletokeepupwiththeincreaseddemandForexampleChipotleencounteredthisproblemwhenitlaunchedonlineorderingin2005InparticularanincreaseingroupordersoverburdeneditskitchensduringbusyperiodsTodealwiththisChipotleremodeleditsbusiestrestaurantswithalinededicatedtoonlineordersduringpeakperiodsWhenthe

Text orderingPapaJohnrsquosSubwayandMcDonaldrsquosareamongtherestaurantsthathavegivencustomersaspecifictextingnumbertoenterintotheirmobilephoneWhentherestaurantreceivesthetextorderaconfirmationtextissentbacktothecustomerwhocanthenjustgototherestauranttopickuptheorderAmongthemulti-restaurantsitesthatsupporttextorderingareExit41GoMoboandZingleWeexpecttextorderingtodiminishaspeopleinstallorderingappsontheirsmartphonesbutwestillseegreatpotentialintext-messagemarketing

PotentialAdvantagesofElectronicFoodOrderingWeseethefollowingfourpotentialbenefitsfromelectronicordering(1)increasedrevenue(2)improvedcapacitymanagement(3)improvedproductivityand(4)improvedtransactionalmarketingandcustomerrelationshipmanagement(1) Increased revenueElectronicorderinghasthepoten-

tialtoincreaserevenueinfourways(a)higheraver-agecheckthroughupselling(b)increasedvolume(c)increasedorderfrequency(byfacilitatingrepeatorders)and(d)prepaidorders

(a) Increased average checkRestaurantsusingelec-tronicorderingreportanaveragecheckincreaseof25percentprimarilyduetosuccessfulupselling7Upsellingisenhancedwithelectronicorderingsincetheupsellofferismadeautomatically

(b) Increased volumeRestaurantsusingelectronicorderingalsoreportmorefrequentordersandincreasesingroupandcateringordersbecauseoftheeaseofplacinganorderThesimpleadditionofnewdistributionchannelshasahighprobabilityofattractingcustomers

(c) Increased frequencyBythesametokenrestau-rantsusingelectronicorderingreportanincreaseinrepeatbusinessbecauseitiseasierforcustomerstoplacerepeatordersespeciallywhenthesystemstorespastorderssothatcustomerscansimplyclickontheirpreviousorder

(d) Increase in prepaid ordersWhencustomersplaceelectronicorderstheyoftenpayupfrontwithacredit(ordebit)cardmeaningthattherersquoslittlechanceforapersontoorderandnevershoworotherwisefailtopay

(2) Improved capacity managementCapacitymanage-mentisimprovedintwowaysIfordersareplacedaheadoftime(asisoftenthecasewithcateringandgrouporders)therestaurantcanbetterplanwhento

7Milleropcit

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

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Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

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Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

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Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

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2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

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Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

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Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

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2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 9: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 9

in-storepeakendstheonlineordersareswitchedbacktotheregularline8

Possible commoditizationAsweindicatedabovewhenarestaurantislistedonathird-partyorderingsiteitispossiblethatcustomersmightbemorelikelytoviewthatrestaurantasacommoditysincethereanumberofrestau-rantstochoosefrom

CustomerAdoptionofandReactionstoElectronicOrderingAsmadeclearbytheexampleofChipotlecustomershaveembracedonlinemobileandtextorderingA2010Technomicstudyof1000adultsshowedthat43percentofsurveyrespondentshadorderedonlinewithacomputerand23percenthadorderedfoodviatextmessage9Youngerconsumersweremorelikelytohaveusedelectronicorder-ingForexample60percentofrespondentsbetween18and34yearsoldhadorderedonlineasopposedto35percentofpeopleaged35oroverSimilarlyyoungerrespondentsweremorelikelytohaveorderedviatextmessage(29vs20)orbysmartphoneapp(8vs2)

The541percentofrespondentswhohadusedelec-tronicorderingfounditeasierthanspeakingtoaliveperson(18ndash34yearsold5935yearsandolder52)faster(18ndash345935+45)andmoreaccurate(18ndash344235+35)Respondentsalsoreportedthattheyfeltmorecomfortableplacingelectronicordersbecausetheydidnotfeelasrushedaswhentheyweretalkingwitharestau-rantemployee(18ndash343735+30)Theavailabilityofdiscountsandpromotionsinfluencedabout25percentofrespondents

Respondentswhohadnotusedelectronicorderingsaidtheypreferredplacingordersoverthephonewithaliveper-son(male42female39)andpreferredtoplaceordersinpersonevenifitmeantawait(male22female19)Lackofawarenessofonlinemobileortextorderingtech-nologyalsoplayedaroleAgoodportionofrespondentshadneverconsideredorderingonline(male30female40)orviatext(male15female26)Lackofavailabil-itywasalsoanissuesinceaboutaquarterofrespondentssaidthatnoneoftherestaurantstheypatronizedofferedelectronicordering

Distribution channel useMostcustomers(57)placeelectronicordersdirectlywiththerestaurantratherthanthroughmulti-restaurantsites10Ofthemulti-restaurantsitesTechnomicfoundthatDeliverycomhadthehighest

8SteveCoomesldquoChipotleTurnsCursesofOnlineOrderingintoBless-ingsrdquoNationrsquos Restaurant NewsMay122009httpwwwnrncomarticlechipotle-turns-curses-online-ordering-blessingsviewedDecem-ber2320109Technomicloc cit10Ibid

Restaurant customers have embraced online mobile and

text ordering particularly for fast-casual and quick-service

concepts

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

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Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 10: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

10 TheCenterforHospitalityResearchbullCornellUniversity

usage(11)followedbyDiningincom(7)campusfoodcom(6)Grubhubcom(6)andorderlunchcom(6)

OurStudyWestudiedtheonlineorderingcapabilityofthewebsitesofthelargest100casual-diningrestaurants66fast-casualrestaurants45full-servicemidscalerestaurants15fine-diningrestaurantsand100QSRsWeusedrecentdatafromTechnomicInctoidentifytherestaurants(listedintheappendix)Aspartofthisstudywelookedatwhethereachchain(1)offeredonlinefoodorderingcapabilities(2)hadaFacebookpresenceand(3)hadasmartphoneapp

OnlineFoodOrderingWewantedtofindoutthefollowingwhetheronlinefoodorderingvariedbyrestaurantsegmentandbycuisinetypetheextentofavailablepaymentoptionsandtheuseofupsellingscreensandwhetherthechainhadacustom-builtorderingsystemoriftheyemployedavendorWeevaluatedthewebsitesofthe326largestrestaurantchainsaslistedbyTechnomicWebelievetheresultsarealsoofusetoindependentoperatorswhofaceissuesidenticaltothoseofthechains

Wefoundthat23percentofthechainsaccepton-lineordersmostfrequentlyinthefast-casual(485ofallrestaurants)andthequick-servicesegments(220)Onlineorderingwasmuchlessprevalentinthecasual(180)andthefull-servicemidscale(89)segmentsanditwasnonexistentamongfine-diningchains(Exhibit1)

Asweindicatedattheoutsetpizza(607)andsandwich(619)restaurantsweremostlikelytoacceptelectronicorders(Exhibit2)Mexican(444)restaurantswerenotfarbehindinfrequencyfollowedbyAsianornoodle(333)andchicken(308)concepts

About36percentofrestaurantchainsmaintainedanupsellingscreenmostcommonlyinthemidscale(750)andcasual(500)segmentsascomparedwiththefast-casual(300)andquick-service(277)sectors(Exhibit3)

PaymentoptionsalsovariedAbouthalf(47)gavecustomerstheopportunitytoeitherpayonlineorattherestaurantaboutathird(32)permittedonlyonlinesettlementandtheremaining21percentdidnotofferonlinepayment(Exhibit4)Aswithupsellingscreenspaymentoptionsvariedbysec-torThreeofthefivecasualrestaurantsthatofferedonlineorderingdidnotofferonlinesettlementwhile

Midscale Casual Quick service Fast casual

89

180220

485

Exhibit 1

online ordering frequency by restaurant segment

Note Fine-dining restaurants recorded no online ordering

Exhibit 2

online ordering frequency by cuisine

Sandwich PizzaMexican

asian or noodle

Chicken

hamburger

Frozen dessert

70

60

50

40

30

20

10

0

Note Cafeteria and buffet donut and coffee and beverage restaurants recorded insufficient online ordering to appear on this graph

Exhibit 3

upselling screen frequency by segment

80

70

60

50

40

30

20

10

0

Midscale Casual Fast casual Quick service

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

2011 ReportsVol11No6HotelGuestsrsquoReactionstoGuestRoomSustainabilityInitiativesbyAlexSusskindPhDandRohitVermaPhD

Vol11No5TheImpactofTerrorismandEconomicShocksonUSHotelsbyCathyAEnzRenaacutetaKosovaacuteandMarkLomannoVol11No4ImplementingHumanResourceInnovationsThreeSuccessStoriesfromtheServiceIndustrybyJustinSunandKateWalshPhD

Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 11: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 11

onlyabout20percentoffastcasualandquickservicerestau-rantsdidnotofferthisoption

Aboutone-third(342)ofchainswithonlineorderingcapabilitieshadinstalledacustom-builtsolutionOurreviewofrestaurantwebsitesshowedtheuseofSnapfinger(171)orderTalk(79)ONOSYS(66)TakeOutTech(53)andExit41(53)aswellasnumeroussmallervendors

Facebook presenceNearlyalloftherestaurants(96)werepresentonFacebookbutonly3percentofferedorder-ingcapabilitiesthroughFacebook

AppsWebelievethatsmartphoneappspresentagreatopportunitygiventhatonly16percentoftherestaurantssurveyedofferedthemQSRswerefurtheraheadonthisasnearlyaquarter(220)hadappswhile182percentoffast-casualrestaurantsdidsoOnceagainfewrestaurantsintheothersegmentswereonboardwiththistrendfinedining(67)midscale(65)andcasual(50)(Exhibit5) 11

HoweverofferinganappdidnrsquotmeanthatcustomerscouldorderusingtheirsmartphoneOfthethirty-fourQSRandfast-casualrestaurantsthatofferedsmartphoneappsjust352percenthadorderingcapabilitiesassociatedwiththeappOrderingcapabilitywasmorecommoninthefast-casualsector(583)thanthequick-servicesector(227)Itshouldcomeaslittlesurprisethatallfiveofthequick-servicechainsthatofferedorderingcapabilitieswerepizzarestaurants

IssuestoConsiderAsrestaurantoperatorsconsiderwhethertoofferelectronicorderingwebelievetheyneedtoconsiderthefollowingissues

CostAsastartingpointrestaurateursshoulddeter-minewhetherthepotentialforincrementalbusinessfromelectronicorderingwillbesufficienttooffsettheirinvest-mentForthemomentwersquollsetasidethelikelihoodthatcustomerswillsimplyexpectarestauranttoofferonlinetextormobileappsfororderingastimegoesonEvidencefromthefieldindicatesthatbothvolumeandaveragecheckshouldincreasebutoperatorsshouldconsiderthisdecisioncarefullyanddevelopplansonhowtheywillpromotetheirelectronicorderingcapabilitytobuildvolume

Production capacityInconjunctionwithconsider-ationsofsystemcostoperatorsalsoneedtocarefullyconsid-erwhethertheirkitchencanhandletheincreasednumberofusersthatmayresultfromelectronicordersespeciallydur-ingpeaktimesforconventionaltrafficTherestaurantmightsetupadedicatedlineasChipotledid(assumingthereisspaceavailable)orconsideroff-siteproductionstreamlinedfoodproductionoranincreaseinpersonnelTheseissuesbecomepartofthecost-benefitconsideration

11ForafewexamplesoffinediningappspleaseseeappsfromAlainDucasseMichaelRouxJrandRuthrsquosChrisSteakHouse

Exhibit 4

relative frequency of online payment practices

online only

at restaurant only

both online and at restaurant

Exhibit 5

Frequency of smartphone apps by segment

Fine dining Midscale Casual Quick service Fast casual

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

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Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

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2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

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2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

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Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

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Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

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Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

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No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

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2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

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Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 12: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

12 TheCenterforHospitalityResearchbullCornellUniversity

tobudgetforsinceitrsquosnotpossibletopredicttheprecisevolumeofelectronicordersfrommonthtomonth

System integrationItisessentialthatelectronicordersareclearlycommunicatedtothekitchenThiscanbeac-complishedwithfullintegrationwiththePOSsystem(idealbutthemostcostly)orbyemailfaxortext(fairlylowcostbutastaffmemberneedstoensurethatthekitchenactuallyreceivestheorders)

Payment optionsRestaurantsshouldconsiderofferingonlinecredit(ordebit)cardpaymentforelectroniccustom-ersThisprovidesaddedconvenienceforthecustomersandalsohelpsspeedthetransactionforbothcarryoutanddeliveryorders

Completion-time estimatesWementionedpostingcompletion-timeestimatesinconjunctionwithgroupbusi-nessbutthiscanbehelpfulforallcustomersWhencustom-ersorderattherestauranttheycanseethequeueandre-maininformedregardinghowlongitwilltaketofulfilltheirorderOperatorsshouldconsiderofferingtimeestimatesforelectronicordersaswellThechallengeofhowtodevelopareasonablyaccuratetimeestimateshouldbeovercomeastheoperatorgainsexperiencewiththesystem

Placement on a multi-restaurant siteOnceares-taurantrsquosonlineorderingsystemisuptherestaurateurcandeterminewhethertobelistedonamulti-restaurantsiteasanadditionaldistributionchannelMulti-restaurantsitesoffertheadvantageofincreasedexposurebuttherestaurantthenbecomesjustoneofmanyrestaurantsforcustomerstochoosefrom

ConclusionInconclusionelectronicorderingoffersgreatpotentialfortherestaurantindustrymdashandalmostcertainlywillbecomeafeaturethatmostcustomersexpecttohaveavailabletothemOver40percentofUSadultshaveorderedfoodonlineandrestaurantsusingelectronicorderingreportincreasesinbothaveragecheckandorderfrequency12Settingasidecustomerexpectationstheadvantagesofelectronicorder-ing(improvedorderaccuracyimprovedproductivityandenhancedcustomerrelationshipmanagementabilities)willprobablyoffsetthecostsandoperationalchallengesformostrestauranttypesn

12Technomicloc cit

Delivery capacitySimilarconsiderationsapplytodeliverycapacityIfthekitchencanproducethefooditemsbutdeliverycannotkeepuptherestaurantmayhavetoadddeliverydriversorvehiclestoaccommodateincreasedelectronicorders

Group ordersRestaurateursmustalsotakeintoac-counttheeffectsofapossibleincreaseingroupandcateringordersOnewaytogetaheadoftheinevitableproductionbulgesfromgroupordersistoconsiderpoliciesregardinghowfaraheadgroupordersneedtobeplacedorhavethesystemgivecompletiontimeestimatestosetappropriateex-pectationsforthecustomerandtomanageproductionflow

Carryout concernsRestaurateursalsomustdeterminehowtohandletheircarryouttrafficiftheyoffercarryoutHavingcustomerswaitinlinetopickuptheirorderdefeatsthepurposeofelectronicorderingsincespeedisessentialTheChipotlesolutionofhavingaseparatelinealsoapplieshereOneIthacarestaurantrecentlysetupanentirelysepa-ratelocationforcarryoutorderstodirectthattrafficawayfromtheirmainoperationwhichincludesabarandtableservice(andavoidcloggingthebarentrancewithpeoplewaitingforpickuporders)

Make or buyOncethedecisionhasbeenmadetogoforwardwithelectronicorderingtherestaurantopera-tormustconsiderwhethertodeveloptheirownelectronicorderingcapabilitiesoruseanoutsidevendorAswithanymake-or-buydecisionthetrade-offbetweenupfrontcostsandoperatingcostsmustbeanalyzedaswediscussedearlier

Ifarestaurantwantstobuilditsownsystemthecompanymusttakeintoaccounttheneedforpaymentcarddatasecuritystandards(PCIcertification)theneedforaninternalteamtomaintaintheelectronicsystemandthecostsassociatedwithdevelopingandmaintainingasafeandsecurehostingenvironmentMostvendorsincludethesefea-turesandoftenincludesystemupgradesandimprovementsaspartoftheirfee

Restaurateurswhoplantoengageavendorshouldconsiderwhetherthevendoroffersaflatmonthlyfeeorapercentage-basedfeemodelMonthlyfeesmakeiteasiertobudgetanddependingonthevolumeofelectronicordersmaybealessexpensiveoptionPercentage-basedfeescanbealowercostoptionwhenelectronicvolumeislowbutthecostswillquicklyaddupasordervolumeincreasesInadditionpercentage-basedfeeapproachesaremoredifficult

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

2011 ReportsVol11No6HotelGuestsrsquoReactionstoGuestRoomSustainabilityInitiativesbyAlexSusskindPhDandRohitVermaPhD

Vol11No5TheImpactofTerrorismandEconomicShocksonUSHotelsbyCathyAEnzRenaacutetaKosovaacuteandMarkLomannoVol11No4ImplementingHumanResourceInnovationsThreeSuccessStoriesfromtheServiceIndustrybyJustinSunandKateWalshPhD

Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 13: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 13

Fast Casual Chains1 Panera BreadSaint Louis Bread Co 2 Chipotle Mexican Grill 3 Panda Express 4 Zaxbyrsquos 5 El Pollo Loco 6 Boston Market 7 Jasonrsquos Deli 8 Five Guys Burgers and Fries 9 Qdoba Mexican Grill 10 Einstein Bros Bagels 11 Moersquos Southwest Grill 12 McAlisterrsquos Deli 13 Fuddruckers 14 Au Bon Pain 15 Wingstop 16 Pei Wei Asian Diner 17 Baja Fresh Mexican Grill 18 Taco Cabana 19 Schlotzskyrsquos 20 Corner Bakery Cafeacute 21 Fazolirsquos 22 Noodles amp Company 23 Portillorsquos Hot Dogs 24 Taco Bueno 25 Brueggerrsquos 26 Rubiorsquos Fresh Mexican Grill 27 Donatos Pizza 28 Pollo Tropical 29 Cosigrave 30 Raising Canersquos Chicken Fingers 31 Paradise Bakery amp Cafeacute 32 Atlanta Bread Company 33 Back Yard Burgers 34 la Madeleine Country Frxench Cafe 35 DrsquoAngelo Grilled Sandwiches 36 Farmer Boys 37 Taco Del Mar 38 Wolfgang Puck Express 39 Jazzmanrsquos Cafe 40 Pick Up Stix 41 La Salsa Fresh Mexican Grill 42 Saladworks 43 Daphnersquos Greek Cafe 44 Pollo Campero 45 Sandellarsquos Flatbread Cafeacute 46 Tijuana Flats 47 Burgerville 48 Le Pain Quotidien 49 Fatburger 50 Salsaritarsquos Fresh Cantina 51 Wahoorsquos Fish Taco 52 Camillersquos Sidewalk Cafe 53 Which Wich Superior Sandwiches 54 RedBrick Pizza 55 Jerryrsquos Subs amp Pizza 56 ZPizza 57 Crispers

AppEndix

restaurant chains included in this study

58 Pancherorsquos Mexican Grill 59 Shanersquos Rib Shack 60 Pat amp Oscarrsquos 61 Leeann Chin 62 Straw Hat Pizza 63 Bajio Mexican Grill 64 Counter The 65 Salad Creations 66 Naturersquos Table Cafeacute

QSr Chains1 McDonaldrsquos 2 Subway 3 Burger King 4 Wendyrsquos Old Fashioned Hamburgers 5 Starbucks 6 Taco Bell 7 Dunkinrsquo Donuts 8 Pizza Hut 9 KFC 10 SONIC Drive-Ins 11 Arbyrsquos 12 Chick-fil-A 13 Jack in the Box 14 Dominorsquos Pizza 15 Dairy Queen 16 Papa Johnrsquos 17 Quiznos 18 Hardeersquos 19 Popeyes Louisiana Kitchen 20 Golden Corral 21 Carlrsquos Jr 22 Little Caesars 23 Whataburger 24 Churchrsquos Chicken 25 Old Country BuffetHomeTown Buffet 26 Long John Silverrsquos 27 Bojanglesrsquo Famous Chicken lsquoN Biscuits 28 Culverrsquos Frozen Custard 29 Papa Murphyrsquos Take lsquoNrsquo Bake Pizza 30 Jimmy Johnrsquos Gourmet Sandwich Shop 31 CiCirsquos Pizza 32 Baskin-Robbins 33 Del Taco 34 White Castle 35 Sbarro 36 Ryanrsquos Grill Buffet amp Bakery 37 Krispy Kreme 38 Captain Drsquos Seafood Kitchen 39 In-N-Out Burger 40 Tim Hortons 41 Jamba Juice 42 Chuck E Cheesersquos 43 Cold Stone Creamery 44 Krystal Company

45 Round Table Pizza 46 Checkers Drive-In Restaurants 47 Sizzler 48 Godfatherrsquos Pizza 49 Auntie Annersquos 50 Braumrsquos Ice Cream amp Dairy Stores 51 Rallyrsquos Hamburgers 52 PonderosaBonanza 53 Caribou Coffee 54 Taco Johnrsquos 55 Hungry Howiersquos Pizza 56 Souplantation amp Sweet Tomatoes 57 Lubyrsquos 58 Wienerschnitzel 59 Potbelly Sandwich Shop 60 Piccadilly 61 Firehouse Subs 62 Peetrsquos Coffee amp Tea 63 AampW All-American Food 64 Blimpie Subs amp Salads 65 Foxrsquos Pizza Den 66 Cinnabon 67 Charleyrsquos Grilled Subs 68 WesterN SizzliN 69 Jersey Mikersquos Subs 70 Peter Piper Pizza 71 Mazziorsquos Italian Eatery 72 Papa Ginorsquos Pizzeria 73 Jetrsquos Pizza 74 Smoothie King 75 Fresheumlns 76 Gattirsquos Pizza 77 TCBY 78 Coffee Bean amp Tea Leaf The 79 Carvel Ice Cream 80 Pizza Pro 81 Togorsquos Sandwiches 82 TacoTime 83 Nathanrsquos Famous 84 Sarku Japan 85 Pizza Inn 86 Penn Station East Coast Subs 87 Ben amp Jerryrsquos 88 Furrrsquos Family Dining 89 Ritarsquos Ice 90 Tastee Freez 91 Villa Fresh Italian Kitchen 92 Pizza Ranch 93 Pinkberry 94 Tropical Smoothie Cafeacute 95 LampL Hawaiian Barbecue 96 Marcorsquos Pizza 97 Haumlagen-Dazs 98 Rosatirsquos Pizza 99 KampW Cafeterias 100 Leersquos Famous Recipe Chicken

Continued on next page

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

2011 ReportsVol11No6HotelGuestsrsquoReactionstoGuestRoomSustainabilityInitiativesbyAlexSusskindPhDandRohitVermaPhD

Vol11No5TheImpactofTerrorismandEconomicShocksonUSHotelsbyCathyAEnzRenaacutetaKosovaacuteandMarkLomannoVol11No4ImplementingHumanResourceInnovationsThreeSuccessStoriesfromtheServiceIndustrybyJustinSunandKateWalshPhD

Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 14: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

14 TheCenterforHospitalityResearchbullCornellUniversity

Casual Chains1 Applebeersquos Neighborhood Grill amp Bar 2 Chilirsquos Grill amp Bar 3 Olive Garden 4 Red Lobster 5 Outback Steakhouse 6 TGI Fridayrsquos 7 Ruby Tuesday 8 Buffalo Wild Wings Grill amp Bar 9 Cheesecake Factory The 10 Texas Roadhouse 11 Red Robin Gourmet Burgers 12 PF Changrsquos China Bistro 13 Hooters 14 LongHorn Steakhouse 15 California Pizza Kitchen 16 Carrabbarsquos Italian Grill 17 Romanorsquos Macaroni Grill 18 OrsquoCharleyrsquos 19 Loganrsquos Roadhouse 20 Famous Daversquos 21 BJrsquos Restaurant amp Brewhouse 22 On The Border Mexican Grill amp Cantina 23 Mimirsquos Cafe 24 Uno Chicago Grill 25 Bonefish Grill 26 Maggianorsquos Little Italy 27 Carinorsquos Italian 28 Hard Rock Cafe 29 McCormick amp Schmickrsquos 30 Joersquos Crab Shack 31 Claim Jumper 32 Ninety Nine Restaurants 33 Cheddarrsquos Casual Cafe 34 Houlihanrsquos 35 Johnny Rockets 36 Benihana 37 Dave amp Busterrsquos 38 Chevys Fresh Mex 39 Lone Star Steakhouse amp Saloon 40 Old Chicago Restaurants 41 Champps Entertainment Inc 42 Buca di Beppo 43 Houstonrsquos 44 Beef lsquoOrsquo Bradyrsquos 45 Bertuccirsquos Italian Restaurant 46 Max amp Ermarsquos 47 El Torito 48 Elephant Bar Restaurant 49 Rainforest Cafe 50 Millerrsquos Ale House 51 Yard House 52 Legal Sea Foods 53 Islands Fine Burgers amp Drinks 54 Fox and Hound English Pub amp Grille 55 Smokey Bones Bar amp Fire Grill 56 Brio Tuscan Grille 57 Bubba Gump Shrimp Co Restaurant amp Market 58 Bravo Cucina Italiana

59 J Alexanderrsquos 60 Saltgrass Steak House 61 Black Angus Steakhouse 62 Bostonrsquos The Gourmet Pizza Restaurant amp Sports Bar 63 Grand Lux Cafe 64 Bahama Breeze 65 Abuelorsquos 66 Rock Bottom Restaurant amp Brewery 67 Pappadeaux Seafood Kitchen 68 Jimmy Buffettrsquos Margaritaville 69 Charlie Brownrsquos Steakhouses 70 Bar Louie 71 Il Fornaio 72 Damonrsquos Grill 73 Gordon Biersch Brewery Restaurant 74 El Chico Cafe 75 Lucillersquos Smokehouse Bar-B-Que 76 Quaker Steak amp Lube 77 Cheeseburger in Paradise 78 Benniganrsquos Grill amp Tavern 79 Wow Cafe amp Wingery 80 Tony Romarsquos 81 ESPN Zone 82 Chart House 83 Fatz Cafe 84 Tedrsquos Montana Grill 85 Cantina Laredo 86 Bugaboo Creek Steak House 87 Old Spaghetti Factory The 88 Uncle Juliorsquos 89 Granite City Food amp Brewery 90 Kona Grill 91 Don Pablorsquos 92 Landryrsquos Seafood House 93 Daily Grill 94 Sullivanrsquos Steakhouse 95 Carlos OrsquoKellyrsquos 96 Mellow Mushroom 97 Texas Land amp Cattle Steak House 98 House of Blues 99 Cheeburger Cheeburger 100 Black-eyed Pea

Concluded on next page

AppEndix

restaurant chains included in this study (continued)

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

2011 ReportsVol11No6HotelGuestsrsquoReactionstoGuestRoomSustainabilityInitiativesbyAlexSusskindPhDandRohitVermaPhD

Vol11No5TheImpactofTerrorismandEconomicShocksonUSHotelsbyCathyAEnzRenaacutetaKosovaacuteandMarkLomannoVol11No4ImplementingHumanResourceInnovationsThreeSuccessStoriesfromtheServiceIndustrybyJustinSunandKateWalshPhD

Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 15: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

CornellHospitalityReportbullMarch2011bullwwwchrcornelledu 15

Midscale Chains1 Pappas Bar-B-Q 2 Perkins Restaurant amp Bakery 3 Perkorsquos Cafe Grill 4 Ramrsquos Horn Family Restaurant 5 Original Pancake House The 6 Olgarsquos Kitchen 7 Kings Family Restaurants 8 LaRosarsquos Pizzeria 9 Le Peep 10 Marie Callenderrsquos Restaurant amp Bakery 11 Rib Crib BBQ amp Grill 12 Rubyrsquos Diner 13 Valentinorsquos 14 Village Inn 15 Waffle House 16 Wingerrsquos Grill amp Bar 17 Steak n Shake 18 Sonnyrsquos Real Pit Bar-B-Q 19 Sharirsquos Restaurants 20 Shoneyrsquos 21 Silver Diner 22 Johnnyrsquos New York Style Pizza 23 Jim lsquoN Nickrsquos Bar-B-Q 24 Country Kitchen 25 Country Market Restaurant amp Buffet The 26 Country Pride 27 Cracker Barrel Old Country Store 28 Cocorsquos Bakery Restaurant 29 Carrows Restaurants 30 Big Boy 31 Bill Miller Bar-B-Q 32 Black Bear Diner 33 Bob Evans 34 Dennyrsquos 35 Dickeyrsquos Barbecue Pit 36 Huddle House 37 IHOP 38 Iron Skillet 39 JBrsquos Restaurants 40 Friendlyrsquos 41 First Watch 42 Eatrsquon Park 43 Egg amp I Breakfast amp Lunch 44 Elmerrsquos 45 Bakers Square

AppEndix

restaurant chains included in this study (concluded)

Fine Dining Chains1 Ruthrsquos Chris Steak House 2 Royrsquos Restaurants 3 Shularsquos Steak House 4 Smith amp Wollensky 5 Texas de Brazil Churrascaria 6 SushiSamba 7 Palm Restaurant 8 Oceanaire Seafood Room 9 Flemingrsquos Prime Steakhouse amp Wine Bar 10 Del Friscorsquos Double Eagle Steak House 11 Fogo de Chatildeo 12 Melting Pot 13 Nobu 14 Mortonrsquos The Steakhouse 15 Capital Grille The

Cornell Hospitality Quarterlyhttpcqxsagepubcom

2011 ReportsVol11No6HotelGuestsrsquoReactionstoGuestRoomSustainabilityInitiativesbyAlexSusskindPhDandRohitVermaPhD

Vol11No5TheImpactofTerrorismandEconomicShocksonUSHotelsbyCathyAEnzRenaacutetaKosovaacuteandMarkLomannoVol11No4ImplementingHumanResourceInnovationsThreeSuccessStoriesfromtheServiceIndustrybyJustinSunandKateWalshPhD

Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 16: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

Cornell Hospitality Quarterlyhttpcqxsagepubcom

2011 ReportsVol11No6HotelGuestsrsquoReactionstoGuestRoomSustainabilityInitiativesbyAlexSusskindPhDandRohitVermaPhD

Vol11No5TheImpactofTerrorismandEconomicShocksonUSHotelsbyCathyAEnzRenaacutetaKosovaacuteandMarkLomannoVol11No4ImplementingHumanResourceInnovationsThreeSuccessStoriesfromtheServiceIndustrybyJustinSunandKateWalshPhD

Vol11No3Compendium2011

Vol11No2PositioningaPlaceDevelopingaCompellingDestinationBrandbyRobertJKwortnikPhDandEthanHawkesMBA

Vol11No1TheImpactofHealthInsuranceonEmployeeJobAnxietyWithdrawalBehaviorsandTaskPerformancebySeanWayPhDBillCarrollPhDAlexSusskindPhDandJoeCYLeng

2011 Hospitality ToolsVol2No1MegaTips2TwentyTestedTechniquesforIncreasingYourTipsbyMichaelLynn

2011 Proceedings

Vol3No3SocialMediaandtheHospitalityIndustryHoldingtheTigerbytheTailbyGlennWithiam

Vol3No2TheChallengeofHotelandRestaurantSustainabilityFindingProfitinldquoBeingGreenrdquobyGlennWithiam

Vol3No1CautiousOptimismCHRSExaminesHospitalityIndustryTrendsbyGlennWithiam

2010 ReportsVol10No18HowTravelersUseOnlineandSocialMediaChannelstoMakeHotel-choiceDecisionsbyLauraMcCarthyDebraStockandRohitVermaPhD

Vol10No17PublicorPrivateTheHospitalityInvestmentDecisionbyQingzhongMaPhDandAthenaWeiZhangPhD

Vol10No16BestPracticesinSearchEngineMarketingandOptimizationTheCaseoftheStJamesHotelbyGregBodenlosVictorBogertDanGordonCarterHearneandChrisKAndersonPhD

Vol10No15TheImpactofPrix Fixe MenuPriceFormatsonGuestsrsquoDealPerceptionbyShuoWangandMichaelLynnPhD

Vol10No14TheFutureofHotelRevenueManagementbySherylKimesPhD

Vol10No13MakingtheMostofPricelinersquosName-Your-Own-PriceChannelbyChrisAndersonPhDandShijieRadiumYan

Vol10No12CasesinInnovativePracticesinHospitalityandRelatedServicesSet4byCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No11WhorsquosNextAnAnalysisofLodgingIndustryAcquisitionsbyQingzhongMaPhDandPengLiuPhD

Vol10No10CasesinInnovativePracticesinHospitalityandRelatedServicesSet3CayugaSustainableHospitalityChicampBasicJetBlueAirlinesJumeirahEssexHouseTheRitz-CarltonHotelCompanyRuntrizTheSeaportHotelThayerLodgingTripTelevisionandXsenseExperientialDesignConsultingbyCathyAEnzPhDRohitVermaPhDKateWalshPhDSherylEKimesPhDandJudyASiguawDBA

Vol10No9BuildingCustomerLoyaltyTenPrinciplesforDesigninganEffectiveCustomerRewardProgrambyMichaelMcCallPhDClayVoorheesPhDandRogerCalantonePhD

Vol10No8DevelopingMeasuresforEnvironmentalSustainabilityinHotelsAnExploratoryStudybyJieJZhangNitinJoglekarPhDandRohitVermaPhD

Vol10No7SuccessfulTacticsforSurvivinganEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol10No6IntegratingSelf-serviceKiosksinaCustomer-serviceSystembyTsz-Wai(Iris)LuiPhDandGabrielePiccoliPhD

Vol10No5StrategicPricinginEuropeanHotels2006ndash2009byCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol10No4CasesinInnovativePracticesinHospitalityandRelatedServicesSet2BrewerkzComfortDelgroTaxiDinnerBrokercomIggyrsquosJumboSeafoodOpenTablecomPriceYourMealcomSakaeSushiShangri-LaSingaporeandStevensPassbySherylEKimesPhDCathyAEnzPhDJudyASiguawDBARohitVermaPhDandKateWalshPhD

Cornell Center for Hospitality Research

Indexwwwchrcornelledu

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 17: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

Vol10No3CustomerPreferencesforRestaurantBrandsCuisineandFoodCourtConfigurationsinShoppingCentersbyWayneJTaylorandRohitVermaPhD

Vol10No2HowHotelGuestsPerceivetheFairnessofDifferentialRoomPricingbyWayneJTaylorandSherylEKimesPhD

Vol10No1Compendium2010

2010 Industry PerspectivesNo6TheFutureofMeetingsTheCaseforFacetoFacebyChristineDuffyandMaryBethMcEuen

No5MakingCustomerSatisfactionPayConnectingSurveyDatatoFinancialOutcomesintheHotelIndustrybyGinaPingitorePhDDanSeldinPhDandArianneWalkerPhD

No4HospitalityBusinessModelsConfronttheFutureofMeetingsbyHowardLockandJamesMacaulay

2010 Roundtable RetrospectivesVol2No1SustainabilityRoundtable2009TheHotelIndustrySeekstheElusiveldquoGreenBulletrdquo

2010 ToolsToolNo10MeasuringthePerformanceofSearchEngineMarketingTwoToolsfortheHospitalityIndustrybyAnilAggarwalandBillCarrollPhD

TheWineCellarManagementToolmdash20byGaryMThompsonPhD

2009 ReportsVol9No18HospitalityManagersandCommunicationTechnologiesChallengesandSolutionsbyJudiBrownellPhDandAmyNewman

Vol9No17CasesinInnovativePracticesinHospitalityandRelatedServicesSet1AquabyGrandstandBrandKarmaCapellaHotelsampResortsEnTripHotelscomVisualiserLuggageClubRoyalPlazaonScottsTastingsTuneHotelsandVisitBritaincombyJudyASiguawDBACathyAEnzPhDSherylEKimesPhDRohitVermaPhDandKateWalshPhD

Vol9No16TheBillboardEffectOnlineTravelAgentImpactonNon-OTAReservationVolumebyChrisKAndersonPhD

Vol9No15OperationalHedgingandExchangeRateRiskACross-sectionalExaminationofCanadarsquosHotelIndustrybyCharlesChangPhDandLiyaMa

Vol9No14ProductTiersandADRClustersIntegratingTwoMethodsforDeterminingHotelCompetitiveSetsbyJin-YoungKimandLindaCaninaPhD

Vol9No13SafetyandSecurityinUSHotelsbyCathyAEnzPhD

Vol9No12HotelRevenueManagementinanEconomicDownturnResultsofanInternationalStudybySherylEKimesPhD

Vol9No11Wine-listCharacteristicsAssociatedwithGreaterWineSalesbySybilSYangandMichaelLynnPhD

Vol9No10CompetitiveHotelPricinginUncertainTimesbyCathyAEnzPhDLindaCaninaPhDandMarkLomanno

Vol9No9ManagingaWineCellarUsingaSpreadsheetbyGaryMThompsonPhD

Vol9No8EffectsofMenu-priceFormatsonRestaurantChecksbySybilSYangSherylEKimesPhDandMauroMSessarego

Vol9No7CustomerPreferencesforRestaurantTechnologyInnovationsbyMichaelJDixonSherylEKimesPhDandRohitVermaPhD

Vol9No6FosteringServiceExcellencethroughListeningWhatHospitalityManagersNeedtoKnowbyJudiBrownellPhD

Vol9No5HowRestaurantCustomersViewOnlineReservationsbySherylEKimesPhD

Vol9No4KeyIssuesofConcernintheHospitalityIndustryWhatWorriesManagersbyCathyAEnzPhD

Vol9No3Compendium2009

Vol9No2DonrsquotSitSoClosetoMeRestaurantTableCharacteristicsandGuestSatisfactionbyStephanieKARobsonandSherylEKimesPhD

Vol9No1TheJobCompatibilityIndexANewApproachtoDefiningtheHospitalityLaborMarketbyWilliamJCarrollPhDandMichaelCSturmanPhD

2009 Roundtable RetrospectivesNo3RestaurantsattheCrossroadsAStateByStateSummaryofKeyWage-and-HourProvisionsAffectingtheRestaurantIndustrybyCarolynDRichmondJDandDavidSherwynJDandMarthaLomannowithDarrenPBRumackandJasonEShapiro

No2RetaliationWhyanIncreaseinClaimsDoesNotMeantheSkyIsFallingbyDavidSherwynJDandGreggGilmanJD

2009 ToolsToolNo12MeasuringtheDiningExperienceTheCaseofVitaNovabyKeshPrasadandFredJDeMiccoPhD

2008 Roundtable ProceedingsNo1KeyElementsinServiceInnovationInsightsfortheHospitalityIndustrybyRohitVermaPhDwithChrisAndersonPhDMichaelDixonCathyEnzPhDGaryThompsonPhDandLianaVictorinoPhD

2008 ReportsVol8No20ServiceScriptingACustomerrsquosPerspectiveofQualityandPerformancebyLianaVictorinoPhDRohitVermaPhDandDonWardell

Vol8No19NontradedREITsConsiderationsforHotelInvestorsbyJohnBCorgelPhDandScottGibsonPhD

Vol8No18FortyHoursDoesnrsquotWorkforEveryoneDeterminingEmployeePreferencesforWorkHoursbyLindseyAZahnandMichaelCSturmanPhD

Vol8No17TheImportanceofBehavioralIntegrityinaMulticulturalWorkplacebyTonySimonsPhDRayFriedmanPhDLeighAnneLiuPhDandJudiMcLeanParksPhD

The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

Professionals from around the world are invited to attend 3-day 10-day or online courses at the worldrsquos leading institute for hospitality management education in

Visit our website to apply

Explore develop and apply ideas with global hospitality leaders and

expert Cornell professors

Success

AdvancingBusiness

andPersonal

bull Strategic Leadershipbull Financebull Foodservicebull Human Resources

bull Marketingbull Operationsbull Real Estate

wwwchrcornell edu

Page 18: Online, Mobile, and Text Food Ordering in the U.S ...dealer.rmpos.com/downloads/jerry/Cornell_OO_Study.pdf · Online, Mobile, and Text Food Ordering ... • International Hotel Conference

wwwchrcornell edu