Technology and Business Processes of Ordering a Restaurant Takeaway Online

Introduction

During the first week of the E-Distribution module it was clear as to what the subject would cover. Channels of distribution was explained as:

“….the process of making a product or service available for the use of consumption by the consumer”
(Kotler, 1999:8)

It was further understood that Electronic distribution is an emerging model of new selling and merchandising, in which buyers are able to participate in all phases of a purchase decision, while stepping through those processes electronically rather than in a physical store or by phone (IEC, 2006). At this point, the author was aware of exactly what the module was about and looked forward to learning more about E-Distribution in the tourism and hospitality industry.

As part of assessment 1, it was explained that a scenario analysis through an online discussion board was to be completed. Through the medium of Blackboard, a statement for discussion had to be presented, thus generating and managing an online discussion topic. As a result of the discussion board, assessment two required the findings from the discussion board to be summarised in a case-study, as shall now be analysed.

Topic choice and research

The title which was ‘Technology and Business Processes of ordering a restaurant takeaway online’ was chosen as the author was keen to understand how restaurants can sell their takeaways online and the procedure and technology involved in setting up such a system. The author’s background in a family restaurant business further influenced the topic choice, and from the discussion board the author hoped to generate valuable and interesting discussion which could aid in setting up such a system in the family business itself.

Finding research for such a topic at times proved difficult, however various sources from the Internet had valuable information regarding online takeaways and their popularity along with the procedures and technologies used. Books on E-Distribution were also used, particularly when researching definitions. Journal sources, such as Mintel were also helpful and assisted in clearly showing trends which existed within the hospitality industry.

Analysis: The discussion board and defining the title

The topic chosen for an online discussion board proved to be an extremely popular one and generated immense discussion. The discussion board generated a total of seventy seven messages and various threads discussed a number of subjects related to online takeaway ordering. Certain threads were more valuable than others as they were relevantly backed up with evidence and thus were more reliable than some of the other threads which were opinions/views as opposed to researched information.

It is considered important by the author to define exactly what is meant by the title and the way in which the word technology is referred to. Technology is defined in different ways by various authors. Wikepedia (2006:1) refers to technology as

“the material entities created by the application of mental and physical effort to nature in order to achieve some value…technology is the current state of our knowledge of how to combine resources to produce desired products, to solve problems….technology includes technical methods, for example computer technology….”.

One way to understand the online takeaway ordering technology is to compare it to a hotel central reservation system. By dialing a central telephone number a customer can make a room reservation within minutes at any location affiliated with the reservation network. Using the same principle, ordering a takeaway online can expediate preparation and distribution of a customer’s order (Pappas, 1997).

The second part of the title, the business processes, refers to the way in which a restaurant may have to adapt when using such a technology and what procedures have to be in place. The business processes were broken down at the start of the discussion board as:

Tasks and outcomes associated with an online takeaway service
The resources and actions according to the business needs
In-puts and out-puts and decision making
The step by step process of how such a service works
The advantages and disadvantages of such a system

After these points were put across, the discussion was able to fully commence and a great deal of ‘talk’ from this point onwards was generated.

Analysis: The Popularity of Online takeaway ordering

The discussion board evidenced that electronic distribution is rapidly developing and each year more people are logging on to the internet with young and wealthy consumers in particular being keen advocates (O’Connor, 2003). The internet offers companies an alternative distribution channel as well as the opportunity to build a comprehensive database that can be utilized to develop precise targeted marketing initiatives (Mintel, 2004). O’Connor (2003) believes that using the Internet, removes physical barriers that separate the buyers and sellers, thus changing the way in which products are distributed and simply cutting out the ‘middleman’.

It was found that within the hospitality industry, the concept of online takeaway ordering is gaining popularity (Franey, 2006), however it was researched that in comparison to the USA and parts of Europe, UK consumers are lagging behind when using such a technology (Franey, 2006). Therefore as a result, very few restaurants in the UK offer online takeaways (BBC, 2000). However Franey (2006) puts across that home delivery systems have ‘exploded’ since foodservice operators recognised the limitations of in-store dining and discovered the growth potential in off-premise services.

Findings suggested that the use of technology in UK’s Hospitality Industry is expected to increase, due to the reason society is becoming more technologically reliant. Franey (2006:8) highlights:

”…from banking to supermarket shopping, through booking holidays and finding a job, few aspects of life are unaffected by the web”

This can be backed up by a piece of research which showed that in countries where online ordering is more prevalent, consumers proffered to use the Internet to order, as opposed to the telephone (Gervasio, 2006).

Analysis: The technology and business processes involved

The concept sounds very simple but the technology behind it is complex (Franey, 2006). Just-eat are service providers for online takeaways and the way in which the process works is as follows. Firstly they install a box (Just-connect box) in the restaurant and then when the consumer makes an order to the individual restaurant on the Just-eat website, it will instantly send a signal to the box via GPRS and the restaurant will then either say yes/no or change the delivery or takeaway time within 90 seconds. The consumer then receives a message on screen and a receipt confirming delivery (Just-eat, 2006). Thus it can be said that the technology in this instance is quite patent pending.

The Online Waiter is another example of an ordering service. The process when using this operator is that the restaurants enters their menu on the online waiter website, the customer can browse the menu through their website and order food from their preferred restaurant in this way (Onlinewaiter, 2006), thus the process is similar to Just-eat apart from the fact, just-eat install a box and Onlinewaiter do not.

Another service provider is Takeawayonline.net, who provide all the hardware and software and support services necessary to run a real-time Internet based system. The service can be used as a ‘stand alone’ system or integrated into the existing website if the restaurant has one. In terms of the process, there are four stages, through which the customer and supplier can keep in contact throughout the purchasing process. The system can also deal with delivery charges and VAT as applicable (See appendix 1 for the four stage process and sequence) (Takeawayonline.net, 2006).Therefore it can be seen that to place an order, the customer will simply visit the webpage and the process from here on is quite a simple one to follow.

Another service provider is RestaurantWeb, who offer restaurants a 30 day free trial, during which the restaurant can experiment the service. If the restaurant does decide to stay with the service, the cost is approximately £29.95 per month. There are no set-up fees or any transaction or per order fees, no contract is required and the service can be cancelled at any time (RestaurantWeb, 2005). The customer opens up the RestaurantWeb website, clicks on the appropriate restaurant, browses the menu, selects the items, fills in some basic details (name, address, credit card details, (only once as the computer will save the customers details once they have used the service) and places the order to collect or to be delivered. An automatic message is sent to the restaurant via email with the full order, contact details and credit card details, the payment is authorized, the order is printed and then sent to the kitchen and delivered or collected by the customers when ready (RestaurantWeb, 2005). From this aspect it appears as though the process yet again is easy to follow for a customer and easy to set-up for a restaurant.

Currently the largest users of home-delivery software are pizza operations (Franey, 2006), and Dominos Pizza is an appropriate example. Dominos was one of the first restaurants to use an online service and for them it has proved to be successful and increased profit drastically. The Dominos Pizza website (www.dominos.co.uk) is an example of an online takeaway service which does exactly what it says efficiently. Customers enter their postcode, fills in details (address and phone number). They then select their choice of pizza and confirm their order (payment on delivery or online) and then wait for their order to be delivered (onlinetakeaway.net, 2006), this shows yet again the process looks to be simplistic.

Analysis: The advantages of such a system:

Surveys have shown that customers find online ordering easy and convenient (Martin, 2004). It is especially popular amongst busy professionals who can place an order at work and then pick it up on the way home or have it delivered to the office (Franey, 2006). Evidence suggests that once customers try the service, they ‘bookmark’ the restaurant takeout webpage in their browser and use it to order again. Research also suggests that Internet takeout ordering is a positive way in which to increase the business restaurants can get from existing customers and thus a way in which to stay ahead of competition (RestaurantWeb, 2005).
Clark (2006) in the discussion board points out that:
“…the amount of times I have used the phone to order a takeaway and the person on the other end does not understand what I want is so frustrating”
Thus in this way, online takeaway ordering allows the customer to order the exact dish. The author in the discussion board, evidences that using an online system for takeaways, enables customers to be specific, e.g. chicken tikka masala (mild), naan bread (no butter), therefore in this way there are no errors in the order. Another advantages of ordering an online takeaway from the restaurateurs point of view, is that while a person might forget to ask the customer for his/her phone number when using the phone, the computer/system will not (Gervasio, 2006).
From the customer perspective, the menu is online immediately and there are a list of prices, opening hours and delivery charges all on one page, which is convenient for the customer (onlinetakeaways.net, 2006). For the restaurants convenience, service providers such as onlinetakeaway.net give restaurants the option of branding the website to the business (own name and logo). The domain name is registered and the restaurant can start using the online takeaway system within three days. For customers onlinetakeawy.net offers a loyalty programme option and incentive scheme, which further influences customer to order online. The restaurant is also able to keep a database of all it’s customers via takeawayonline.net and in this way can promote special deals/offers (onlinetakeaway, 2006).

Most of the service providers for online takeaways are easy to use for both the customer and the company itself (Mintel, 2004). Mealagent for example, allows customers to find restaurants which are local to them and also remembers what people have ordered in the past, which makes it easier for the them to re-order ‘the usual’ with the click of a button (Gervasio, 2006). Gervasio (2006) also signifies that Mealagent assists in taking the guesswork out of ordering as there are no scribbled orders or handwritten faxes. It allows restaurants to concentrate on selling and put less time into the ordering process, hence making the process quick and easy.
BBC (2000) points out that when customers order something online, they often have this uncertainty because they are not there to physically buy the product or service. A takeaway online service provide, EatOnline have taken this into account and as a result they ensure that everyone using restaurants on their website, gets a phone call or email confirming their choice. Therefore in this way, the customer is satisfied, while the restaurant is also assured that the order is genuine and not a bogus one.

Analysis: The issues associated with online takeaways

In the discussion board, one of the issues which came up frequently was whether smaller restaurants would be able to afford to put an online takeaway service in place. O’Connor (2003) highlights that the issue of cost cannot be ignored and that smaller operations are less likely on several fronts to be able to afford to using electronic distribution channels. In the discussion board, Kong (2006) states:

“I think online take away is good idea, however it depends on the size of the company. If it is big company is very easy to do, such as Pizza Hut, they have their own website, they can easily develop the online take away services, but just think about it, will a small take away shop consider to doing it”

Therefore as can be seen, online takeaways have an image of benefiting larger scale restaurants. The large Pizza chain Dominos makes the process look simple, however the process for an Sme may be more complex, as it would have to market itself right from scratch as well as consider the costs involved in (Mintel, 2004). Tagged (2006) however points out that even an Sme can set up takeaways online fairly easily and cheaply. In the discussion board, Kong (2006) further researches that a small family run restaurant in Acton, called North China (www.northchina.co.uk) offers an online takeaway service, and in this way it can be seen that SME’s do use such services. North China Restaurant run an online service through their website and the process for the customers looks to be quite an easy one (see Appendix 2).

Although it can be put across that ‘well known’ restaurant chains would probably benefit more from online takeaways, smaller restaurants could also benefit and use such a service to attract niche market segment or the regular clientele (O,Connor, 2003). RestaurantWeb (2005) highlights that it costs a restaurant as little as £29 a month for such a service and signifies that £29 is not a huge amount in terms of the revenue that could be generated from the service, for example one takeaway order of £30 would pay the whole months cost, thus from this aspect, it looks affordable.

Another issue associated with online takeaways is bogus orders. Restaurant.Web (2005) believes that the common protection against this, is to take a phone number with the order, or if the order seems out of the ordinary, phone back and check or simply take the credit card payment before hand. Some takeaway ordering websites, offer restaurants a validation check on the phone number and address to avoid bogus orders. However the downside to this is that Internet payments cost a fair amount to set up because a merchant account is needed, in this way the process can be complicated and this needs to be considered before a restaurants sets up such a service.

The other issue which came up in the discussion board was the complexity of the process in regard to how restaurants handle the service. Qutubuddin (2006) in the conversation argued:

“…but my point is the number of processes involved…the complexity is not using the computer….I am talking about one person sitting there constantly as you remember this is a restaurant….you cant delay orders, printers and so on….”

Therefore in this way, it can be seen that a problem may exist in the way that a member of staff has to concentrate on handling the online takeaway service at all times. For example when a takeaway comes in, it should be printed and processed straightaway, there should be no delay and to ensure this, someone needs to be close to the computer all the time (Franey, 2006).

Questionnaire Analysis:

North China Restaurant and Brilliant Restaurant

For the case study it was considered important to carry out a questionnaire on two restaurant managers. One from a restaurant that uses the online takeaway service (in this case North China Restaurant in Acton) and one restaurant which is considering putting a takeaway online service in place (in this case Brilliant Restaurant in Southall). Two short questionnaires were conducted with the restaurant managers (See Appendix 3 and 4). From the findings it can be said that the manager at the North China restaurant felt an online system had not benefited him and even though it had been in place for a few months, it only brings in about seven takeaways per week (one a day). The manager said it was not worth all the effort and most of his customers still preferred to order over the telephone. This can be compared to what the manager at Brilliant restaurant felt, he said that by putting such a system in place, he expected to increase revenue and at least get ten takeaways per day. However looking at the North China restaurant example, this expectancy seems far too high.

In terms of the process, the manager at North China highlighted that the takeaway service is offered through the website to saves costs, however he said that if he went through a service provider such as Restaurant.Web, this could be a better option as more customers would know of the service and the restaurant could be marketed more thoroughly. When the manager at Brilliant was asked of the processes involved, it was found that according to him it was quite straightforward, however looking at the research there are different aspects and technologies which need to be considered.

Therefore from the questionnaire analysis, two views can be seen. The manager at North China feels online takeaways have not brought many advantages, whereas the manager at Brilliant says he expects to gain a lot from the service and the increase in revenue it could bring. Thus, it appears as though the online takeaway service has its negative impacts as well, especially if customers do not know it exists. Therefore if Brilliant Restaurant were to consider starting up such a service, it would be advised that they carry out some research on how it would be marketed and whether customers demand the service first.

An evaluation of the technology and business processes of ordering an

online takeaway

It can be evaluated, that although ordering an online takeaways looks to be a trend which will become more popular in the future, the technology and processes involved with such a system need to be considered carefully before a restaurants puts such a service into place. It can be said, that for a newer restaurant starting up, putting such a service in place may be complicated to start with, however the way in which the restaurant handles the service and if it is able to adapt to it, then such a service could be beneficial. The basic process for a restaurant to set up an online service is more clearly summed up in appendix 6.

Critical Conclusion

To conclude, looking at the evidence, it can be said that there are various processes involved in setting up a takeaway online, and the technology behind such a service at times can be quite intense (e.g. just-eat box). On the whole however, online takeaways are used by a small proportion of the population, however as yet, telephone ordering is the preference.

The discussion board showed that there are many operators/service providers who offer restaurants an online takeaway service and the case study has clearly shown examples of each and the ways in which the process and technology involved differ from company to company. Thus it can be summarised that the process varies according to the service provider and the needs of the actual restaurant.

Throughout the module, the author has gained vast knowledge about E-distribution and is now able to, critically discuss the core concepts which underpin E-distribution, implement E-distribution strategies. The author is now confident to, synthesise, compare and evaluate technological solutions in the provision of an E-distribution strategies and, engage in critical debate of opportunities and constraints created by the development of E-distribution strategies within a predefined scenarios (in this case the technology and business processes of ordering a takeaway online).