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Rediff.com  » Business » For fast-food chains, revenues are a click away

For fast-food chains, revenues are a click away

February 26, 2014 09:15 IST

For fast-food chains, revenues are a click away

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Devina Joshi in Mumbai

When is it a good time to have a pizza?

Any time, as long as it is hot.

And, when it costs 50 per cent less than usual, the sauce-laden slices could taste better. That is the sentiment American pizza chain, Domino’s, wished to capitalise on with its offer last week.

However, the waiver of half the price was applicable only when the customer ordered her pizza online or through its mobile site/app (and between 11 am and 5 pm).

Domino’s is not the only one pushing for volumes in Internet or mobile orders.

McDonald’s has recently rolled out its online and mobile ordering mechanism after a tie-up with DirecPay.

It allows customers to not just order but also pay online or through McDonald’s mobile app.

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Image: An artfully poured latte rests on the counter at Starbucks's Roy Street Coffee and Tea in Seattle, Washington.
Photographs: Marcus Donner/Reuters

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For fast-food chains, revenues are a click away

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“We are working with McDonald’s to have tablets work as self-service kiosks within the store as well, allowing customers to process and pay for their orders.

“This is to cater to an increasingly tech-savvy audience with no time for lengthy queues,” says Rahul Chiddarwar, vice-president and head, DirecPay.

Home deliveries for quick service restaurants are picking up as QSRs open more outlets near residential areas.

But dialling to order could soon fall out of favour with chains pushing for do-it-yourself ordering using the Internet.

The food market in India is vastly fragmented, with organised food constituting only 5 per cent of the pie.

Multinational food chains may have been slow to customise their menu for India, but they have been quick to cotton on to the upswing in the use of the Internet, especially through mobile phones.

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Image: Customers at a McDonald's restaurant.
Photographs: Denis Sinyakov/Reuters

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Domino’s had launched its online ordering three years ago, followed by a mobile app and a toned-down mobile site. Its mobile app has been downloaded 1.5 million times, and it brings in 20 per cent of Domino’s online revenues.

“In the last three years, we have seen 20 per cent of our overall home deliveries happening through the online medium,” says Harneet Singh Rajpal, vice-president, marketing, Domino’s Pizza.

The ‘30 minutes or free’ promise holds true for online orders, too.

Domino’s took around a year to get its backend in place, synchronising its 650-plus stores in India with the online platform to maintain the store’s business hours of 11 am to 11 pm.

The half-an-hour-delivery promise is taken off the table during promotions.

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Image: A Domino's Pizza restaurant in a shopping mall.
Photographs: David Gray/Reuters

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For fast-food chains, revenues are a click away

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Pizza Hut and KFC, both owned by US-based Yum! Brands, have online and mobile presence as well. According to these international players, the move is in line with a shift in consumer preference for online ordering in other important markets like Japan, South Korea and Australia.

It is not just the American giants who are in the game. Faaso’s, an Indian wraps and meals chain, has gone a step further: It not only has an online plus mobile ordering system (‘Order Online, Scr*w the Queue’ says its website), it even allows orders to be placed on Twitter using the hashtag, #faasosnow.

The food outlet is prompt with redressals on social media.

Large food retailers are also turning to third-party websites like foodpanda.in (the Indian version of foodpanda.com) or tastykhana.in, which facilitate online ordering and payment.

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Image: A Pizza Hut restaurant in Burbank, California.
Photographs: Fred Prouser/Reuters

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Clearly, such sites could also help local restaurants without the bandwidth to launch their own online presence, giving the Indian organised food market a boost.

It can also be of use to MNCs without an online ordering system just yet, like Subway, which is present on some of these websites.

Several reasons are making food chains push online as the medium for order-taking.

For the customer, there is greater control over what to order, from a plethora of options.

It also eliminates errors in communication and makes the bill amount instantly visible.

For the repeat user, it allows for saved order and payment mode histories and pre-charged e-wallets, wherever available.

Though, cash-on-delivery remains the mode of pay for 60 per cent of online orders as users are wary of card frauds.

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Image: People dine at a KFC outlet.
Photographs: Aly Song/Reuters
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Chiddarwar explains what is in it for the retailers: “It is cheaper to service customers online than in-store, due to reduced overhead costs”.

Experts point out chains could also cut down on call-centre staff needed to man calls as their websites and apps can facilitate order placements.

Chiddarwar also reminds that “where the payment is already made, the acceptance of an order made online is higher, and a retailer’s minor errors tend to be forgiven.”

But brands try and reduce errors as well.

In case of non-availability of food items, say, a topping for a pizza, the nearest store would call back for a change in order, offer complimentary vouchers or cash-backs, says Rajpal of Domino’s.

The concept of online ordering is still a Tier-1-town phenomenon.

The QSRs would now have to take this to smaller towns with the growing popularity of smartphones.


Photographs: Eric Gaillard/Reuters
Tags: Rajpal

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