When the technology emerged, mobile ordering was thought to be a natural for the restaurant industry, and now there’s some research showing just how popular these apps have become. It turns out that, from 2013 through 2017, digital orders at restaurants grew at an average annual rate of 23%, and will triple by the end of 2020. Of these orders, some 60% now originate from mobile devices, according to research released Monday by The NPD Group, a Port Washington, N.Y.-based market-research firm.
For all the marketing done by branded third-party app providers like DoorDash, Grubhub/Seamless, and UberEATs, restaurateurs’ proprietary apps and Web sites account for 70% of all digital orders, the research indicates. Proprietary apps include highly popular ones like those from Starbucks Corp. and Panera Bread Co.
Discounts and other loyalty deals help explain the greater popularity of proprietary programs for restaurants, along with a desire among users to customize and streamline orders, NPD says.
Despite this lopsided result, third-party apps account for 40%, or “more than their fair share,” of the top 20 apps ranked by usage, whether third party or restaurant-branded, indicates the report, entitled “Delivering Digital Convenience.” The reasons consumers give for using third-party systems include functions like looking up items, paying for meals, and checking prices, NPD says. As might be expected, here, too, deals help boost usage.
“Digital orders will remain an outsized source of growth for the restaurant industry over the next few years, and operators who desire to grow need to embrace a digital strategy,” says David Portalatin, food-industry advisor at NPD, in a statement. “There are clear leaders in the digital-ordering space—brands and third-party providers who have achieved critical mass the fastest.”
Among NPD’s recommendations to new restaurants looking to launch mobile ordering apps: make loyalty programs and faster delivery a high priority.