Foodservice: Cornell Study Finds Quick-Service and Fast-Casual Chains Gradually Making Use of Electronic Ordering

An analysis of the electronic ordering practices of the top 326 U.S.-based restaurant chains finds that fast-casual and quick-service restaurant (QSR) chains have moved forward with online ordering, although not on Facebook. The study, "Online, Mobile, and Text Ordering in the U.S. Restaurant Industry," by Sheryl E. Kimes and Philpp F. Laqué, is available at no charge from the Cornell Center for Hospitality Research (CHR) at
http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2011.html. Based on their review of restaurants' ordering functionality, just under half of the fast-casual restaurants accepted online ordering-notably, pizza and sandwich chains-and just over one-fifth of QSR chains take online orders. Kimes is the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration, where Laqué is a degree candidate in the Master of Management in Hospitality program. The study was sponsored by CHR and Nation's Restaurant News.

"Looking at mobile apps and texting, we found a somewhat mixed picture," said Kimes. "We found that the QSRs and fast-casual chains are relatively strong in mobile apps, but only about one-third actually took orders through mobile devices. Overall, just 16 percent of the restaurant chains we studied have a mobile app. We believe that this represents a great opportunity for the industry."

Laqué pointed to Facebook as another opportunity. "Although almost every chain is on Facebook, we found only about 3 percent allowed ordering through Facebook," he said. "On the other hand, electronic ordering is not for every chain. We found virtually no online ordering possibility for fine-dining restaurants."

In the report, Kimes and Laqué outline the advantages and challenges of electronic ordering. Advantages include the potential for increased sales, particularly through automatic upselling, while disadvantages include the possibility of overwhelming the kitchen with extra rush-time orders. Beyond those considerations, they note the heavy preference toward electronic ordering on the part of younger restaurant customers. The future likelihood is that customers will simply expect that they can place orders online or by text or mobile app.

A subsequent report in this series will present the results of a survey of U.S. consumers' attitudes toward and use of electronic ordering, and a third report will focus specifically on the experience of U.S. fast-casual and quick-service restaurants with electronic ordering.

Thanks to the support of the CHR partners listed below, all publications posted on the center's website are available free of charge, at www.chr.cornell.edu.