The explosion of digital ordering for food in the last year has been highly profitable—for third-party delivery apps. For restaurant chains, the story’s been a little different.
The big apps take such massive commissions, restaurants are racing to find the next big trend in consumer ordering behavior that isn’t a costly pay-to-play scheme. And that trend is arriving now: text ordering.
We conducted research to understand how text ordering means more orders per customer, increased customer loyalty, higher revenue growth, and fewer dropped orders.
We’re thrilled to share our conclusions, including:
- Just why text ordering was so bad just a couple of years ago
- How advances in AI have completely changed the game
- 5 key stats that show how AI will transform the restaurant industry
To celebrate the huge advances in text ordering technology, we’re announcing OrderAI Text, our AI-powered text ordering system.
By the time you’ve finished this piece, it’ll be crystal clear which way the winds of change are blowing (Hint: direct customer relationships, greater profitability, and stronger businesses). Let’s get right into it.
Yes, Text Ordering Used to Just Be Terrible Chatbots
We all remember the chatbot hype era. For a short while, it seemed chatbots were going to take over the world. The only problem? They provided truly awful experiences for both customers and restaurant operators.
- Legacy text ordering chatbots were sales-challenged. They didn’t have the ability to suggest food pairings, modifiers, or upsells. Customers were often stuck using a simplified version of the menu, unable to customize orders at all.
- Legacy systems weren’t exactly smart. They were chock-full of limitations, and generally provided a poor return on ROI. It could be tricky to integrate them in your point of sale system across multi-chain restaurant units.
- Setting up text ordering was very labor-intensive. Old systems worked on an “if this, then that” basis, meaning employees had to spend hours updating the menu and data. Even the most well-designed systems were made inaccurate on a regular basis as menus changed, items went out of stock, and regional promotions went live. It was simply too much work to be worth it.
The old way of text ordering left a sour taste in a lot of customers’ mouths. The chatbot-style systems couldn’t compete with hyper-convenient third-party delivery apps, like UberEats or DoorDash.
Research shows customers actually really want to order directly from restaurants. And they will—if you can out-convenient the big marketplaces. Buckle up, because AI text ordering is about to change the game.
How AI is Revolutionizing Text Ordering for Both Customers and Restaurants
The next generation of AI ordering systems is here—and they’re smart. They’re capable of so much more than we could have imagined just a couple of years ago.
Not only do they make app-free ordering a painless experience, but they also dig deep into data. They can identify macro-trends, customer order preferences, and all manner of cool details. And you can use this data to send targeted ads and offers to customers.
Here’s a few stand out features from the latest in AI text ordering:
- They can actually learn via Natural Language Processing (NLP). That means, over time, the AI is exposed to how people from different regions or backgrounds communicate. Misspelled words, regional slang, funny word ordering—the AI can understand it all for unrivaled order accuracy and speed.
- It’s as easy as texting a friend. Customers just text their order and provide their address. Once they confirm everything is correct, they can click a link to pay, or just pay at the door. Plus the system will save their payment info and address for next time, and everything integrates automatically into the customer’s connected loyalty account. No apps, no phone calls, just quick orders.
- And it’s the easiest option if you want to reclaim your profits from 3rd party delivery apps. The big apps take 15-30% of your total order value. Text ordering is operated by your restaurant—there are no shocking fees—and is more convenient for customers to use.
And this is only the start! Integrated inventory, upsells, SMS marketing—the benefits of AI-powered text ordering stack high.
The Data Shows Customers are Ready for Text Ordering
This May, we commissioned a report on AI text ordering to see how restaurants using HungerRush performed with the new technology. The results are in, and they reveal what we had a hunch was true: text ordering, now powered by artificial intelligence, is poised to become a widely-used ordering method.
Before we dive into the data, let’s first explore why now.
Digital food ordering has skyrocketed during the pandemic. There’s been a 44% rise in online spending, and a 12.2% growth in online restaurant ordering is predicted for 2022. With these changes in customer behavior, stores need to provide a simple and pleasing ordering experience to capture a share of the growing pie.
The only challenge is getting people comfortable with new systems like text ordering.
It’s like ATMs. Years ago, people were used to face-to-face chats with a teller when it came to paying their bills or withdrawing money. But now? Most people see the value and convenience of using an ATM.
It’ll take time—likely three orders, according to our data—to get customers to form the habit of text ordering. Savvy restaurant owners should consider advertising and promoting text ordering to ensure it takes off.
Papa John’s has done this to great effect by offering exclusive coupons to those who text DEALS to their number. Plus there’s the added benefit of getting your customers to opt-in to receive promotional messages via text. And with the average user on their phones for four hours a day, it’s a great way to connect with customers and build up brand loyalty.
According to Mordor AI, AI in the food market has a predicted CAGR rate of 45.77%, with North America being the largest market. If you’re considering making the switch, request a consultation and one of our experts will be there to smooth the process along.
The Data: AI-Powered Text Ordering is Highly Profitable
Artificial Intelligence is about to change the world of text ordering as we know it. But it’s not just about a smoother customer experience. It also affects your bottom line. Here are five stats from our customer research that demonstrate how:
- AI ordering generates more orders per customer. Our data shows a 14% rise in the average number of monthly orders per customer when they used a smart AI ordering system. Plus there was a 2% rise in customers placing 3 or more orders per month!
- Higher-revenue growth. Restaurants using OrderAI Text witnessed an 11% increase in revenue and a 10% increase in order value when compared with other ordering channels (phone, internet, and third-party apps).
- Customers who text companies, stick with companies. Texting helps foster a sense of brand loyalty and connectedness. That’s something people value more during these pandemic times. Our data showed customer acquisition across the board grew from 32,000 users in Jan 2020 to 456,000 in May 2021.
- Rapid customer adoption vs third-party apps. We were pleasantly surprised to find that OrderAI Text orders quickly overtook orders from most third-party platforms (Postmates, Grubhub, UberEats), coming in second only to DoorDash. Thirty percent of customers quickly realized they prefer texting over using a delivery app.
- No more dropped orders compared to phone ordering. Busy phone lines lead to customers dropping out and going somewhere else. Since AI-powered text ordering is infinitely scalable, it means there is zero wait time to place an order. We analyzed one million orders between June 2019 and February 2021 and found that only 5% of orders that were initiated ended up being dropped.
All this data points in one direction.
AI is the future of text ordering—and that future is profitable.
How to Get Started with OrderAI Text Today
Smart restaurant operators know that, to take back control of the customer journey and profitability, creating better and better experiences for customers is a non-negotiable—and leveraging artificial intelligence changes the game.
That’s why we created OrderAI Text, our new text ordering solution, designed to provide a seamless customer experience and increase revenue on digital orders. It integrates with all our existing multi-functional platform services which ensures a smooth multi-unit enterprise operation.
If you’re looking for your next great leap in customer engagement and profitability, AI-powered text ordering will get you there.
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