A Blog by Jonathan Low


Oct 5, 2021

How Online Ordering Is Ruining Lunch For Everyone Else

Having been forced to adapt delivery during the pandemic, restaurants, especially big chains, have now created a more efficient and profitable model which they are now pushing customers into, by making the traditional wait and order model too time consuming and frustrating. JL

Henry Grabar reports in Slate:

The road to lunch is splitting into two lanes, and one of them is moving faster than the other. At Shake Shack, for example, digital sales now represent 47% of all orders. More than half the people behind the counter prepare lunch for a shadow line of customers: the preorderers. Customers all seemed to have the same realization at once: We should have ordered ahead. At Chipotle, “digital orders” grew 133% and accounted for more than half of all sales. Big chains are adopting the “ghost kitchen” model to master the delivery market, in which a handful of “restaurants” may deliver food out of one industrial kitchen

Last week, I stepped into the fast-casual chain Cava, an old office-lunch haunt, and was pleased to see a dozen people waiting in line in front of me. “New York is back!” I thought, sizing up the crowd and scanning the once-familiar menu of grilled meats and fixings like lentils, feta, and harissa.

But the line didn’t move like it used to, and not because this restaurant was noticeably plagued by the staffing shortages we’ve heard so much about. Instead, more than half the people behind the counter were preparing lunch for a shadow line of customers I saw filtering in and out on the other side of the cash register: the preorderers. They were skipping the line and eating up my lunch hour. The customers standing where I was all seemed to have the same realization at once: We should have ordered ahead.

The road to lunch is splitting into two lanes, and one of them is moving faster than the other. At Shake Shack, for example, digital sales now represent 47 percent of all orders. On a recent visit, I had the choice between waiting in line or scanning a giant QR code at the entrance to order online. The location I visited had eliminated its cashiers, so you’d be ordering on a computer in any case; the question was merely whether it was Shake Shack’s computer or the one in your pocket. I wasn’t about to make the same mistake twice: I punched my order into the app, from inside the store. Doing it 10 minutes earlier would have been even better.

Ordering on the phone is even more popular at Chipotle. In the first quarter of this year, “digital orders” grew 133 percent over the prior three months and accounted for more than half of all sales at the chain. In the spring, even as COVID restrictions eased, the number of digital sales grew another 10.5 percent to nearly a billion dollars in digital burritos. That’s almost three times as many digital sales as the company did in the first quarter of 2020, before the pandemic.

Half the restaurant’s digital orders come from “order-ahead transactions.” Most of those are placed less than 20 minutes in advance, Chipotle vice president of digital strategy and product Nicole West told me. Nearly all restaurants now have a second, hidden assembly line for digital orders, and Chipotle recently opened its first store, in Highland Falls, New York, that does not accept orders in person at all.

In short, big chains are quickly adopting elements of the “ghost kitchen” model developed by entrepreneurs trying to master (or game) the delivery market, in which a handful of “restaurants” may deliver food out of one industrial kitchen, and only interact with customers when they hand over the chow. For landed chains like Chipotle, this remodeling adds up to a faster process inside the restaurant, by cutting out the friction of deliberating customers and cash transactions. Many observers have anticipated the installation of screens to replace minimum-wage front-of-house staff. Turns out we had the screens in our pockets all along.

For years, big chains like Chipotle, Starbucks, and Panera Bread have tried to get customers to order from their phones before they get to the store, a trend that meshes nicely (for restaurants and customers) with the rise of delivery services like Uber Eats, Seamless, and DoorDash. But it’s been slow going: In the early days of the pandemic, I interviewed a startup founder in Chicago as we waited 45 minutes for his pickup burrito bowl. Starbucks was one of the first companies to prompt customers to order from their phones, back in 2015; its mobile order rate had been inching up just 1 percentage point each quarter.

But quickly, the pandemic changed the calculus, forcing restaurants to up their game and prompting customers to get familiar with ordering food from their phones. In June 2020, I went to a Starbucks in Manhattan that would not even take orders that weren’t made online. The company’s online order rate leapt from 16 to 24 percent between 2019 and 2020. The startup Toast Tab, which helps restaurants gain online ordering independence from GrubHub, Seamless, and other delivery apps that take a big cut, reported that its share of sales at restaurants that use the service rose from 15 percent pre-COVID to 70 percent in August 2020.

Not every lunch joint appreciates the new normal. At Xi’an Famous Foods in New York City, CEO Jason Wang told me he’s phasing out the remote option, which creates more demand than his cooks can handle except at the slowest hours of the day and accounts for less than 5 percent of revenue. But then Wang’s stern, printed admonishments to eat his hand-ripped noodles the minute they come out of the kitchen have never invited ordering ahead.

“During the pandemic, it was a necessity,” Wang says. “But we never did deliveries before. I don’t want people coming into our stores feeling like, ‘We’re lining up and they’re getting their food before me.’ I don’t want my staff focused on, ‘This is going here, this is going there.’ I feel like some of these other restaurants, their quality must suffer from this. But the shareholders are always looking for ways to increase revenue.

Yes, indeed. Forced to retool their systems for the wave of delivery orders during the first six months of the pandemic, businesses have made online ordering for pickup a very smooth process.

In fact, it’s a smoother and superior process to waiting in line in the store. I’m sorry to say that’s the case at New York’s famous smoked fish emporium Russ & Daughters, where you can wait in a slow-moving line on the sidewalk for your turn to enter the capacity-restricted store. Or you can order online in the morning and, in a minute, pick up a bag of smoked fish a couple hours later. Back in the day, when the appetizing destination was more crowded than a rush-hour subway car, jumping the line was a privilege reserved by the owners for those buying caviar.

The take-a-ticket system at Russ & Daughters was imperfect, but I did enjoy the freebee slice of lox you were handed on wax paper to pop in your mouth while you waited for the slicing. I’m a little less attached to the routine at Cava or Chipotle, though I did occasionally make spur-of-the-moment choices based on which meat had come off the grill most recently.

But in either case, I’ll be ordering in advance next time, because I’d rather wait anywhere than in line. The future at, say, Chipotle probably doesn’t include you hesitating between black and pinto beans as a worker waits for you to make a choice; you’ll do that at a screen somewhere else in the restaurant, or at your office before you arrive. And the staff, in turn, will interact not with customers but with an endless parade of printed receipts, with instructions for extra cheese here and there.

On the labor side, the transition offers a disquieting parallel to the mass shift of department store workers to Amazon warehouse staff. Once Sandra at Macy’s advised you on getting the right cut; now she shuffles the boxes when you once again return your pants that don’t fit.

For customers, meanwhile, the new ordering system’s biggest victim is the whim of the lunchtime appetite. You can still make a spontaneous turn into a fast-casual restaurant, but there may be a lot of invisible customers in line ahead of you.


Post a Comment