Three months after its launch in 2015, Starbucks’ mobile order ahead application was already generating 20 per cent of sales in the US.

Providing an indication of the consumer appetite for applications that allow them to use smart phones to order and pay for items such as coffees and fast food, before they arrive at the outlet and avoid the queues.

Starbucks Mobile Order & Pay app detects customers’ nearest store when they order, then has their order waiting for them when they arrive.

The Starbuck’s app is one of several mobile order ahead applications from US retailers, including Dunkin’ Donuts, Domino’s and Subway, while in Australia, start-up Hey You is offering mobile order ahead to cafes and restaurants.

While the convenience benefits to consumers are obvious, Richard Crone of mobile strategy firm Crone Consulting LLC says order ahead can increase a restaurant’s capacity, especially during peak times where in the past capacity was limited by the number of cash registers.

“Order ahead is a strategic move, not only for restaurants and quick service, but it will be for every retailer,” said San Francisco-based Crone. “The important point is that payment is subsumed into the process and is an automatic piece of the experience. The opportunity is to take out the time, the friction and the interruption of payments in the experience and simply subsume it.”

Crone refers to order ahead as the “Uberisation of payments”, in that the payment happens automatically, just as it does when an Uber user completes their journey.

To take advantage of the service, businesses have to enrol a payment account, either pre-pay, credit or debit.

“The reason that’s so powerful is when a restaurant registers a payment account they have to KYC (Know Your Customer) by law; the restaurant now benefits by having a validated and accurate Customer Relationship Management (CRM) system,” says Crone. “They now know who the customer is and they can reach them and provide relevant communications before, during and after the experience.”
 
More Predictive Offerings
Geolocation can help restaurants ensure that customers’ orders are ready on time. For instance, Five Guys Hamburgers in the US uses geolocation to start making the hamburger based on how close the customer is and they wait until the customer is in the store before they put the French fries in the bag.

Pay ahead is also a precursor to more predictive customer offerings using geolocation.

The machine learning garnered from past orders and preferences can help restaurants render relevant, personalised offers in a way that enhances the brand reputation and doesn’t detract from it, says Crone. Retailers are using this data to drive two key metrics – One More Visit and One More Item.

Adam Theobald founded Sydney-based Hey You (formerly Beat the Q) after queueing for 45 minutes to buy a burger at a concert. “We want to tap into both a time poor society and a general growing impatience, so we looked around and thought cafes would be a great starting point given it is an important daily ritual,” he said, adding there are two billon transactions in Australian cafes every year.

Hey You has signed up about 600 stores so far, mostly cafes but also a growing number of food outlets. It charges merchants a subscription of $12.50 per week and a transaction fee of 3.9 per cent, which also includes credit card fees, and Theobald says the industry is gaining “real momentum”.

The system is geared towards speed and allows customers to order with four taps of their phone. The orders are automatically paid for via the pre-set payment option then are automatically sent to the point of sale.

Hey You is the result of a merger between Beat the Q and online shopping network Posse and has attracted $5 million in Series A from investors including Westpac’s venture fund Reinventure and Exto Partners.

It’s next project is group ordering – simplifying the office coffee run by allowing groups of people to order and pay for their coffee on the same device, as well as other items such as food.
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