The Smartphone Generation

At Pizza Expo this year, I enjoyed talking with quite a few Independent pizzeria owners about their businesses. A popular topic was “mobile ordering,” where consumers order restaurant takeout and delivery food electronically via smartphone. While a few Independents said they are taking mobile orders, many wondered out loud whether it is a fad or a trend.

Because it is our company’s style to try to understand issues which can impact “our kind” of quality oriented restaurateurs, I decided to learn more about mobile ordering. After reviewing the facts, here is why I believe that it is an important trend impacting Independents who depend on phone orders.

Before explaining why I believe it is a trend, let me review the difference between a fad and a trend.

A fad is an emerging idea which spreads rapidly but doesn’t last. For example, restaurant magazine covers often hype “the next big flavor” to grab readers’ attention. But, in reality, most “new flavor sensations” are really fads which quickly fade.

On the other hand, a trend is a new idea which leads to a permanent shift in some consumers’ behavior. A good example of a genuine flavor trend is how gourmet quality coffee gained (and retained) popularity since the 1990s.

The concept of fads vs. trends also applies to the types of business services or conveniences consumers have come to expect from businesses.

For example, when bank owned consumer credit cards were first introduced in the 1950s (e.g., Diner’s Club), many retailers took a wait and see approach. But over time, as more consumers found paying by credit card to be more convenient than paying cash, some (not all) customers stopped carrying cash altogether.

As that trend grew, many retailers who had previously resisted accepting credit cards ended up adopting this new form of payment, rather than losing business from these “credit only” customers.

Which brings us to why I believe that mobile ordering is an important trend impacting Independent restaurants who depend on phone orders.

According to the Wall Street Journal, mobile orders (mostly placed by smartphone) have steadily grown over the last five years and now account for more than 40% of national pizza chain deliveries. Said another way, for every three traditional voice to voice phone orders, the chains also receive two additional orders electronically!

To be fair, some people considered “electronic ordering” a “fad” when it was first introduced by the national pizza chains twenty years ago. Back then, consumer adoption was limited by the fact that most Americans visited the Internet via desktop PCs. That meant that they could only order pizza delivery online only when they were physically at their PC.

What changed since then was the rapid consumer adoption of “smartphone” technology. Today, these pocket sized computers accompany their owners everywhere, offering nearly universal Internet access.

As a result, smartphones have become the main way a majority of American adults and 90% of those under 30 check texts and email, look up information, make online purchases, and, increasingly, order restaurant food for pickup or delivery.

Like fellow members of the “smartphone generation,” I know from experience that my two oldest sons, Kyle (20) and Joey (17), treat their smartphones mainly like computers, rather than telephones. Sure, the boys still “answer the phone” when Dad or Mom calls from home. But when they initiate contact with friends or family via smartphone, they almost always choose text or another electronic format (not voice to voice).

What does this consumer trend mean for Independent restaurants? If customer initiated phone orders are important to your business and you are not taking electronic orders too, you are probably losing sales from quality oriented consumers who prefer to order that way.

The good news is that, as La Trattoria editor Steve Rouse has learned (and shared with you elsewhere in this issue), it is now relatively simple and cost effective for Independents to begin taking orders electronically, even without owning a computer.

In other words, the business risk to ignoring the “mobile ordering” trend is real, but the cost of trying it out appears within reach!