Hi-Tech Without Hi-Touch

The Lempert Report
May 19, 2017

Over the past couple of years there has been much ballyhoo over Starbucks and others offering mobile ordering and how great it was and how it increased sales.

A new report in Business Insider finds that maybe the halo has been broken. Mobile ordering is expected to be a $38 billion industry by 2020, accounting for more than 10% of total fast-food sales, according to a BI Intelligence report. 

And while supermarkets have rushed to add mobile ordering for their delis and grocerants, perhaps its time to take a more wait and see approach. 

In January, Starbucks reported that the number of transactions in their stores dropped 2% in the most recent quarter, in large part due to problems caused by mobile ordering. Starbucks recently admitted, according to BI, that some of its customers say they have walked out of stores after seeing the crowds waiting for mobile pick-ups. 

Customer complaints about wait times averaging 20 to 30 minutes forced Chipotle to invest in a new system to fulfill online orders, which the company rolled out in late February.   

Shake Shack, reports that the influx of app orders can have a "slowdown impact" at its busiest locations at peak hours.  

Sweetgreen was forced to email customers who had ordered from a New York City location to say that mobile orders had been delayed roughly 15 minutes.  

McDonald's announced it would launch mobile order-and-pay technology in all 14,000 of its US restaurants by the fourth quarter of this year, a major change that the chain is hoping will give its traffic a much needed boost. Or not! 

BI goes on to correctly point out “ if chains want mobile ordering to succeed, it isn't as simple as just adding an app.  These chains will need to create an entirely new ordering experience, inside and outside of the store”.