Using chatbots to launch delivery, keep customer connection

Using chatbots to launch delivery, keep customer connection

By Erik Chan, CEO and founder of OrderParrot

Delivery is starting to become table stakes in the world of limited-service restaurants, a trend not lost on Panera Bread. It announcedthis week that it’s hiring 10,000 employees by the end of 2017, and revamping the internal processes. Panera claims delivery will add an extra $250,000 annual revenue to each of its stores.

Panera President Blaine Hurst cites the need to direct the entire customer experience as the primary reason for taking delivery in-house. For restaurant chains of Panera’s size, partnering with third party delivery companies just isn’t an option. It would be too costly to allow any company to become the point of interaction with customers.

Using chatbots is one way to offer delivery while keeping a direct relationship with the customer.

Chatbot convenience and adoption

A growing list of restaurant brands have already invested in chatbots, including Subway, Burger King, Pizza Hut, Taco Bell, and Wingstop. Chatbots are like automated restaurant staff customers that can interact with via a chat interface. Restaurant chatbots can help take orders and payment, provide store hours, collect customer feedback, among others. Chatbots are similar to friends on a contact list and live in chat apps (Facebook Messenger, Slack, Telegram, Text Messages, etc.)

In early 2015, the number of people using chat apps surpassed those using social networks. Facebook announced this month 1.2 billion users are on Messenger with 2 billion messages already being sent between customers and brands per month.

A recent Forrester report found that consumers use only 25 to 30 different apps each month and spend 88 percent of their time in just five downloaded apps. Most apps are forced and require significant marketing dollars to convince consumers to download them. The report suggested brands can instead leverage third-party platforms like Messenger to serve more customers on mobile. In 2015, it was reported 72 percent of US smartphones have chat apps installed, making it more adopted and more convenient for customers than all first and third party delivery apps combined.

Chatbots are natural for delivery

By combining the convenience of a known chat interface for the consumer and retaining the customer experience for the brand, chatbots provide a natural avenue for restaurant delivery. The customer, on his way home from work, can quickly order dinner on the same chat app used to communicate with his/her family. The fewer steps required for customers to engage the brand and place orders results in increased sales. In addition, data about the customer such as order history, customer information, frequency of orders, and others are collected to better serve the customer in the future.

Self-delivery logistics services

Strategizing around delivery and investing in new infrastructure like Panera has opted to do is no easy feat. An alternate option for restaurant chains is to utilize logistics- as- a-service companies to support delivery. UberRush and Postmates On Demand are example logistics services that complement restaurant chatbots to offer delivery without requiring significant investments in infrastructure. In this scenario, customers place orders directly with the restaurant chatbot and a request is made out to the logistics service to deliver the order from the restaurant to the customer. The benefits include increasing store sales through order delivery, retaining communication with customers (instead of surrendering them to third party delivery companies), in addition to keeping the majority of the margins.

The question for restaurant executives today is not whether to offer delivery, but how they plan to do so.

Photo: fotolia via Erik Chan

Topics: Systems / Technology, Trends / Statistics

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