Online food ordering

Online food ordering is a process of ordering food from a local restaurant or food cooperative through a web page or app. Much like ordering consumer goods online, many of these allow customers to keep accounts with them in order to make frequent ordering convenient. A customer will search for a favorite restaurant, usually filtered via type of cuisine and choose from available items, and choose delivery or pick-up. Payment can be amongst others either by credit card or cash, with the restaurant returning a percentage to the online food company.

In May 2015, TechCrunch reported that "of the $70 billion [takeout and delivery market], only about $9 billion (roughly 13 percent) is online."[1]

Service types

Restaurant-controlled

The preexisting delivery infrastructure of these franchises was well suited for an online ordering system, so much so that, in 2008, Papa John's International announced that its online sales were growing on average more than 50 percent each year and neared $400 million in 2007 alone.[2]

Local companies have teamed up with e-commerce companies to make ordering quicker and more precise. Annie Maver, director of operations for The Original Pizza Pan, Inc. of Cleveland, Ohio comments that "the system is good for customers who don't speak English."[3]

Some restaurants have adopted online ordering despite their lack of delivery systems, using it to manage pick-up orders or to take reservations.

Independent

Independent online food ordering companies offer two solutions. One is a software service whereby restaurants purchase database and account management software from the company and manage the online ordering themselves. The other solution is an Web-based service whereby restaurants sign contracts with an online food ordering website that may handle orders from many restaurants in a regional or national area.

One difference between the systems is how the online menu is created and later updated. Managed services do this via phone or email, while unmanaged services require the customer to do it. Some websites use wizards to find the best-suited menu for the customer.

Food cooperatives

Food cooperatives also allow consumers the ability to place an order of locally grown and/or produced food online. Consumers place an order online based on what is available for the ordering cycle (month, week) and then pick up and pay for their orders at a central location.

Apps

Many restaurants offer the technology to place an order with an app, and may offer a discount or bonus item when the order is placed.

Online menus

Main article: Online menus

Advantages for online ordering

Customers are turning more towards online food services options for the convenience its offers, the variety of options and affordable food choices. [4]

Disadvantage for online ordering

Customers are not able to ask about quality of food or ask for any specialized diet foods. It is more difficult to ask for gluten free or allergy free foods with online ordering. Also, it is more possible for a customer to place an order but never pick up the order which can lead to waste of food and possibly a loss of profits.

Timeline of online food delivery

This is a timeline of online food delivery.

Big picture

Time period Key developments in online food delivery
1996–2001 This era is characterized by the rise of the Internet, the dotcom boom and the subsequent crash. Dotcom startups like Webvan, HomeGrocer, and Kozmo started online grocery delivery, but ended up closing in 2001 after the dotcom crash. Seamless is also founded.
2001–2010 GrubHub is founded. By the late 2000s, major pizza chains have created their own mobile applications and started doing 20-30% of their business online.[5]
2011–2015 With increased smartphone penetration, and the growth of both Uber and the sharing economy, food delivery startups start to receive more attention again. This era is associated with the founding of Caviar and Instacart.[6] By 2015, online ordering is about to overtake phone ordering.[7]

But by September, online delivery still accounted for just about 3 percent of the 61 billion U.S. restaurant “visits” or transactions.[8]

Full timeline

Year Month and date (if available) Event type Details
1989 FoundingsPeapod, which pioneers the online grocery delivery concept, is foundedby Andrew and Thomas Parkinson in Evanston, IL.[9]
1994JanuaryNew Entrants “PizzaNet” – Pizza Hut’s digital ordering hub, launches, and accepts the first-ever online order, a large pepperoni, mushroom and extra cheese pizza.[10]
1996JulyFoundingsWebvan, an online grocery delivery service, is founded by Louis Borders. It IPOs on November 5, 1999.[11]
1998MarchFoundingsKozmo, an online delivery services for many services (including groceries) founded.[12]
1999December 1FoundingsSeamlessWeb is founded in order to provide companies with a web-based system for ordering food from restaurants and caterers.[13]
2000June 26Mergers and AcquisitionsWebvan buys out HomeGrocer.[14]
2001April 12ClosingsKozmo shuts down.[15] The company had made profits in New York, Boston and San Francisco in December and secured $25 million in investments prior to shutdown.
2001JulyClosingsWebvan shuts down.[16]
2001 New Entrants Papa John's pizza launches online ordering.[17]
2002MarchNew EntrantsSafeway begins delivering online grocery orders.[18]
2004 FoundingsGrubHub, an online restaurant delivery service, is founded in 2004 by two web developers, Matt Maloney and Mike Evans, who were looking for an alternative to paper menus.[19]
2007AugustNew EntrantsAmazonFresh initially offers home grocery delivery to residents of the Seattle suburb of Mercer Island in an invitation-only beta test in August 2007.[20]
2008March 1FoundingsEat24hours, an online restaurant delivery service, is founded.[21]
2009JanuaryFoundingsZeroCater, a startup for delivering catered food to businesses, is founded.[22][23]
2009JulyNew EntrantsPizza Hut launches a free iPhone application today that offers mobile ordering and games to play while one waits for delivery.[24]
2012FebruaryFoundings DoorDash, which would later become a Y-Combinator summer 2013 food delivery company, issues its first delivery.[25]
2012July 1FoundingsInstacart, which offers an app that lets users order groceries and delivers them, is founded.[26]
2012September 12Foundings Caviar launches, and starts off offering delivery in the San Francisco area from high-end restaurants rated 4-stars or higher on Yelp.[27]
2013AprilFoundings Sprig, a delivery service for healthy meals, launches in San Francisco.[28]
2013JuneFoundingsSpoonRocket, a Y-Combinator-backed company for delivering fast food meals, is founded.[29]
2013JuneCompaniesAmazonFresh expands out to Los Angeles.[30] It would later expand out to San Francisco by December 2013.
2013AugustMergers and AcquisitionsSeamless and GrubHub merge.[31]
2014August 4Mergers and AcquisitionsSquare acquires Caviar.[32]
2015February 10Mergers and AcquisitionsYelp acquires Eat24.[21]
2015February 18New EntrantsUber launches into the food delivery space with UberEATS, starting off in Barcelona.[33]
2015April 16Indian MarketOnline food ordering business in India witnessing exponential growth. Organized food business reaches worth US$ 48 billion, of which food delivery is US$ 15 billion. [34] Several startups rose in 2015 including Zomato, TinyOwl, Swiggy, Innerchef, Food Panda and Fresh Menu with focus on apps. [35]

See also

References

  1. ↑ "A Secular Shift To Online Food Ordering". TechCrunch. 2015-05-07.
  2. ↑ Associated Press. "Papa John's hits online ordering milestone." 5 May 2008.
  3. ↑ Soder, Chuck. “Online Ordering System Will Get Bigger Slice of Case Students' Pie.” Crane's Cleveland Business News. 14 May 2007.
  4. ↑ The retailer,EY’s publication in consumer products and retail sector (Report). EY. January–March 2015.
  5. ↑ "Why Pizza Giants Want Customers to Click, Not Call, for Delivery". Adage.com. Retrieved January 10, 2016.
  6. ↑ "Delivery Start-Ups Are Back Like It's 1999". The New York Times. Retrieved January 10, 2016.
  7. ↑ "Online food delivery ordering is about to overtake phone ordering in the US - Quartz". Qz.com. Retrieved January 10, 2016.
  8. ↑ "Restaurant food delivery heating up". Columbian.com. Retrieved January 10, 2016.
  9. ↑ "Peapod". Retrieved January 8, 2016.
  10. ↑ "Pizza Hut Celebrates 20th Anniversary of World's First Online Purchase With 50 Percent Off Online Deal for Hut Lovers Members". Restaurantnews.com. Retrieved January 8, 2016.
  11. ↑ "Webvan announces shutdown, Chapter 11 filing - Jul. 9, 2001". CNN. Retrieved January 10, 2016.
  12. ↑ "E-Commerce: The failure of Kozmo.com". Threeg1b.blogspot.com. Retrieved January 10, 2016.
  13. ↑ "Jason Finger of Seamless: The Random Idea That Sparked a $100M Business". :. Retrieved January 8, 2016.
  14. ↑ "Webvan Group buys HomeGrocer.com in $1.2B deal- - Jun. 26, 2000". CNN. Retrieved January 10, 2016.
  15. ↑ "Kozmo to End Operations - 1,100 People to Lose Jobs". The New York Times. April 12, 2001. Retrieved January 10, 2016.
  16. ↑ "Webvan goes under / Online grocer shuts down -- $830 million lost, 2,000 workers fired - SFGate". Sfgate.com. Retrieved January 8, 2016.
  17. ↑ "Papa John's Launches Mobile Gift Card Ordering Site - Restaurant News - QSR magazine". Retrieved January 10, 2016.
  18. ↑ "Safeway begins delivering online grocery orders / Albertson's also will help fill the gap left when Webvan closed down - SFGate". Sfgate.com. Retrieved January 8, 2016.
  19. ↑ "GrubHub's CEO On The Shock Of Outgrowing Three Offices In A Few Short Years - Business Insider". Businessinsider.com. Retrieved January 8, 2016.
  20. ↑ "Amazon starts grocery delivery service - seattlepi.com". Seattlepi.com. Retrieved January 8, 2016.
  21. 1 2 "Eat24". Retrieved January 10, 2016.
  22. ↑ "How ZeroCater Became A $100M Startup With $1.5M Of Investment". Foodtechconnect.com. Retrieved January 12, 2016.
  23. ↑ "ZeroCater". Retrieved January 12, 2016.
  24. ↑ "Pizza Hut First Pizza Chain to Launch iPhone App". Adage.com. Retrieved January 8, 2016.
  25. ↑ "Y Combinator-Backed DoorDash Delivers Food Quickly In South Bay, Hopes To Expand Beyond Food". Techcrunch.com. Retrieved January 10, 2016.
  26. ↑ "Instacart". Retrieved January 10, 2016.
  27. ↑ "Former 'MunchOnMe' Team Launches Caviar, A Curated 'Seamless'". Techcrunch.com. Retrieved January 10, 2016.
  28. ↑ "With $1.2 Million In Seed Funding, Sprig Launches To Bring Fast, Healthy Meals To SF Eaters For $12 Each". Techcrunch.com. Retrieved January 12, 2016.
  29. ↑ "SpoonRocket Delivery Service Takes Flight". Eastbayexpress.com. Retrieved January 12, 2016.
  30. ↑ "AmazonFresh Grocery Delivery Service Now Available In Los Angeles". Geeky-gadgets.com. Retrieved January 8, 2016.
  31. ↑ "GrubHub and Seamless complete merger - Chicago Business Journal". Bizjournals.com. Retrieved January 8, 2016.
  32. ↑ "Square Acquires Food Delivery Service Caviar". Techcrunch.com. Retrieved January 10, 2016.
  33. ↑ "Barcelona, your meal is arriving now!". Retrieved January 10, 2016.
  34. ↑ IBEF (January 31, 2016). "Food Industry - India Brand Equity Foundation". Retrieved February 29, 2016.
  35. ↑ "Indias growing appetite for food service startups".
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