TIME TO GO APP?

Is the Investment Right for You?

More than ever, restaurants are populating cell phone screens with customized restaurant apps that allow patrons to order and pay online, get GPS directions for pickup and even score invitation-only dinners with the chef.

Most major restaurant chains develop their own mobile apps while multi-units and independent operators tend to use third-party delivery platforms, such as Uber Eats, or online restaurant ordering systems, such as ChowNow, to connect customers with their restaurants. That’s no longer a given as restaurateurs try to determine whether better options are available, such as a ready-made food ordering app and other technologies.

The fact is some restaurants are finding it cumbersome to organize orders from multiple third-party vendors, alongside their in-house to-go orders and phone delivery orders. While online restaurant ordering systems expand a restaurant’s reach, commissions from third-party delivery services can take a 10 to 30 percent bite out of sales.

Even though the cost of building an app is expensive, the features are tantalizing: mobile reservations, ordering and payment; loyalty rewards and contest giveaways; instant messaging and other social media integration with customers; flagging of special events and promotions; menus and beverage lists; and image galleries.

Still, is an app right for you? Are there better alternatives? Here are some questions to consider.

HOW MUCH WILL A RESTAURANT APP COST?

The cost of building an app depends on the software and features. App developer Applico says the price range can be anywhere from $5,000 to $500,000, with most costing $100,000 to $300,000.

WHAT ABOUT APP UPKEEP?

Apps require maintenance, such as menu changes, new restaurant promotions and smartphone updates.

Software developer App Press says an app that costs $100,000 to launch, can reasonably expect about $20,000 a year in maintenance and updates.

WILL YOU RUN INTO APP FATIGUE?

Even though off-premise dining is on the rise, the National Restaurant Association reports a recent dip in the proportion of restaurant tech fans, including online restaurant ordering systems and smartphone apps. The cause isn’t clear, but technology saturation might be a culprit.

At Market Garden Brewery in Cleveland, owner Sam McNulty launched an app in 2013 that let patrons make reservations, contact the host stand, and view menus, among other conveniences. But his company dropped it after a year. Market Garden didn’t see any tangible improvement in business, which McNulty attributes to app clutter as a possible deterrent. “We’re focused instead on having an up-to-date website,” he says.

IS AN APP INVESTMENT WORTH IT?

Assess expectations for customer visit increases and check average growth. Then set revenue projections against a budget for the app project. Don’t forget about “soft” factors, such as the potential cost in forfeited brand power if you don’t have your own app. Another consideration: How much of the data collected through an outsourced or unique app will you own and how much can be used for restaurant marketing? “For smaller brands, the potential upside value is less,” said Oliver Page, a principal with Deloitte Digital.

ARE THERE OTHER OPTIONS BESIDES AN APP?

A robust, up-to-date website supported by results-driven marketing could be a better fit for smaller restaurants. Companies like ChowNow offer a suite of off-the- shelf, ready-made food ordering tools, customizable to a restaurant’s brand, which accommodates online ordering from its website, Facebook or Instagram profile – commission-free.

But if you’re set on giving diners an app-like experience, ChowNow also offers a branded app powered by its technology. It currently offers one for Android. An iOS version will soon be rolled out, according to CEO Chris Webb.

It will be available in upcoming months after beta testing.