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Restaurants rising: Eating “food away from home” at home

4 min read

Restaurant and Foodservice

Geoffrey A. Moore’s 1991 hit book “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers” has become a technology industry bible for understanding the recurring patterns of the adoption of disruptive innovation. Moore breaks up the population into five groups: innovators, early adopters, early majority, late majority and laggards. The “chasm” refers to a gap between the innovators/early adopters groups and the others. While the innovators and early adoptions are excited to try new technology for technology’s sake or to gain a differentiator from the competition by being early to adopt, the later groups are harder to convince without solid evidence and may resist technology adoption entirely until the innovation has become the de facto standard.

The principle of the innovation lifecycle and the struggle associated with crossing the chasm has been incredibly helpful to me as an innovator within the restaurant industry, thinking about the industry’s innovators, early adopters, early majority, late majority, and laggards. When Olo hit the market in 2005 with a digital ordering platform for online and mobile ordering that would enable any restaurant group to offer its guests a new way to order and pay from their own device and Skip the Line and have a more convenient, accurate and personal experience, I knew that we had to find what Moore calls the “target market” of innovators.

We were incredibly lucky to be launching Olo in parallel with the rise of the fast casual segment and to link up with early leaders of the better burger movement like MOOYAH, Jake’s Wayback Burgers, and Five Guys Burgers & Fries as some of Olo’s earliest clients. These fast casual burger chains had similar challenges that Olo’s digital ordering platform could help them to overcome. First and foremost, they weren’t as convenient as their fast food competitors and some would-be guests would choose to go elsewhere on a short lunch break as a result. By using digital ordering to let customers order/pay ahead and schedule a pickup time at the restaurants Olo’s fast casual burger clients could effectively have their meals ready on-demand when the customers walked in the door. This neutralized the “less convenient than fast food” knock on fast casual burgers.

From 2005 to 2015, the rise of the smartphone from fewer than 5% of mobile phone users to now more than 75%, along with the consumer familiarity with on-demand apps like Uber, HotelTonight and AirBnB, have set the stage for widespread adoption of digital ordering. As the National Restaurant Association’s “Restaurant Industry 2020: A Snapshot of the Future” says, “to remain integral to consumers’ changing lifestyles, the restaurant industry has had to learn to anticipate diners’ needs. Ordering food on a smartphone or tablet computer would have seemed the stuff of science fiction in the 1960s, but today it is a commonplace occurrence.” While fast casual burger chains were the innovators for digital ordering and the broader fast casual chains were the early adopters, we are now witnessing a chasm crossing for digital ordering.

If one were to chart the restaurant industry’s chains with “average check size” on the X-axis and “number of units” on the Y-axis, you would see a pattern that resembled a dumbbell. The handgrip in the middle would be the fast casual restaurant chains, with their ‘tweener check size and relatively small (but fast growing) number of units per chain. The left bell would be the quickservice restaurants, with their low check size and high unit counts. The right bell would be the casual dining restaurants, with their relatively high check size and high unit counts. We now see digital ordering crossing two chasms simultaneously: leaping from fast casual to quickservice and from fast casual to casual dining at the same time.

Quickservice restaurant chains have come to understand that guests demand the convenience, accuracy and personalization that comes with digital ordering and that they can learn about their guests to become more hospitable. Casual dining restaurant chains have come to understand that 75% of restaurant industry transactions are for off-premise consumption, meaning that digital ordering can be a key tool in creating a great off-premise program around curbside pickup.

Noah Glass is the Founder & CEO of Olo. Since 2005, Olo has helped restaurant brands increase revenue per square foot by delivering faster, more accurate, and more personal service through digital ordering. Today, over 10 million consumers use the Olo platform to order ahead and Skip the Line at the restaurants they love.


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