ARLINGTON, Va. Hans Hess, the founder and chief executive of organic hamburger concept Elevation Burger, typifies an emerging movement toward mobile commerce. When he’s on the go, he uses his iPhone to download driving directions rather than relying on maps, and he places takeout orders from one of the eight restaurants on Elevation Burger’s iPhone application.
Smart-phone apps until recently had not been widely adopted in the restaurant industry — certainly trailing far behind other social media — because of operators’ concerns over development costs or customers’ willingness to download and use them. With new ties to online ordering and payment technologies, that is changing.
Hess said a smart-phone app became cost-effective as part of his chain’s mobile- and Web-ordering system, and that the iPhone app fit in with Elevation Burger’s core customer.
“It’s pretty much in keeping with our demographic,” Hess said. “A fair number of people at our restaurants own iPhones. The more channels you give people to order your product, there’s an intangible that comes with that. Selling burgers is part of it, but the bulk of the motivation is giving guests another alternative for ordering what’s already integrated into their lifestyle.”
Elevation Burger’s vendor for the smart-phone app, OrderTopia, integrates restaurants’ m-commerce and e-commerce functions into one common back-office platform. So whether a customer places an order via an iPhone, online or at the restaurant’s POS, it’s all centralized.
For Elevation Burger, however, the big pay-off is in the convenience apps offer, which is meant to bolster guest loyalty, Hess said.
“ROI is more of a long-term prospect,” he said. “The decision was weighted more in how to serve guests better. I don’t see it as pushing up the average check; it’s visits.”
He added that it’s too early to report firm metrics for iPhone-driven sales, but he said downloads of the app have been steadily increasing without advertising support, and the app does get used when downloaded.
Seattle-based Starbucks Corp. recently expanded the test of its Starbucks Card app, which lets users register their loyalty card numbers to an iPhone app and enables them to check their balances or redeem member perks like free brewed-coffee refills and two hours of free Wi-Fi. The app produces a bar code on the phone that can be scanned just like a Starbucks Card to make purchases or access rewards.
The country’s largest coffeehouse chain already had integrated the Starbucks Card app at a handful of stores in Seattle and the Bay Area, and the program was extended in early April to its 1,000 stores located in Target retail centers.
Some m-commerce programs even cut out the middleman of a smart-phone app, such as text message payments from Venmo, currently under beta test at AJ Bombers, one of social-media-savvy operator Joe Sorge’s restaurants in Milwaukee. Venmo is a platform developed last year that ties bank accounts to cell phone numbers, allowing text messages to dictate payment and invoicing commands.
Sorge was drawn to Venmo’s program because it links a user’s bank information to any mobile phones that allows for simple texting, meaning it’s not dependent on any one kind of smart phone.
“This [function] is the ability to text people currency,” Sorge said. “Venmo looked around at all the things that were changing, and it’s easy to identify that our monetary system hadn’t changed much. It’s been credit cards, cash and checks for some time. It feels like we keep stepping closer and closer to mobile-enabled everything, and as long as people are planning those paths with people’s security in mind, it’s good.”
AJ Bombers is among the first restaurants to test Venmo’s model for the hospitality industry, working to smooth out kinks like adding gratuity after paying a bill. As with its aggressive early adoption of Twitter and Foursquare, the restaurant’s trial with mobile payments has made AJ Bombers a hot spot for Milwaukee’s tech-savvy diners.
When Sorge opens his newest restaurant, Smoke Shack, on July 4, he’d like to encourage texting money through Venmo as a preferred payment method.
“A lot of this has to do with top-of-mind awareness of the edge your business is riding on,” Sorge said. “To be the business people look to for those kinds of advances is fun. I see the financial reward of being the place where they come to try it out. Our local papers have picked up the fact that we have an iPad just for customers to play with.”
AJ Bombers worked to sign up more customers to the mobile-payment service by tying a charity event to Venmo. When guests made a text donation to the Multiple Sclerosis Society following Sorge’s and his servers’ instructions, they were signed up with Venmo and could then pay their bills with the service as well.
Sorge hopes the use of the service goes viral from there.
“The purpose of our beta-test is to work out small bugs as it pertains to the hospitality industry, and I think it does indeed fit in with our business,” he said. “The potential for mobile payments and eliminating the need to carry a wallet — I can’t overstate its importance.”
Contact Mark Brandau at [email protected].
