Upserve Launches Integrated Online Ordering. Is It A Deal?

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We laughed when Noah Glass, Olo’s founder, shared a blog post where the COO of a 500-unit restaurant chain, at a conference no less, said the following:

You should dedicate an employee to watching the tablets for when new orders arrive, take the orders, and key them into the point-of-sale system.

You’re not going to fix this level of unsophistication in executive ranks without activist intervention, but you can change the technology so their incompetence doesn’t get in the way.

Upserve, a hybrid POS, payments, and software provider, has rationalized doing just that.

Upserve has unveiled their own, integrated online ordering tool that will be available to all Upserve Pro subscribers.

Customers using Upserve’s online ordering won’t pay any additional monthly fees for the new product. Like Xenial POS, there appears to be a growing trend of bundling solutions on top of the POS for an aggregate price.

We had two immediate questions for Upserve given their announcement. First, won’t offering your own online ordering tool cannibalize your Marketplace efforts? That is, won’t third party online ordering providers shy away from partnering if you’re pulling the rug out from underneath them? Second, is building your own online ordering the way to go? Given how low margin POS has been historically, it struck us as a better option to partner with a best-of-breed.

Upserve told us that there is no backhanded deal to preclude companies who offer similar services from competing in their marketplace. “Our goal was to allow restaurants to choose what works best for them because we understand that what works for one restaurant may not work for another – it depends on their location, demographics, cuisine, popularity, and what their business goal is.” Obviously, though, if a restaurant is subscribing to Upserve Pro there’s little need to pay to use another ordering provider unless that other provider is that much better, or offers something critical you can’t get with the first provider.

Like us, Upserve did notice problems with demand generating order platforms like Grubhub, who charge ludicrously high fees. “Aggregators are great for restaurants who want to attract new diners… but paying the same commission fee for repeat orders can take a lot of the restaurant’s bottom line.” Upserve’s online ordering solution is meant to stick on a restaurant’s own webpage, where they can direct customers for less reliance on 3rd party aggregators (and decreased fees). This move comes on the heels of Grubhub and Upserve’s integration partnership; given that Upserve’s efforts will undoubtedly take revenue away from Grubhub, who would prefer that repeat diners funnel through Grubhub, you’d have to think this might be a touchy subject, no matter how diplomatic Upserve tries to be. We, however, understand Upserve’s position and why it is better deal for savvy merchants.

On the second question, Upserve told us they built the entire online ordering platform in-house. “We decided to build, rather than buy, for a few reasons. First, Upserve had existing infrastructure that could be used to build products for consumers. This infrastructure gave us the experience and skills to solve typical ecommerce problems quickly, whereas other companies may not have the in house skills or tools to do so. Second, buying or white labelling would require us to spend quite a bit of time doing integration of a dissimilar product, rather than focusing on the features and smooth operations that make Upserve online ordering a tight, easy-to-manage service for our customers. Third, Upserve builds analytics and mobile products on a daily basis which meant that we could use existing teams to get the work done, maintain it, and improve it over time.”

There are some valid points in there: in a perfect world everything would be managed under one roof by the same people. But most companies do not have the luxury of tens of millions of investor dollars to do it – especially in point of sale. Because online ordering requires a tight integration, and sloppy third party tools can really screw up both the merchant and, more worryingly, customer experience, Upserve likely found a niche where a homegrown solution would be adequate. Does that mean it’s the best? Only time will tell. But if you’re paying for Upserve Pro, that an integrated online ordering tool, which usually costs $100/mo, is thrown in for free can’t be looked down upon.

Verdict? View Upserve’s Online Ordering tool as a freebie. It’s too soon to know if it will stand up on its own, but it sure beats paying a 3rd party 20% commissions for repeat customers. For that we tack Upserve’s efforts in the right column. That is, Upserve invested money into building a solution that would save their customers money and provide a better experience. That is noble.

On a closing note, just remember that there’s at least one restaurant COO making hundreds of thousands of dollars who doesn’t understand a core facet of his/her business. Ahh, makes you wonder when Amazon will get here, doesn’t it?

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