Andrew Robbins, CEO of Paytronix, explains why Marc Andreessen’s decade-old declaration that “software is eating the world” is especially relevant now, as the restaurant industry has been forced to go digital-first practically overnight, with over 30 million new digital guest profiles created in 2020. Read more of Robbins’ insights in The Connected Economy’s Power Source – CEO Edition.
A decade ago, Marc Andreessen declared that software is eating the world – and for most industries, that happened with amazing speed. Companies like Uber and Amazon completely transformed transportation and brick-and-mortar retail. Here at Paytronix, we already had nearly a decade of experience under our belt helping restaurants launch digital loyalty programs.
Still, it would be another few years before DoorDash and Uber Eats burst onto the scene – and even then, it was a slow growth. The third-party delivery services sold restaurants on the idea of adding revenue, not augmenting it. In that context, payments could only exchange currency, not connect a full digital ecosystem.
Despite the availability of online ordering technology and delivery services, the restaurant industry adopted this technology slowly because they were focused on improving their on-site services. Sure, some major brands focused on technology, like Panera Bread, Chipotle, Starbucks, McDonald’s and other household names, but independent restaurants and smaller brands tended to eschew major technology investments. For them, “guest engagement” focused on things like the decor, menu design, scents, wait times and food service. In that context, a payment simply came at the end of the physical transaction.
The pandemic changed everything, seemingly overnight. DoorDash, in its S-1 filing just before going public, reported that in 2019, it achieved $8 billion in gross order value. In just the first three quarters of 2020, that number hit $16.5 billion. And keep in mind that the pandemic didn’t hit the industry hard until March of 2020. Our own statistics show that offpremises ordering and consumption more than tripled due to COVID. Throughout 2020, guests consumed 63 percent of restaurant food at home, accounting for a $486 billion chunk of the industry.
A huge benefit of this transition is the digitization of the guest experience. In 2020, we have seen over 30 million new digital guest profiles. Restaurant guest engagement now happens almost exclusively through tools like loyalty programs, online menus, mobile ordering and delivery. Software has eaten the restaurant world.
Selected by EFXA