The Opportunity for an Online Ordering Service

March 1, 2016
Meet consumer purchasing expectations by offering an online ordering component.

There is little doubt that consumers enjoy shopping online. In 2015 market intelligence agency Mintel reported that nearly 70 percent of U.S. online adults shop on the Internet at least monthly, with 33 percent shopping online every week. OCS operators looking to increase efficiencies and tap into the growth of online shopping may benefit from the addition of an online ordering service.

What is it?

An online ordering service, in its most simplistic form, allows an OCS operator’s customer to log into their personal account on the OCS company’s Website, shop around the catalogue for items available, and place an order for delivery. This system has many benefits, such as eliminating the rolling warehouse, increasing items sold and being convenient for the customer.

According to data presented at the 2015 NAMA CoffeeTea&Water event, less than half of OCS operators have a well-developed online ordering capability. Many are quite successful without it, but for those OCS operators looking to create efficiencies, having an online ordering component is a must, said Ken Shea, president of Ken Shea & Associates. “Most operators agree that the number one factor in their ability to compete is great service,” said Shea. “Having said that, not having online ordering or complete Internet Coffee Service (ICS) capabilities does leave the operator more greatly exposed to those that do have it.”

For Joel Sather, president of Madison, WI-based Capital Coffee, an online ordering service has been wildly beneficial. Capital Coffee customers get automatic reminders when it’s time to re-order product and if they forget, another email is generated until the order is placed. Before the online ordering service, Capital Coffee route drivers would deliver the same product the customer ordered on the last invoice. Now, customers have the ability to change product selection to include different flavors, extra coffee or allied products, too. “The customer buys more when they online order because they see that we sell soda, seasonal coffees and creamers and so the overall sales go up,” said Sather. “Plus, if a client is having a big meeting or party coming up, they will order extra product to fit their needs.” After 10 years with online ordering, Capital Coffee receives 65 percent of its orders online.

“There is no negative to offering the service,” he said, discounting the online ordering service fee. “The fee can be covered in one order, so even that isn’t a negative,” he said. Security isn’t a concern for Sather, either as no money transaction takes place online; instead Sather invoices the customer who then pays at delivery.

“If you don’t have an online ordering feature, you’re missing the boat,” Sather warned. “But, if you aren’t committed 100 percent to an online ordering service, it might not be successful either,” he concluded.