A Win for Wireless?

Apple, Inc. hints at a possible move into wireless ordering, and quick-serves could benefit.

Consumer electronics and software giant Apple, Inc. made waves last month when the company filed an application with the U.S. Patent Office for a wireless ordering system, and quick-serves should be paying attention.

In U.S. Patent Application #20070291710, Apple describes technology that would allow consumers to use a wireless device, such as a phone or media player, to remotely order merchandise from a participating merchant. In and of itself, that's nothing new. A number of text and mobile ordering companies have been around since at least 2006, and chains like Papa John's, Pizza Hut, Quiznos, Dunkin' Donuts, and Subway are already utilizing the technology to some extent. But what Apple proposes to do could take the concept a step further by addressing a primary weakness of current systems.

“Apple has a way of taking technology that's been around a long time and presenting it in a new way,” says Ken German, a senior editor with technology web site CNET.

And as described in the patent application, that's just what Apple is proposing to do.
“In order to initiate such a remote transaction [as with current methods of text and mobile ordering] using a cell phone, a user must be aware that a merchant of interest is nearby …,” the application states. And that's precisely the variable Apple's proposed system would address, by placing wireless communication devices inside establishments, so when a consumer with an enabled phone or other device is within range, their options for purchase appear. After selecting an item, users would then receive a notification when their order is ready, so they could pick up the item without waiting in line.

Apple already has a relationship with Starbucks, allowing users of the company's online music store, iTunes, to wirelessly download songs playing inside cafes with the push of a button, and that has led to speculation that the coffee giant could be the first to utilize the new ordering technology if or when it becomes a reality. For its part, however, Starbucks is staying mum.
“We have made no announcement beyond the partnership we currently have with Apple and iTunes,” says Starbucks spokeswoman Bridget Baker. “However, we are committed to continuing to innovate on behalf of our customers. As consumer acceptance of Wi-Fi connectivity and innovation grows, we’ll continue to explore a variety of options and will make decisions based on what we believe will be the best customer experience.”

Noah Glass, CEO and founder of GoMobo, a current provider of mobile and text ordering for restaurants, says Apple's entrance into the market could be the push the technology needs to reach ubiquity.

“I think it's a big validator of the concept we've been doing in the marketplace for over two years,” he says.

Apple doesn't do things half-heartedly. They're not going to do something just because it's trendy.”

German agrees.

“Typically, Apple doesn't do things half-heartedly,” he says. “They're not going to do something just because it's trendy.”

And wireless ordering is catching on, albeit slowly. GoMobo currently provides text and mobile ordering capabilities to around 200 restaurants in New York City and 10 other areas, including Philadelphia, Chicago, San Diego, San Francisco, and Seattle. Customers love the convenience of being able to avoid the lines, Glass says.

“They're coming back more and more with the service,” he says. “Those who are using this at four or more restaurants are using it incredibly frequently.”

Restaurants, especially quick-serves, are also reaping the rewards. Glass says some locations report sales volumes of $3,000 or more a month through the service, and mobile and text orders on average are 24 percent larger than those placed at a traditional point-of-sale system.
“It's like how using a credit card you spend more than you would with cash,” he says. “This is even more abstract. When you're just hitting buttons and food appears, it doesn’t feel like you're spending a lot of money right now.

Speed of service and order accuracy also improve with use of the service, as crew members can focus more on filling rather than taking orders—kind of like if customers were ordering from a kiosk. The difference, Glass says, is that the upfront costs aren't nearly so high.

“It's much easier to use the equipment already in customers' pockets,” he says.

If Apple does get into the wireless ordering game, CNET's German says the system will probably only work with the company's own products—iPods, iPhones, or other devices yet to be released—limiting the number of consumers who could take advantage. GoMobo and other companies, however, target all phones with web or texting capabilities.

In any case, it could be a while before we find out how this scenario will play out, German says, and there likely won't be any warning, as Apple is famous for springing its new developments on an eager populace without much advance notice.