The concept of “owning” restaurant customers has significantly changed in recent years. From third-party booking platforms to delivery services, the control over customer relationships has shifted away from restaurants. The latest development in this evolving landscape is Toast’s decision to introduce a 99-cent fee for online orders over $10. This move has sparked discussions and concerns among restaurant owners about the impact on customer perception and competitive advantage.
The Impact on Restaurant Owners
- Consumer Perception: Customers are becoming increasingly sensitive to additional fees, which may lead to negative perceptions of the restaurant. If not communicated effectively, the fee could be seen as an unnecessary surcharge, potentially driving customers away and affecting the overall customer experience.
- Competitive Disadvantage: In an industry where competition is fierce, any additional cost can put a restaurant at a disadvantage. With comparable POS systems not adding this surcharge, it will make orders purchased through Toast relatively more expensive.
Broader Implications
- Evolving Business Models: The introduction of fees reflects the ongoing evolution of business models in the restaurant industry. As online ordering grows, POS providers and restaurant owners must find mutually beneficial ways to navigate the changing landscape while maintaining profitability.
- Balancing Costs and Customer Experience: POS providers should balance revenue generation and preserving a positive customer experience. Offering value-added services and enhancing the online ordering experience can help mitigate negative perceptions associated with added fees.
- Junk Fee Protection Act: Recently proposed by Joe Biden’s administration, this proposal could pressure the additional fee imposed by Toast. The legislation aims to protect consumers from hidden or excessive charges, including those related to online orders.
The decision to introduce additional fees for online orders has sparked discussions within the restaurant industry. While such fees are intended to offset costs and improve services, they pose challenges for restaurant owners. They could shift how restaurant technology companies price their services and view a partner restaurant’s customers.
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Acutely is a leading brand in data-driven restaurant solutions, offering innovative tools and expertise. Their services include loyalty program management, data analytics, customer insights, and marketing optimization. By leveraging data, Acutely helps restaurants understand customer preferences, track marketing effectiveness, and personalize the dining experience.
