Wednesday, May 18, 2005
[rest] Web Reservation Systems for Restaurants
Here is a good article in the Boston Globe about the impact on restaurants of using online reservation systems. Since Boston.com links have a limited shelf-life (and they now require registration), I'll summarize below.
The article primarily features OpenTable.com, one of the leaders in the space. As you might imagine, a computerized reservation system gives you information benefits (e.g., you know when your regular customers are coming in, you remember food allergies and other preferences). It works well, and about 30% of reservations come in when restaurants are closed, so the restaurant is providing value to the diner by offering this. OpenTable charges a monthly service fee, plus $1 per online reservation.
However, more significant is the way restaurant owners are using it as a form of marketing to manage demand, since they can choose which time slots and which tables are listed on OpenTable. Any top restaurant can sell out Saturday night, but why not list "Tuesday night @ 6pm" and see if OpenTable can sell it for you?
TAKEAWAY: Electronic advertising media, with their immediate effectiveness, will increasingly be used by businesses for dynamic demand management. Based on the specifics of YOUR business, you can alter your spending.
Anything can be a significant variable in your calculation. Nearby construction scaring people away from your restaurant this month? Boost your AdWords spend. Two servers just quit at lunchtime? Close down a few tables on OpenTable for this evening. You get the idea. All of this will continue to weaken the positioning of traditional media -- newspapers, Yellow Pages, TV -- while providing opportunity for the creation of new electronic ad venues. [For instance, the airlines are excited about travel search engine Kayak.com because now they can market Denver fares only to those looking to go to Denver, and only when they have a glut of seats.]
P.S. OpenTable even buys AdWords to benefit its associated restaurants. Search for [Boston restaurant] or even [Boston steak] and the 1st or 2nd paid results (currently) are links to OpenTable's Boston restaurant landing page. (UPDATED 10/14/05: [Boston restaurant] only shows OpenTable every 5th time or so, and [Boston steak] isn't showing them at all.)
The article primarily features OpenTable.com, one of the leaders in the space. As you might imagine, a computerized reservation system gives you information benefits (e.g., you know when your regular customers are coming in, you remember food allergies and other preferences). It works well, and about 30% of reservations come in when restaurants are closed, so the restaurant is providing value to the diner by offering this. OpenTable charges a monthly service fee, plus $1 per online reservation.
However, more significant is the way restaurant owners are using it as a form of marketing to manage demand, since they can choose which time slots and which tables are listed on OpenTable. Any top restaurant can sell out Saturday night, but why not list "Tuesday night @ 6pm" and see if OpenTable can sell it for you?
TAKEAWAY: Electronic advertising media, with their immediate effectiveness, will increasingly be used by businesses for dynamic demand management. Based on the specifics of YOUR business, you can alter your spending.
Anything can be a significant variable in your calculation. Nearby construction scaring people away from your restaurant this month? Boost your AdWords spend. Two servers just quit at lunchtime? Close down a few tables on OpenTable for this evening. You get the idea. All of this will continue to weaken the positioning of traditional media -- newspapers, Yellow Pages, TV -- while providing opportunity for the creation of new electronic ad venues. [For instance, the airlines are excited about travel search engine Kayak.com because now they can market Denver fares only to those looking to go to Denver, and only when they have a glut of seats.]
P.S. OpenTable even buys AdWords to benefit its associated restaurants. Search for [Boston restaurant] or even [Boston steak] and the 1st or 2nd paid results (currently) are links to OpenTable's Boston restaurant landing page. (UPDATED 10/14/05: [Boston restaurant] only shows OpenTable every 5th time or so, and [Boston steak] isn't showing them at all.)
Site Feed
