Denny’s calls itself America’s diner, a description that evokes coffee, club sandwiches, and pies, as well as late-night restaurant hours and bar stools. But now, Denny’s says it wants to take the diner experience to your doorstep.
On Tuesday, Denny’s (DENN, -0.41%) is announcing it will embrace digital ordering with a new mobile and online ordering system that will allow customers to place an order for takeout or delivery. The diner will also add a new online ordering function through Twitter (TWTR, -0.22%) and will allow fans on Facebook (FB, -0.01%) to place an order via a Chatbot.
“For over 64 years now, we have been the brand that has offered their guest whatever they want, whenever they want it 24-hours per day,” said Chief Marketing Officer John Dillon told Fortune during an interview. “We can now add ‘where you are’ to the brand’s promise.”
Denny’s, which books about $500 million in operating revenue across the company’s 1,700 locations globally, is joining a growing crowd of national restaurant chains that are embracing digital ordering at a time when customers want to increasingly use their phones or computers to place food orders. Digital ordering has tripled over the past five years, now representing 6.6% of all restaurant transaction, according to research firm NPD Group. That surpasses phone ordering at 5%.
“Guest needs are changing,” said Dillon. “Retails is having to adapt to the changing consumer needs. We will continue to drive traffic into our restaurants, but we are expanding our footprint by going after the guest who wants food outside the restaurant.” Industrywide traffic stalled in 2016 and it is expected to remain just as muted this year. But the use of mobile apps, text messages and other digital ordering methods from a restaurant grew by 18% last year and now accounts for 1.9 billion foodservice visits.
Most observers say that two chains are far ahead of the field on digital ordering: Starbucks (SBUX, -0.23%) and Domino’s Pizza (DPZ, -0.17%). The former is known for mobile order and pickup and an app-based loyalty program that has lured millions, while the latter has a popular pizza tracker so a customer can see their order as it is processed from the kitchen to the doorstep. Red Robin Gourmet Burgers (RRGB, -1.49%), DineEquity’s (DIN, -1.61%) Applebee’s and Brinker’s (EAT, 0.00%) Chili’s have also embraced the trend.
Like many casual-dining focused chains, Denny’s says it is partnering with mobile ordering startup Olo for “Denny’s on Demand” to ensure the technology technology runs seamlessly with their physical restaurants. Customers can book orders through the brand’s newly revamped mobile app and also pay for orders via smartphones or tablets. There’s also desktop functionality at Dennys.com, allowing customers to choose their pickup or delivery time, track their order, and view their order history.
The delivery component will be available at about half of the domestic restaurant fleet, relying on meal delivery services like Postmates and Uber Rush. As those service providers grow, Denny’s says the chain’s delivery footprint will grow with them.
Delivery isn’t the only new challenge that chains like Denny’s must confront as they embrace digital ordering. There are also technological challenges of adding the flow of orders from digital channels (including orders that are timed far in advance) with orders that are booked in the restaurant for in-person guests. Packaging presents another conundrum. Pizza has been delivered for decades and coffee has no problems staying hot for a few minutes for a grab-and-go order at Starbucks.
Denny’s spent nearly two years perfecting packaging for the company’s takeout and delivery initiatives. Courtesy of Denny’s But for chains like Denny’s, with far more complex menus than a pizza chain, delivery packaging isn’t as easy. Dillon said Denny’s spent almost two years on developing packaging that would work for the company’s diverse menu that includes eggs, burgers, waffles and grilled cheese sandwiches. For example, Denny’s created a package format that would add plated layers to separate pancakes from eggs and bacon. It also had to create ventilation to ensure food stayed fresh.
To promote the digital ordering initiative, Dillon says Denny’s is planning an ad campaign that will broadcast on television and appear in digital and social channels. The glowing yellow diner booth plays a big staring role in the advertisements, showing up next to a pool and alongside a group of motorcycle bikers.
“The booth is an iconic figure for us and an important part of our brand,” said Dillon, explaining the appearance of the booth in the ad will signal to viewers that they can get that diner experienced delivered anywhere.
by John Kell
