Solving the online delivery dilemma — with a side of matzo ball soup

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There’s one vexing problem that every restaurant linked to online ordering shares: how to make sense of so many online ordering platforms. There’s GrubHub, DoorDash and, of course, Uber Eats, not to mention localized delivery services. Some restaurants receive orders from more than a dozen different ordering platforms at once — requiring Houdini-like magic to keep the online delivery orders straight.

Few restaurants better understand this shared headache than Canter’s Deli, the Los Angeles institution that’s been feeding the hunger pangs of Los Angelenos around the clock for 87 years. Alex Canter, the deli’s fourth-generation owner-operator, has taken an entrepreneurial crack at fixing the problem not only for Canter’s, but for the entire restaurant industry.

Canter is co-founder and CEO of Ordermark, which is working to bring order to the orderless. Ordermark’s technology funnels different online food orders into a unified system that simplifies order fulfillment. It hopes to expand nationally by using its unique dashboard to standardize all incoming orders into a single language and printer. Canter explained how it works — and where it’s going — in an interview with STORES contributing writer Bruce Horovitz.

Technology seems to be taking over the world of retailing. Is this a good thing?

I’d argue we’re entering the ecommerce phase of the restaurant industry. All these bricks-and-mortar restaurants are now entering the digital world for the first time. Restaurants can no longer rely on foot traffic to generate enough business inside their four walls. Now we need to reach out to customers through digital options. Online ordering is a great way to increase sales. Foot traffic for the industry is down a couple of points, but online ordering is up 20 percent this year.

Is this a generational thing?

There’s a lot of data showing that people are replacing cooking at home with ordering out from restaurants. It’s a great opportunity for restaurants to take advantage of this shift. It’s not just millennials. Online ordering is creeping into the older generation — my grandpa orders every day from DoorDash.

How does a 25-year-old go from helping run Canter’s to becoming CEO of a high-tech online ordering congregator?

Working at Canter’s since I was a kid gave me a special perspective on the restaurant industry. Canter’s is arguably one of the highest-volume restaurants in L.A., with seating for over 500 people. On many Sunday brunches, we’re filled to capacity, with lines out the door. We have 180 employees. I got to dive into the business at a very young age, and I quickly recognized not just a problem happening in the industry, but an opportunity from which many other restaurants could benefit.

The early years of online ordering don’t paint such a pretty picture. Was Canter’s drowning in too much tech confusion?

When we first started doing online ordering, there was no anticipation how disruptive it would be to operate. At one point, we had nine tablets, two laptops and one fax machine all taking online orders. With online ordering doubling every year, we figured there had to be a better way for restaurants to handle full online ordering.

This resulted in Ordermark’s creation?

Yes. In January 2017, I assembled a team trying to make this a better experience for employees and employers. We spent months putting this together and standardizing the data. We finally got to a point where we partnered with Epson, the computer printer specialist. We took this problem and tried to make the solution something that every restaurant could use. We’re working to prepare restaurants for the next generation of the restaurant industry.

How does the system work?

Every online ordering app has different ways of sending orders to restaurants. We’re able to take all the different formats and standardize it into a language that restaurant operators can understand. We simplify all the incoming information so the restaurant understands what it needs to make and when it needs to be ready.

How did you evolve from trying to fix Canter’s biggest problem to trying to fix the industry’s biggest problem?

I’ve always been interested in entrepreneurship and working in tech. I’d worked for a couple of startups prior to this. I like taking ideas and bringing them into reality. I realized every other restaurant owner was experiencing the same issues we were. The opportunity here went well beyond running family restaurants, and I wanted to create a technology that every restaurant owner could embrace.

So, Ordermark is really an aggregator — kind of like Priceline?

We’re not a consumer-facing product. We’re not a competitor for the online ordering companies. We aggregate for restaurants. We’re saying there are many great online ordering options, and we make it easy for restaurants to say yes to all of them.

How can a restaurant best decide which online ordering company to use?

The number one factor is location. In New York City, for example, Seamless is very popular. But in San Francisco, it might be DoorDash or Postmates. The physical location of the restaurant determines which online service is best. That is why some larger chains have trouble maximizing their online potential, because different delivery options are popular in different areas of the country.

How many online delivery services can Ordermark unify at a single location?

Well, there are about 180 relevant online ordering platforms in the United States right now. Many are location-specific. If you’re a restaurant in Boulder, Colo., and you’re not signed on with HungryBuffs, you’ll miss a lot of orders. For some restaurants, we have aggregated as many as 12 delivery services. In most major cities, there are only a handful of online services that handle 80 to 90 percent of the market share. But keep in mind, if you’re not linked with a service like delivery.com, you don’t even exist to all of its regular customers.

How did Canter’s make the change to online delivery?

Ten years ago, we had none. All our business was within our four walls. Four years ago, we started with GrubHub, then we added DoorDash, Uber Eats and Amazon. We’ve built our online business to the point where it’s now 30 percent of our overall business.

What’s the benefit of online sales?

The average size of an online order is larger than one that’s in-house. Online ordering lends itself to up-selling things like appetizers. I look at it as incremental revenue. Our lights are already on. Our staff is already there. The rent is the same. No one is taking up a parking spot when they order online. No one is taking the time or your waiter or busboys. There are no dishes to clean and no refills on drinks.

There are big cost savings with online ordering. It’s not just a necessary evil. It’s an opportunity. You get to plug into revenue streams that expose you directly to new customers.

How much online ordering is too much for a restaurant?

There are many restaurants whose online orders surpass their in-store orders. It’s more than 50 percent of the revenue at some restaurants.

Why not just go 100 percent online?

We are seeing some restaurants that are opening with virtual kitchens, where there is no front-of-the-house dining experience. Some are opening commissary kitchens that act as fulfillment for third-party delivery services. We opened a Canter’s in this format in downtown Los Angeles and more recently opened a second one in Pasadena to extend delivery to the East Side of Los Angeles.

You can’t sit down and dine, but if you live within three miles of the locations, you can order matzo ball soup for delivery. I’d say it’s a great way for a brand to extend its reach. Instead of spending millions of dollars to open in Pasadena, we opened a virtual kitchen there.

Does Canter’s plan to open more virtual kitchens?

Yes. We are looking to expand this model. It makes a lot of sense. If you eliminate the front of the house, you are reducing your costs substantially. You don’t have the overhead you normally would have.

Was there pushback before Canter’s started taking online orders?

The recession hit in 2008, which was very challenging for Canter’s and for the restaurant industry. That forced us to begin to figure out new ways to reach customers. Everyone in the family was more open-minded than they might normally be. Even my dad was a huge proponent of ordering online.

What happens to Ordermark when online delivery companies consolidate?

There are still many strong, local players. Many are expanding quickly. I certainly don’t see the market ever consolidating to one. It’s not that challenging to start an online ordering platform. Some are truly innovating. There’s one called Slice, for example, which is focused on delivery pizza. There’s another called Caviar that serves higher-end restaurants. We’ll see more online ordering companies that specialize.

What are Ordermark’s growth plans?

We’re growing fast. We now have 30 people in our Santa Monica headquarters. We’re operational in 25 states right now. We’re working with several hundred unique brands, including Sonic, TGI Friday’s and Johnny Rockets.

As the owner’s son, how were you treated by employees all the years you spent growing up at Canter’s?

It was understood by everyone that I’d come into the family business. The staff used to jokingly call me “Mini-Patron” — which means Mini-Boss. It was always a given that I’d be the next in line. I wanted to create a larger footprint and do as much as I can for the restaurant industry.

What’s it like working with family 24/7?

It’s tough. When you’re working with family, you go home and you’re still eating dinner with the people you work with. Business is always a part of every conversation. At every family outing, we’re talking about our employees or new ideas for the restaurant. There’s so much overlap and it’s hard to separate family time and business time.

If you were stuck on a desert island and could only take one Canter’s menu item with you, what would it be?

Matzo ball soup.

What’s your advice to restaurant owners who are hesitant to dive into online ordering and delivery services?

Adapt or die. A lot of restaurants will get left behind.

Bruce Horovitz, a freelance writer, is a former USA Today marketing reporter and Los Angeles Times marketing columnist. He can be reached at brucehorovitz@gmail.com.

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