We're now seeing Olo restaurant customers who are processing 100% of their transaction volume through the Olo platform. This includes takeout orders, delivery orders, marketplace orders and even table-side orders that are typically initiated when the guest sits at a table and scans a unique QR code to identify the table where a server or a runner can deliver the food. Olo's ambition has now grown from digital primacy to digital entirety, from 51% digital to 100% digital. We believe that Olo's destiny is to touch every transaction, add value to every transaction and derive revenue from every transaction in the restaurant industry. - Noah Glass, Olo CEO, Q1 2021 earnings
Noah has made it clear that Olo’s mission is to run every transaction in the restaurant industry. Both online and offline. Olo offers online ordering and is rapidly expanding into QR ordering for table orders. Olo integrates with Brink and 100+ other technology ‘partners’ so restaurants can manage digital orders on one enterprise software solution. Today, Olo is good friends with Brink and other ‘partners’. But if Noah does really want to touch every transaction, the end game is likely direct competition with a cloud-POS like Brink.
We recently interviewed an executive who created the first POS on Windows in the 90’s and has over 30 years experience in restaurant technology. Most recently he ran Xenial, one of Brink’s largest cloud-based competitors in QSR and fast casual. After the recent Punchh and Restaurant Magic acquisitions, he believes it’s inevitable that Olo and Brink compete directly:
I think it’s a matter of time until Brink either acquires or develops their own mobile and online ordering solution. I’d be betting my money that that’s true. There doesn't seem to be a good reason that you wouldn't want to do that. Why wouldn't you compete with Olo? I mean, are you going to win every one of your customers? No, but you have time, you have time to convert them all or at least get a look in for that business as contracts come up in the natural course of events, as contracts come up for renewal.
Brink’s advantage is that the POS is the core mission-critical technology for restaurants today. The POS is the ‘transaction record’. The ‘master data set’ that everything in the restaurant is built on. PAR’s CEO see’s little competition to the POS:
"I don't think any external platform is yet challenging the point of sale. In fact, most of these products run through the point of sale. I expect for almost every enterprise restaurant, every transaction is still running through the point of sale. Very little happens outside the point of sale because it is that transaction record, it is that master data set that every brand builds every data model on top of." - Savneet Singh, PAR CEO
The POS is the only solution that integrates both marketing and operations. On the operational side, the POS takes cash, manages inventory, in-store ordering, and even the accounting and payroll for the restaurant. On the marketing side, the CRM and loyalty system run through the POS. This is also why the Punchh acquisition could be pivotal for PAR. Understanding your customer to build personalised marketing strategies is crucial for retention. Punchh is a prime marketing asset that could’ve sat nicely alongside Olo. Instead, it’s a ‘building block’ offered alongside Brink.
Savneet wants to provide the ‘building blocks’ for customers to build their own digital future. Brink forms the foundational POS layer that restaurants can build on with PAR-owned solutions like Punchh or Restaurant Magic or other 3P-integrated products as they wish. However, is there a restaurant today that isn’t offering delivery and online ordering? After the pandemic, all customers are likely asking their POS provider to integrate with Olo to drive online orders. Olo’s despatch product also gives power back to the restaurant from the delivery players. After the last 18 months, Olo is a restaurant’s best friend.
This document may not be reproduced, distributed, or transmitted in any form or by any means including resale of any part, unauthorised distribution to a third party or other electronic methods, without the prior written permission of IP 1 Ltd.
IP 1 Ltd, trading as In Practise (herein referred to as "IP") is a company registered in England and Wales and is not a registered investment advisor or broker-dealer, and is not licensed nor qualified to provide investment advice.
In Practise reserves all copyright, intellectual and other property rights in the Content. The information published in this transcript (“Content”) is for information purposes only and should not be used as the sole basis for making any investment decision. Information provided by IP is to be used as an educational tool and nothing in this Content shall be construed as an offer, recommendation or solicitation regarding any financial product, service or management of investments or securities.
© 2023 IP 1 Ltd. All rights reserved.
Subscribe to access hundreds of interviews and primary research