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Dive Brief:
- Toast has updated its pricing model to add a 99-cent fee paid by guests on orders of $10 or higher placed through Toast’s online ordering channels, the company wrote in an email to Restaurant Dive.
- This change will help fund the company’s product investment and innovations for restaurants to “maintain the direct relationships with their guests,” including the next generation of Toast’s online ordering suite, according to the company.
- In March, Toast said it saw a 13% average increase in the percentage of guests placing online orders at restaurants using its updated platform with the new processing fee, so the extra charge hasn’t hurt consumer demand. This data is based on conversion rates for roughly 450 U.S. Toast partners.
Dive Insight:
This appears to be the first time a major platform is using an extra fee to help with product innovation. Toast’s online ordering product is “sleeker and designed to help increase sales,” and the company said it remains committed to providing restaurants with commission-free digital ordering channels.
The company said its newest online ordering features includes search engine-optimized menus, customization opportunities and chargeback coverage to its online ordering products. It’s also integrated with Order with Google to increase restaurants’ access to millions of guests ordering food through Google Search and Maps.
“We believe we are continuing to level the playing field for restaurants. … We’re more focused than ever on improving the digital ordering experience — from the way guests engage with restaurants to how orders fire in the kitchen — and to making sure everything works together,” Toast said in an emailed statement. “This approach continues to provide affordable digital ordering technology that helps restaurants compete with large global brands.”
In addition to enhancing its online ordering tools, Toast has been rolling out new products. Toast recently expanded its relationship with Google to allow customers to search and book reservations via a restaurant’s Google Business Profile. Earlier this year, it launched a reservation and waitlist product, Toast Tables, that provides real-time table updates, automatically syncs with server rosters and offers personalized guest profiles.
This product has already garnered significant usage. In March, Toast Tables was used for over 450,000 bookings, Toast CEO Chris Comparato said during the company’s May earnings call. Since going beta a year ago, the product was in use at thousands of restaurant locations as of the end of the first quarter.
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