Internet - Profiles of Successful Internet Businesses
A New Take on Takeout: Cybermeals

A New Take on Takeout: Cybermeals

California entrepreneur Tim Glass was watching the movie The Net one day and when the Sandra Bullock character surfed her way to a pizza Web site, Glass was struck by this “brilliant idea for online commerce.” The only problem was that Hollywood’s idea of virtual takeout was ahead of the actual technology. Nevertheless, Glass recognized an untapped niche and rallied support from technology pros and private investors to develop a dependable, customer-friendly online ordering service.

Within months Glass was joined by some of the best minds in the computer business, including his cofounders Bryan Cupps and Ford Smith. Thus, Cyberslice.com, a pizza delivery service, was launched in December 1996. A total of 1,200 restaurants in Boston, New York, San Francisco, and Seattle signed up as participants. Seven months after Cyberslice was launched, the three entrepreneurs expanded the idea to Cybermeals.com, a multicuisine, multimenu restaurant delivery service for thirty metropolitan areas including Chicago, Los Angeles, Dallas, Minneapolis, Atlanta, and Houston. An estimated 25,000 restaurants were expected to join by the end of 1998, making it the largest online restaurant ordering service on the Internet. Cybermeals is well on its way to having restaurants in every major metropolitan area in the United States. (A click onto cyberslice.com will bring customers to the cybermeals site.)

There are other such delivery services online, such as WaitersonWheels.com, but none are as extensive and well financed as Cybermeals. Waiters on Wheels operates only on the West Coast and has a Web site from which customers can select a meal from a restaurant in their area. The customer can order online or call the Waiters on Wheels office. The meal will be delivered to the customer, but the cost of delivery, about $6, is paid by the customer when the meal is delivered.

Cybermeals is a more comprehensive service. Diners all over the country can order everything from Italian to Vietnamese meals without ever leaving their computers. Key to the success of Cyberslice and Cybermeals is a continued focus on convenience to both consumers and participating restaurants. The Web site has been designed to reflect consumers preferences and ordering patterns, while restaurants are being given solid support on everything from training their employees to promoting their Cybermeals Web pages.

In 1997 Americans spent over $207 billion on meals prepared by restaurants according to Technomics 1997. This was the first time in history that United States restaurants sold more meals to be taken out than to be eaten on premise. Takeout and delivery accounted for 51 percent of all restaurant transactions in 1997, according to the NPD Group. A survey by USA Today that same year revealed that 60 percent of Internet users are willing to order meals online.

Studies show that Internet users are 22 percent more likely to order takeout/delivery meals than the average adult. And looking at it another way, 83 percent of all adult Internet users are takeout/delivery customers. Business analysts believe the restaurant delivery businesses has until been largely ignored. This valuable segment of industry can, through the Internet, begin to move forward.

Cybermeals is a free service for Internet users, and a way for restaurants to make money they would not otherwise make. First, the customer types in some basic information to see a list of the restaurants in his or her neighborhood. Then, there is a choice of cuisine types and a selection of price ranges. After choosing a particular restaurant, the menu appears on screen and the order can be placed. Cybermeals processes the order and sends it in to the restaurant. Once the order is placed, Cybermeals sends the customer an e-mail verifying the order and delivery time. The customer can then go pick up the order or sit back and wait for the restaurant to deliver it.

Customers can order meals up to ninety days in advance. They can also save their favorite orders online so they can order even more quickly in the future. If for any reason an order cannot be filled, Cybermeals’ twenty-four-hour customer service center will phone the consumer immediately and suggest another restaurant.

Once a restaurant registers with Cybermeals and links to their Web site, it pays Cybermeals 10 percent for each order that comes through. For Cybermeals, this translates into five to sixty cents per order—piling up twenty-four hours a day seven days a week. The Cybermeals system automatically tracks all orders received through the site, calculates the commissions due, and sends a quarterly check to each restaurant. Restaurants do not need a computer or access to the Internet to participate with Cybermeals. Instead, computer orders are converted to fax (which includes maps and driving directions) or a digitally synthesized “voice” that phones in the order.

Cybermeals and Cyberslice uses an immense database and geopositioning software to match local patrons across the country with restaurants and restaurant delivery services in their own neighborhoods. Cybermeals restaurants are mapped by longitude and latitude and are geocoded using proprietary software—NeXT’s WebObjects technology and MapQuest data—as well as information provided by local restaurants.

Cybermeals made exclusive agreements with America Online, Excite, Lycos, and Yahoo to be the aggregator of restaurants offering online ordering for takeout and delivery meals for four years. Each of these providers would receive guaranteed payments totaling $15.5 to $20 million and would participate in Cybermeals revenues.

Through an affiliation with the Restaurant Delivery Services Association, Cybermeals signed up more than thirty members to the Cybermeals marketplace. Combined, the new partners represent more than 2,000 restaurants.

Cybermeals also made an electronic commerce partnership with Papa John’s International, reported to be the fastest growing pizza company in America with more than 1,400 restaurants in 41 states and the District of Columbia. Papa John’s was voted Best Pizza in more than fifty markets, and in 1997 they unseated Pizza Hut as Best Pizza Chain in the Restaurants & Institutions seventeenth annual Choice in Chains consumer survey.

Papa John’s is the first major restaurant chain to utilize Cybermeals technology to localize the World Wide Web for the takeout and delivery needs of its customers. In addition, Papa John’s will be the exclusive prerelease site for all of Cybermeals new online ordering technology. As part of the agreement, Papa John’s will promote online ordering by including “now order online” with its Web address on all advertising, media, and other in-store material in the test markets.

In exchange for being part of the Cyberslice Web site and service, pizzerias pay an incidental fee to Cyberslice for each order delivered via the Internet. Each restaurant also receives its own personalized Web page with its own Web site address (or URL) and access to thousands of pizza-ordering consumers.

Cyberslice also arranged for an exclusive five year online partnership with the National Association of Pizza Operators (NAPO). With this agreement, NAPO will endorse Cyberslice as the official online ordering and Web site of the NAPO. In exchange for this, Cyberslice will design, copublish, and maintain Web sites for NAPO and its official magazine, Pizza Today, as well as Web sites for The Pizza Yellow Pages, The Pizza Pro Shop, Books and Looks for Cooks, and NAPOs Pizza Expo. Both organizations plan extensive marketing and cross promotional efforts.

Cybermeals plans to expand internationally in 1998. Now, if they could deliver a meal from Tuscany to New York, the Web would really have accomplished something.

* Source The Best Internet Businesses You Can Start
              Lessons from success stories of both
              small and large internet businesses