In October, Olo held its inaugural Partner Summit in Chicago—something its network of more than 400 partners had been clamoring for.
At this event, the tech company reaffirmed its commitment to being an open platform. This belief was forged in Olo’s earliest days of trying to play with other tech providers in the space. CEO and founder Noah Glass remembers completing the first POS integrations in 2009 and 2010—or at least attempting to. It wasn’t an easy task.
“The POS platforms were just arms crossed, ‘You’re not going to get to plug into us or we’re going to make it really hard,'” Glass recalls. “And it took restaurant customers basically forcing their hand and saying, ‘If you won’t let us plug in, then we’re not going to be able to work with you going forward,’ for us to finally get through that resistance and be able to integrate. And so that made us believe that was a bad way of doing things and that we wanted to be an open platform for the benefit of our restaurant customers to use different technologies that were things that we didn’t ourselves do, but that we could help them to do by being an open platform.”
The phrase frequently mentioned at the summit was “unified guest profile.” It’s the idea that Olo has numerous data points to generate about the guest based on their ordering activity. And there are a lot of other activities Olo can pull from to help brands better understand their customers, like how they’ve used the loyalty program, whether they’ve logged into the WiFi, and if they’ve opened an email or clicked on a link in an email.
“All of these are different interactions that we can pull together—from experiences that are part of Olo and experiences that are part of our partner network—into a unified guest profile,” Glass says. “And all of that with the goal of the brand really understanding who that guest is so that they can personalize that guest experience and get to a future in which they’re gauging the experience based on that unified guest profile and all they know about you.”
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Olo also continues to warn against restaurants building their own online ordering platforms. Glass says individual brands could spend tens of millions upfront to build it one time and then face ongoing charges of tens of millions on an annual basis for support, security, reliability, and modernization. He estimates that it’s 10 times more expensive to build one instead of buying into Olo and building on top of that. The company invests $90 million into research and development every year and that’s for 85,000 locations and 700 restaurants.
“That’s a big investment and most brands can’t even contemplate that,” Glass says. “But even if you can contemplate it, you probably shouldn’t for long because it’s so much more efficient to do it through a platform that has all the investment that we put into Olo every year. I think there’s a big economies of scale argument for why it’s so much less expensive.”
There’s also the benefit of innovation. Glass uses the example of Borderless, in which guests have a password-less online ordering account for all restaurant chains using the feature. Last year, a million customers used this. Now there are 10 million-plus Borderless guests. Research shows Borderless customers complete purchases 7.5 percent more often than guests having to remember a password. Their frequency is also 25 percent higher.
“What’s really powerful about that is the restaurant brand gets that unified guest profile inclusive of what we’re able to pull over from an experience that the guests had at other restaurants,” Glass says. “So if you have a card on file, I don’t have to ask you to re-enter your credit card. It’s following you over on that Borderless account. And that is something that is only possible because of Olo being a platform supporting many restaurants. An individual brand could never build that. It has to be because of the structure of Olo as a two-sided network between 85 million guests on one side and 85,000 restaurants on the other that we’re able to do something innovative like this that benefits the guest experience because it removes friction and it benefits the restaurant because they’re getting more data.”
Five brands are also piloting Olo Pay being available on in-store POS systems, meaning Olo will have access to traditional transactions inside the restaurant in addition to all of the online orders. “What’s most important is this unified guest profile and building up a rich understanding of who that guest is. And being able to pull every transaction—digital and nondigital—into that profile is a huge unlock,” Glass says. “And so it’s fun for us to see customers that were using Olo pay for card not present—which is true of all five of these customers—say this has been working so well for my digital experience, I’m now going to move this into the non-digital experience of in-restaurant transactions.”
Restaurants continue to buy into Olo’s pitch. The company is bolstering new and existing partnerships with large and small chains across the industry, including Dutch Bros, Long John Silver’s, Another Broken Egg, P.F. Chang’s, Pizza Inn, Bojangles, and Mendocino Farms.
Olo predicted it would add 5,000 locations in fiscal 2024, and it surpassed that total through three quarters. The company added 1,000 locations in the first and second quarters and then tacked on 3,000 in the third quarter—its largest quarter of location adds in two years. Olo is now targeting 6,000 locations for the year.
Total revenue increased 24 percent year-over-year to $71.9 million. Gross profit grew 13 percent year-over-year to $39 million.
