Online Reservations through your phone?

Urbanspoon is launching a new restaurant reservation system that they are billing as the future of online reservations.  The pilot is here in Seattle and has already garnered 65+ participating restaurants (for your reference, the dominant player, opentable has around 100).  This is for real-time day-of reservations only according to the company and there seems to be quite a few synergies between what Urbanspoon is already doing to point diners in the direction of a restaurant and helping diners book last minute.  I have some ideas for improve UE on the mobile side and do feel that they’ll need to gain critical mass quickly to have an impact (and before Opentable starts slashing prices to cut them out of the market). 

Check out www.urbasnspoon.com to learn more (see the rez button on the right side of the homepage). 

I recently did a little analysis of the product:

Urbanspoon Launches Mobile Rez Button to Compete with Opentable:  Hoping to Deliver Reservations in a Down Economy

Urbanspoon has recently been adding functionality to its popular mobile dining application including a restaurant reservation “button” called rez.  It is hoping that this platform will be to mobile phones what Opentable’s popular online reservation system is to the web.  Urbanspoon is an online and mobile guide to dining that helps potential diners make informed decisions about restaurants through information and user reviews from dining websites, influential food bloggers, professional critics, and users.  The dining guide was originally available on Apple’s itunes for the iphone, and garnered a lot of attention and eyeballs for developing “shake” functionality for finding restaurants.  More recently, Urbanspoon has launched a successful application for the Blackberry.  Within the past 6 months it has been piloting this real-time reservation application as an add-on to their existing services.  

What does rez do?  Rez is a button incorporated into Urbanspoon’s website, mobile application, and the participating restaurants websites that allows consumers to look for same day reservations.  The participating restaurants use their own iphone or ipod touch to registers these reservations made.    Users may lock one, some, or all of the 3 slot machine categories of the popular iphone interface to drill down searches to specific neighborhoods, cuisine type, and price.   Recently Urbanspoon has made it possible to lock rez as well. 

Urbanspoon’s mobile endeavors have enjoyed very favorable reviews amongst foodies and users (giving influential bloggers a large share of voice probably doesn’t hurt) for the architecture of its application and the overall user experience.  It must differentiate itself from the dominant online dining reservation market leader, Opentable.  It has done this to a certain extent by giving a more complete review picture (users, super users, tastemakers, and professional critics) than any other previous online or mobile guide.   Rez is available as an add-on to Urbanspoon’s existing iphone and blackberry applications.  There is no way to have the application without rez, and it appears on both the homepage of Urbanspoon.com and on the individual restaurant’s page on the mobile app.  Users can see what times and restaurants are available for same-day reservations only, and can choose a reservation very easily.  You must be a registered user, but the reservation is relayed to the restaurant as quickly as the mobile signal or wifi can deliver it.

Urbanspoon is the application developer, and IAC’s sister company, Citysearch, will provide the billing functionality.  AT&T is the carrier for apple’s iphone, and many different carriers provide service for the Blackberry.   I have used it to make a reservation and it was seamless and provided immediate gratification.  This does not discount the lack of variety (especially if you look for a reservation on a Monday when many participating restaurants are closed). 

Who uses rez?  In theory, the target user for rez is anyone looking for a reservation today.  In actuality, the pilot program running right now in Seattle has a limited scope for restaurant-goers, with a total of 65 participating restaurants.  The strategy appears to be bringing in high-status restaurants, those that have 80% favorability rating or higher on Urbanspoon.  This is a tried and true marketing technique, but not as effective for an expanding user base who demand more options.  Urbanspoon is the 2nd ranked application in the travel section of itunes (apple), and one of the most accessed mobile apps on Blackberry’s storefront.  Rez displays available reservations from participating restaurants in a highly visible section of the Urbanspoon homepage as well as through existing partner dining websites such as Citysearch and SeattleWeekly.com (Village Voice Media).  The greatest exposure; as measured by reservations made through rez, have actually come through the participating restaurants websites themselves.  This prominent display on the restaurants site is mandated by the Urbanspoon as requirement for participation.  As stated, this is a pilot program happening in Seattle, and once it is rolled out to the other major markets, Urbanspoon and IAC will most likely put more marketing dollars behind it.   

What are they saying about it?  Rez has been released to limited traditional media attention, mostly because it is only currently available to the Seattle market.  IAC will be making a major push in the next 6 months to get restaurants to register for rez in other markets where Urbanspoon has built an audience.  Once this has occurred, rez will be more newsworthy.  What will likely be the most newsworthy piece of rez is the “line in the sand” Urbanspoon is effectively drawing between it and Opentable.  Opentable has the lion’s share of the online reservation market, as well as the 5th ranked travel app on itunes.    Rez has been in existence for less than 6 months and has signed up 65 restaurants whereas Opentable has around 100 Seattle in many years.  This illustrates the cache Urbanspoon has with restaurateurs and a potential disregard they feel for Opentable.   

Urbanspoon claims its competitive advantage to be that it is more of a marketing channel that can highlight real-time reservation, as opposed to solely a reservation portal.  It claims, users come to Urbanspoon to choose a restaurant – whereas, Opentable only features its participating restaurants.  Opentable’s obvious advantage comes in its claims to over 10,000 participating restaurants and a very well regarded “rewards” program for frequent bookers that gives monetary incentive to users for booking through Opentable. 

The relationship between mobile and non-mobile is very complimentary for the company, and its mobile application is what has paved the way for the success the fledgling company has enjoyed (the fact that apple featured Urbanspoon in one of its first iphone commercials also did not hurt either).  The Urbanspoon mobile application is free to consumers and its current revenue is derived solely from advertising.  The rez functionality of the application will cost the restaurant a monthly fee and a certain price per either cover (diner) or reservation (total diners in the party).  Opentable charges large monthly fees to operate their system, and a price of either $1 per cover booked through Opentable or $.25 per cover for reservations booked through the participating restaurants website.

Does mobile program make sense?  There is no denying that the global economic crisis has lead to a decline in restaurant dining and online reservations, so now might seem an inopportune time to launch a mobile reservation system.  However, Urbanspoon is a small and nimble operation with a proven track record of developing popular applications, as such; I would make the following recommendations.

More mobile!  The offerings of rez versus Opentable do not favor rez (10,000 restaurants v. 65); therefore, rez must differentiate itself by branding itself mobile.  The lion’s share of Opentable’s reservations comes through their site, but more and more diners are using their phones to choose local businesses.  Make the rez button more prominent on the iphone app.  As it stands now, the button is small and there is very little drawing the user to its ability to book a reservation for you tonight. 

More markets, restaurants, and choices – fast!  Restaurants are feeling the pinch, and more and more people are looking for value – which is not synonymous with restaurants that require a reservation.  Rez should open itself up to more niche businesses and times such as Mexican food restaurants and Happy Hours for larger groups.  They could integrate programs that get users to think of reservations for more non-traditional places and times, thereby creating another market for mobile restaurant reservations.  Also, rez needs to move into the newer markets before Opentable starts promoting its mobile app and increasing its offerings by lowering its prices to restaurants.

More personal!   Urbanspoon built its early fan base by giving voice to many different foodies, both expert and amateur.   Rez would be well-suited if Urbanspoon did more focused outreach to its community highlighting rez’s mobile functionality, and rewarding those users who book through rez.  Urbanspoon should also strongly consider giving more of an identity to those that use rez on the mobile app.  Perhaps in the same way Yelp has given its core users more on-site visibility and status with its “Yelp Elite” designation. 

Overall, rez is a valuable tool for both users and restaurants and the increased competition that Opentable feels will only result in better options for both parties.  Urbanspoon must differentiate itself somehow and focusing on mobile seems like the logical way to do so.

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2 thoughts on “Online Reservations through your phone?

  1. peterlux February 14, 2010 at 4:42 am Reply

    James,

    Great overview of the strengths and weaknesses of the rez program. Mobile platforms seem like a natural biotope for restaurant reservations, combining location-based search with timeliness and personal preferences.

    I like the idea of adding Happy Hour reservations to the app.

    To really attract users, it’d also be great if there’d be perks to making mobile reservations, e.g. coupons, free drinks etc.

    It’d also be interesting to see a social networking element added to the service.

    Peter

  2. Amy Rainey February 16, 2010 at 3:13 am Reply

    I agree about Urbanspoon’s competitive advantage. I think the vastness of UrbanSpoon’s dining content makes its mobile app a much stronger draw than an app that only does one thing (make reservations at participating restaurants). I rarely make restaurant reservations, but I’d be much more likely to if given the easy option when searching a restaurant on UrbanSpoon’s app. So they just need to add Rez to the Android app… =)

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