Big wins for bakeries
Two New York bakeries boosted business with online ordering — on their terms.
This look at the future of hospitality is sponsored by Square.
Let’s take a moment to celebrate what tech does for local businesses.
My email inbox is frequently overwhelmed by announcements from large enterprise restaurant brands sharing new tools, products, partnerships, or initiatives. They’re the kind of flashy improvements and adaptations Wall Street loves; they make restaurants more efficient and open the door to more business. Something like Panera’s new ordering system or a revamped mobile loyalty program from Starbucks can command weeks of coverage and, deployed at scale, cause a noticeable business lift.
Less celebrated — but no less consequential — are the small restaurants prudently implementing new tech on their own schedule. That’s the case with two New York bakeries I recently spoke to as part of my continued Counter Trends series on The Bottom Line, a publication from Square. The businesses were built by founders with nearly opposite histories; one by a woman who’s struggled with addiction and homelessness, another by a former high-powered attorney.
Each business has thoughtfully implemented ordering technology to serve a growing audience. And each owner seems as impressed by their store’s tech-enhanced performance as I am with their individual stories of success.
Bakery ownership is a second career for Helene Godin, whose By the Way Bakery started as a dream of opening “one tiny little store” in a village outside of New York City. (Before that, Godin worked as an entertainment lawyer for such recognizable franchises as Saturday Night Live and Reader’s Digest.) The first “tiny little store” quickly led to another, this time in the city. Now, By the Way Bakery, which bakes and sells exclusively gluten- and dairy-free baked goods, has four dedicated retail locations and a thriving wholesale business. (Godin will sell over a quarter-million pre-packaged cake slices inside hundreds of grocery stores this year.)
But what Godin didn’t have — until just a few weeks ago — was a dedicated, first-party ordering system for her website. Previously, customers had to open a third-party app like DoorDash to order online.
“It’s been less than a week and it’s exploded — oh, it’s exploded!” she says. Godin declined to share sales numbers; she says it’s too early. But it sounds like the bakery’s fastest-growing sales channel yet.
“Anecdotally,” she told me during our interview, “we can’t keep up.”
For Janie Deegan, owner of another New York bakery, Janie’s Life-Changing Baked Goods, online orders are a way to keep up with demand. In fact, she told me, it’s actually opened the door to much larger orders than she ever expected.
While about a third of the bakery’s retail sales come through third-party delivery apps, Deegan and team rely on GetJanies.com, a cleverly named website powered by Square, to handle huge orders worth thousands of dollars apiece. It’s a particularly attractive channel for the brand’s corporate clients, including Facebook and Google — though any customer interested in a few of Janie’s truly life-changing Pie Crust Cookies can place an order on the site, too. (She ships nationwide!)
“Nobody actually likes to talk on the phone,” Deegan said during our interview. (I’ve heard this sentiment for over a decade, and as a former assistant who toiled at a desk outside the corner office well before the internet’s heyday, I agree!) “The assistant isn’t going to call us and talk to someone on the phone — or send a million emails back and forth,” she added.
That’s true even when the orders are large.
“You could order $4,000 worth of cookies for a month from now without having to talk to someone,” Deegan said. “It helps us capture these large orders with no margin of error — we’re not going to miss the email, we’re not going to miss the phone call.”
“It’s always shocking to me … I can’t believe this company is ordering $4,000 worth of cookies without even picking up the phone and confirming we can do it,” she added.
For both bakeries, online ordering is a small part of a bigger story.
No one has to convince this seasoned restaurant technology reporter of the benefits of direct ordering. But I’ll still share some numbers: according to data from Square, 78 percent of restaurant owners say online ordering drives the most orders to their business. Profit margins are up to 64 percent higher for direct orders versus those placed through a third-party marketplace.
That data is clear, but I especially love a big-picture view. Both Godin, the energetic former attorney and Deegan, the home baker who started a business from scratch in her own kitchen, are growing their businesses on their terms, at their pace. These successes, and the tens of thousands like them, may not make a big splash on Wall Street, but they’ve changed life for the better on Main Street.
Thanks to Square for sponsoring this coverage, supporting my deep dives into the top challenges (and wins!) for local restaurants. Read more about these and other trends in my series Counter Trends, published on The Bottom Line.