The recent Q1 2024 earnings call for Olo Inc. [NYSE:OLO] was a symphony of positive notes: soaring revenue, expanding margins, and a string of high-profile customer wins. Yet, beneath the triumphant fanfare, a subtler melody played, one that might hold the key to Olo's long-term dominance. The strategic weapon in question? Borderless, Olo's passwordless checkout feature.

While analysts dissected Olo Pay's impressive growth and the potential of card-present transactions, Borderless quietly doubled its user base to a staggering four million opt-in guests. This seemingly innocuous detail might be a harbinger of a seismic shift in the restaurant industry's data landscape, one that could redefine the very meaning of customer loyalty.

Olo's core business has always revolved around streamlining restaurant operations through digital ordering and delivery. Yet, with Borderless, Olo transcends the role of a mere efficiency tool and positions itself as the architect of a new era of hyper-personalized dining experiences.

The implications of this shift are profound. Consider the traditional loyalty program: clunky sign-ups, forgotten passwords, and generic rewards that rarely resonate. Borderless, by contrast, offers a frictionless portal to a world where every guest feels like a regular.

Imagine walking into your favorite coffee shop, placing an order through the app, and seamlessly checking out with a single tap, all without ever having to grapple with a password. This seemingly minor convenience unlocks a treasure trove of data for restaurants, allowing them to build incredibly detailed guest profiles that encompass not just order history, but also nuanced preferences, dietary restrictions, and even preferred pickup times.

This data gold mine, combined with Olo's growing ecosystem of point-of-sale integrations, paints a compelling picture of Olo's future. The company is poised to become the central repository of restaurant data, wielding an unmatched understanding of guest behavior across both digital and non-digital channels.

But here's where the story gets truly interesting. Olo's CEO, Noah Glass, hinted at the potential of Borderless to supercharge existing features like Smart Cross-Sells, using network-level data to personalize recommendations and drive basket size. This opens up a fascinating avenue for ARPU growth, transforming a simple convenience feature into a powerful revenue engine.

Let's crunch some numbers. If Olo Pay's $1 billion in GPV for card-not-present transactions represents just 16% of the total addressable market, the potential for card-present transactions is a mouthwatering $6 billion. Now, imagine leveraging Borderless' data to boost conversion rates and average order values across that vast pool of transactions. The revenue implications are staggering.

Olo's focus on professional services further amplifies this potential. As restaurants scramble to make sense of this new data landscape, Olo's expert guidance could prove invaluable, driving adoption of its Engage suite and solidifying its position as the go-to digital strategist for restaurant brands.

Hypothetical Projections

Based on the current trends and Olo's statements, let's explore some potential scenarios:

Borderless User Growth

The chart below shows the hypothetical growth of Borderless opt-in guests, assuming continued exponential growth.

Olo's silent revolution in restaurant data might not be making headlines yet, but the numbers speak for themselves. Borderless, the seemingly unassuming feature, could be the catalyst for a monumental shift in how restaurants understand and engage their guests, transforming Olo from a digital ordering platform into a data powerhouse poised to reshape the future of hospitality.

"Fun Fact: The average American dines out 4.2 times per week. Imagine the potential of Olo's data-driven personalization to influence these dining decisions, creating more engaging and rewarding experiences for both restaurants and guests."