Unidentified Analyst: Yes. All right. And then I guess on top of that, I mean, is there a possibility for a similar arrangement with Migros?
Noah Glass : Yes. We don’t take any of the POS partners that we currently work with today off the table. We’re sequencing this based on a variety of factors and we’re excited to work with Qu as a challenger point of sale that is kind of relatively new on the scene and gaining share, and with NCR as our longest-term POS partner and the largest POS partner that we have the most number of restaurant brands and locations with today and everything in between.
Unidentified Analyst: All right. Hey, great quarter, guys. Thanks for taking my questions.
Noah Glass : Thank you.
Gary Fuges : Our next question is from Stephen Sheldon with William Blair.
Matt Filek : Hey, Noah and Peter, you have Matt Filek on for Stephen. Thank you for the questions. I wanted to start with a macro-level question. Just curious on what trends you are seeing in consumer spending and engagement and how you feel about the overall health of the consumer heading into the second half of the year?
Noah Glass : Well, great question and certainly one that’s been in focus as we listened to restaurants reporting earnings. I would say, there is certainly the same sort of sentiment with consumers of a trade-down into lower expensive restaurant offerings. You’ve heard restaurant brands talk about losing some of the lower-income consumers. What we really see at this moment in the industry is that restaurants are dealing with two different forces. One is labor pressure, the higher cost of labor, some of that is based on regulations as in California, the difficulty of getting enough labor inside the restaurants and traffic declining. And part of traffic declining is some of that price sensitivity. I think also some of it is driven by food costs and the inflation in food costs leading to restaurants taking price.
And that’s always a trade-off when restaurants take price and charge higher prices for traffic. So a big thing that we’re focused on in Olo is addressing those two challenges that restaurants are facing. The first around labor, helping them to do more with less, and that is something that Olo has always been all about in every solution that we brought to market, helping the restaurant be more efficient in their use of labor, putting more of the ordering and payment in the hands of the guests so that the restaurant can focus on really delivering on high hospitality interactions with the guest and be more efficient from a labor standpoint. And on the other front, really helping restaurants know their guests better, understanding all of the different touch points with the guest and being able to personalize their marketing to the guests, increase conversion and have guests increasing their guest lifetime value without necessarily requiring restaurants to resort to things like discounting or offers to drive guests back in.
So these two value propositions of both helping you do more with less and better know your guests to drive traffic are really resonant with restaurants, given those challenges that they’re experiencing with consumers at this moment.
Matt Filek : Got it. That’s helpful, Noah. Thank you for that. And then can you just talk some more about the recently announced Smart cross-Sells product, particularly what early customer feedback has been like? And do you think that’s something that could be a driver to ARPU growth over the longer term?
Noah Glass : Yes. Smart Cross-Sells is one that we are really proud of. I mentioned there were 13 different capabilities that we announced in our spring release. Smart Cross-Sells is one that is really, really fun because it is using that ordering and checkout experience and all of the data that we’re able to see to utilize the context of what is in the cart and what we’ve seen in terms of product affinity from one product to other products that go nicely with that product in a really data-driven way to make a, as the name suggests, Smart Cross-Sells rather than just saying, do you want fries with that or do you want a drink with that as we’re all used to hearing. And the results really speak for themselves. We’ve seen a 10% lift in basket size when using Smart Cross-Sells versus using the sort of traditional upsell.
And all of this is automated. This does not require that somebody is manually doing upkeep to do that affinity mapping of one product to another product. It’s very similar to the way that services like Netflix or Spotify use collaborative filtering to use AI, to use machine learning, to use the data that we see to have the best offering put in front of the customer at the right moment. I’m very proud to announce this was not in the prepared remarks but we now have over 10,000 locations already adopting smart cross-sells, and we’re very excited that it also means no manual upkeep. This will continue to get smarter and smarter. And we hinted a little bit at how this can get smarter from here. So understanding who that guest is what they’ve ordered in their order history is one way that we’re focused on making smart cross sell even smarter.
And then also, pulling in the data that we can see about the guests from across the older platform, really flexing the Olo network through our Board with identity to understand who that guest is and what they’ve done in other ordering scenario that other brands to make the smart cross-sells even smarter for that specific guest with a network and board list already four million strong So we’re excited about continuing on that personalization journey using data, using AI, using machine learning. And certainly, we believe that there is a revenue opportunity there and therefore an ARPU opportunity there over time.
Stephen Sheldon: Got it. Thanks for that added color. That’s helpful. I appreciate the time. Nice quarter guys.
Noah Glass: Thank you.
Operator: [Operator Instructions] Our next question is from Clarke Jeffries with Piper Sandler.
Clarke Jeffries: Hello. Thank you for taking the question. Noah, Peter, it’s good to speaking with you. Noah, I wanted to ask, coming away from beyond 2024, I think it was very interesting to see the progress one year in the sort of mindshare of the marketing products and sort of the help on the marketing side that you’ve built with the Engage suite. I was just curious about your takeaways on the appetite balance between Engage and Pay as you look at this year, does Engage seem like a product that might and bump up in the priority list or the demand list looking at 2024. And when you think about smart cross-sell as an accelerant to that and could that be a factor? And the final part of that question is just could you remind us how many customer profiles you have powered by the borderless data today? And then one follow-up.
