Nearly 80 percent of the U.S. population use smartphones for many everyday tasks, including helping to locate restaurants, get directions, review menus, place orders and make payments.
But restaurants often lag behind other industries in adopting new technology, lacking the time or budget for massive digital overhauls
Over the course of 4 articles, we will examine the rapid expansion of mobile technology utilization within the quick service and fast casual restaurant industry. These technological changes are forcing restaurant operators to behave more like tech start-ups than burger joints. Brand success is no longer defined simply by the quality of food (good food is table stakes) but is now defined by convenience, empowerment, and above all listening to the customers. This requires QSR brands to become adept at the collection and synchronization of data across the supply chain from the back of the house operations to the front of the house operations.
So, what do these trends mean for restaurant operators? To put it simply, incorporating digital services to increase convenience factor for guests will have a major impact in driving diner frequency. It also means the guest journey from discovery to loyalty has changed dramatically. There is increasing demand for restaurants to make their menu, reviews, and ordering options readily available to the guest based on their location data.
We’ve outlined 5 stages anchored around leveraging unique capabilities of mobile technology:
Location – Owning Dynamic Catchment Areas
When clientele make the decision to dine out, what will make them choose your restaurant among all of the options they are presented with? Generally speaking, they open their smartphones to research what is available to them based on their time their proximity. For decades, Google trained marketers to compete for “word” and “phrase” supremacy. Search was the first point of discovery for guests. But smartphones with persistent location signals have created new points of discovery based on apps (e.g. UberEats, GrubHub, Yelp, Google Maps) or mobile web pages. These touch points can notify guests of nearby locations, specials, or personalized rewards which can be a driving factor in enticing a guest to visit or order from your restaurant.
After a customer discovers your menu they enter into the stage of “convenience.” One of the main motivations for guests is their time constraints. A recent Gallup Poll discovered nearly 80% of Americans are stressed simply because they don’t have enough time in the day to complete everything.
As a result, the guest expectation is that ordering and check-out will be seamless and quick regardless of whether it’s in-store or for delivery. For example, Domino’s Pizza “Anyware” which includes apps, social, text, slack, and voice options account for nearly 40% of all orders. But convenience requires some level of information from the guest. In the case of Domino’s, a guest must create a pizza profile to access the convenience easy ordering. Another example, QSR chains are creating mobile ordering functionality within mobile ad units to reduce the number of steps for guest in route to conversion. The takeaway: provide guests with more functionality early in their experience rather than entertain them with contextually relevant experiences.
We can see a trend developing that is driving guests toward an easy checkout process. Payments are a critical part in converting mobile natives as they adopt cashless payments for convenience and speed. Mobile and unattended POS systems reduce time waiting at the table for servers to bring a guest’s bill. Customers can use pay-at-the-table systems and/or self check-out options to eat and be on their way. Additionally, integrated mPOS restaurant technology speeds up the ordering process, as menu options can be quickly selected with the touch of a button, then relayed to line cooks and chefs. According to Transparency Market Research (TMR), the worldwide mPOS market, which is expected to attain a value of US$4.21 bn by 2017, will expand further at a remarkable CAGR of 35.40% between 2017 and 2025, reaching US$47.7 bn by the end of 2025.
Remember the saying “the customer is always right.” It sounds cliche but the best restaurant operators make it an endless pursuit to listen and understand their guests’ needs. For example in 2015 consumers were surveyed to determine their top menu items for breakfast. McDonald’s long has dominated the breakfast category, which already accounted for roughly 25 percent of McDonald’s sales. For years, McDonald’s customers were pushing for the chain to extend the breakfast menu beyond the 10:30 am cutoff. But according to McDonald’s, there was too much operational complexity to provide burgers and fries as well as breakfast all day.
Later that year, McDonald’s decided it could no longer ignore it’s customers and rolled out all-day breakfast. “This is the consumers’ idea. This is what they want us to do,” Mike Andres, McDonald’s USA President, told the Wall Street Journal.
Behind this story was terabytes of data informing McDonald’s what will entice their guests; the point of sale terminals, e-commerce transactions, social media, and mobile apps all offering insight into the guests’ needs. The modern-day chain requires an adept ability to synthesize information from the franchise level to the corporate level that will drive effective strategy. More on this in subsequent articles.
Finally, we come to the stage of loyalty (Eureka!!!). This is where a guest becomes a customer and the relationship becomes personal. All of the previous stages have provided a compelling reason for the customer to self-identify and provide additional data to personalize their future experience. The 2017 LoyaltyOne Consumer Sentiment Study found that 52 percent of U.S. consumers agreed that they would provide more personal information if companies sent them communications and product offers based on the data they collect. But this is not the stage where a brand pushes the customer to download an app. There is a growing misconception in the QSR and Fast Casual industry that a brand must have a loyalty app. But this conflates the issue of loyalty with technology. An app is a technical product used to solve a specific customer need. A loyalty program is a channel and technology agnostic.
In our next article, we will feature our interview with Jennifer Crawford who leads strategy for off-premise sales with Fazolis System Management. The rise of companies like UberEats, GrubHub and Waitr highlight the trend that customers are increasingly taking their business out of the store and bringing it straight to their homes. As a result, more chains are developing off-premise strategies that demand a new type of restaurant executive adept in the world of technology.