Restaurants Incentivize Pickup Adoption With Store Credit Rewards

PYMNTS data reveals store credit can be a powerful driver of pickup adoption for restaurants.

The Context

Restaurants are looking to get more customers to shift from ordering delivery (or not ordering at all) to ordering pickup. In December, Domino’s Pizza announced the return of its promotion to offer $3 credits for ordering carryout, a “tip” for their labor going to and from the store, the way consumers tip delivery drivers.

“Inflation impacted delivery due to the added expenses of fees and tips on that channel,” the pizza chain’s CEO Russell Weiner said at the time. “Our research shows that a relatively higher delivery costs during inflationary time leads some customers to prepare meals at home instead of getting them delivered. We believe this dynamic will continue to pressure the delivery category in the short term, as long as consumers’ disposable income remains pressured by macro-economic factors.”

Certainly, incentivizing pickup is key. On the one hand, the channel is less costly for restaurants than delivery, not requiring eateries to pay third-party aggregators’ steep commissions nor to foot the labor cost of couriers themselves. On the other, pickup can be key to maintaining customer frequency amid inflation, with many customers no longer willing to spring for the added fees and tips associated with delivery.

From in-store to curbside to drive-thru, brands are seeking ways to get consumers on board. Even fast-casual brands, which historically did not rely on the channel, have been expanding their drive-thru options, with brands including Chipotle, Shake Shack and Sweetgreen investing in growth in the channel.

By the Numbers

For the latest edition of PYMNTS’ Connected Dining study, “Connected Dining: Rising Costs Push Consumers Toward Pickup,” we surveyed more than 2,100 U.S. consumers in January about their restaurant dining habits. The study found that roughly half of consumers said they would be more inclined to order their meal for pickup rather than have it delivered if they were rewarded for doing so with a gift card for reduced item prices on their next order.