Tapping Into The Digital Economy With Restaurant Innovations

In a bid to serve customers through digital channels, quick-service restaurants (QSRs) are rolling out new innovations. These technologies bring more options for consumers to order and pay for their meals, such as kiosks and mobile ordering. In one new approach, some QSRs are offering delivery beyond the home and office.

In April, Domino’s Pizza announced that Domino’s Hotspots would allow customers to receive deliveries in spaces such as parks, sports fields or beaches. Such offerings can help QSRs bring in customers: According to the PYMNTS Restaurant Readiness Index, 62 percent of consumers said the availability of digital innovations would make them more likely to visit in the future.

Seven in ten – 70 percent – of McDonald’s locations in Texas, Florida and Maryland have self-service kiosks available for customer use. With the addition of kiosks, McDonald’s is focusing on customer experience and choice. It will be adding these self-service stations at a rate of 1,000 U.S. stores per quarter for an eight- to nine-quarter period, it was reported in June. McDonald’s CEO Steve Easterbrook told CNBC at the time, “We’re trying to add more choice and variety. Two years ago, if you were a customer, there were two ways you could get served at McDonald’s. You walk to the front counter and line up and take your drink and find a table or you go through the drive-through. We’re introducing many options.” QSRs are increasingly using options such as kiosks to interact with their customers, as people who input their own orders tend to expend more. According to one study, consumers spend 30 percent more when ordering through self-service kiosks.

Just fewer than six in 10 – 59 percent – of Starbucks customers recently made their orders online or via app. Loyalty and mobile continued to do some productive lifting for Starbucks in its fiscal third quarter of 2018, as those two factors contributed to an 11 percent year-over-year revenue increase, with sales for the coffee chain reaching $6.31 billion. Starbucks did not offer detailed quarterly figures about its overall mobile sales in the July release of its financial results. At the end of 2017, though, mobile payments accounted for 30 percent of the brand’s total transactions. The chain’s Mobile Order and Pay service, which Starbucks recently opened up to non-members, gained at least a bit of steam in the company’s Q3, now making up 13 percent of U.S. company-operated transactions, the company said in its financial report. That compares with 12 percent for the company’s fiscal Q2 and 9 percent in the fiscal third quarter of 2017.

Only a few – or 3.3 percent – of consumers use QSR-based mobile apps to pay for their orders. Borrowing from the strategy of fast food restaurants, Dine Brands is working on a new order-ahead technology. Through an app, diners can order their food ahead of time and then pay their bill electronically, the New York Post reported. “It’s like converting casual dining to fast food,” Dine Brands CEO Stephen Joyce told The Post. Dine Brands, which oversees IHOP and Applebee’s Grill & Bar, is developing and experimenting with the technology, as same-store sales at Applebee’s locations in the U.S. have declined over the last two years. By adding the technology, restaurants such as Applebee’s hope to increase spending and bring in younger customers.

About half – or 47.2 percent – of customers didn’t know their QSR offered a loyalty or rewards program. But 10 years ago, in 2008, TGI Fridays, for instance, blazed a rewards and loyalty trail that countless restaurants have since followed. In April, the chain announced it will be taking that customer experience to the next level through a partnership with customer data and engagement platform SessionM. The program retires static rewards, such as free desserts and burgers, for more dynamic, real-time rewards experiences that may or may not revolve around food. Customers can earn rewards on a more flexible basis that does not always require them to come into the store and sit down for a meal. Instead, they may sometimes earn rewards by participating in external branded activities, such as engaging with the brand on social media.

One in 10 – or 10.4 percent – of customers order at a special preorder physical location. Dunkin’ — like its oft-mentioned competitor Starbucks — has been pushing consumers toward greater use of mobile order ahead, and bumping into the same issues that tend to plague QSRs: Even when the technology works to expectations and gets an order prepared on time, the physical layout of the store is not built to accommodate the new era of ordering ahead. So, the customer who picks up at the drive-thru still has to wait in the line of people ordering and paying, while the customer inside the store still has to navigate the customers ordering and waiting. The new 2,200-square-foot concept stores rolling out this year seek to solve that problem by separating the drive-thru lanes, enabling mobile customers to get their orders faster. The stores’ interior design mirrors that separation, with a designated order-ahead queuing area.

And during a July conference call with analysts, Domino’s CEO Rich Allison noted that the chain is pleased with the launch of its Domino’s Hotspots ordering platform. “We continue to demonstrate our ability to invest and innovate in a flexible manner,” he said, adding that the additions help the company stay up-to-date in digital.