Yum Brands Rolls out Conversational Commerce to 2,000 Stores

Yum Brands tech spending spree appears to be paying off.

The Louisville, Kentucky-based restaurant company, parent of KFC, Pizza Hut, Taco Bell and The Habit Burger Grill, told analysts on a call Wednesday (Feb. 9) discussing its fourth quarter 2021 earnings results that digital sales throughout the year grew about 25% over 2020, which the company attributed, in part, to the success of its major technological investments.

During the year, the company closed on three major acquisitions: Tel Aviv, Israel-based conversational commerce technology company Tictuk; Melbourne, Australia-based kitchen management and delivery solutions provider Dragontail Systems; and Plano, Texas-based artificial intelligence (AI) analytics firm Kvantum. On the call, Yum Brands Chief Financial Officer Chris Turner offered an update on the rollout of each of these companies’ technologies.

Read more: Yum Brands Acquires ‘Conversational Commerce’ Platform Amid Ongoing Digital Push

See also: Deals, Deliveries and Dragontail

“The impressive adoption rates of these technology platforms are evidence of our franchisees’ confidence in the investments we made to advance our digital and technology ecosystem this year,” he said. “We’re confident these investments have created a meaningful competitive advantage and will be a point of differentiation for Yum.”

The company is now using chat-based ordering enabled by Tictuk’s technology at more locations to reduce friction from the purchasing experience, enabling consumers to order through messaging apps. By the end of the year, Turner noted, the technology was up and running in almost 2,000 stores, up 60% from the first quarter.

Additionally, he shared that the company has now implemented Dragontail’s ordering and delivery solutions in 2,800 KFC and Pizza Hut stores across 21 markets. Relatedly, CEO David Gibbs noted that the number of restaurants offering delivery grew 25% over the year to 45,000, adding that the delivery channel contributed significantly to KFC’s roughly 30% year-over-year increase in global digital sales.

The delivery channel is a vital way to reach nearly half of all consumers, according to data from PYMNTS’ 2021 How We Eat Playbook, created in collaboration with Carat from Fiserv. The study, which surveyed a census-balanced panel of more than 5,200 U.S. adults about how their food ordering behaviors have changed since prior to the start of the pandemic, found that 47% of consumers had ordered food delivery in the previous month, and 43% were making more restaurant and grocery delivery purchases than they did prior to March 2020.

Read more: Restaurants and Grocers See Path to Picking up 200M New Customers

Regarding the company’s data analytics capabilities, Turner shared that Yum Brands has “tripled Kvantum’s footprint” from 13 markets to more than 45, improving the company’s ability to use consumer data to drive sales and loyalty.

For Taco Bell, Gibbs shared that the company plans to continue to drive digital adoption and frequency with “early access to new products, digital-only campaigns and loyalty rewards.” For Pizza Hut, the company is focused on continuing to increase delivery sales. For KFC, the company is focused not only on digital improvements but also on boosting chicken sandwich sales, after the portion of total sales for which this menu item accounted grew ninefold in the year to 9%.