Mobile order-ahead has had an outsized impact on the entire restaurant industry, with a recent study finding that only 15 percent of restaurant meals are eaten on-premises, down from 40 percent several years ago. This is largely due to the increasing prevalence of delivery, which increased by 15 percent since 2018 primarily due to the rise of mobile-order ahead apps.
Many restaurants are not taking advantage of these growing trends, however. A new study from the National Restaurant Association found that only 18 percent of restaurants offer mobile ordering via their own apps, despite 43 percent of consumers wanting to place orders via such methods. Restaurants cite high costs and lack of demand for not offering first-party ordering, and many make up for this by employing third-party services.
In the November Mobile Order-Ahead Tracker, PYMNTS explores the latest developments in the world of digital ordering, including mobile ordering milestones from Chipotle and Chick-fil-A, a brand-new rewards program from Wahlburgers and growing concerns of fraud from both quick-service restaurants (QSRs) and consumers.
Mexican QSR Chipotle is one chain that is seeing dividends from mobile order-ahead. The QSR recently announced on an earnings call that its digital sales for Q3 2019 increased 87.9 percent year over year (YoY), accounting for 18.3 percent of total sales for this period. This digital sales growth contributed to a total revenue increase of 14.6 percent to $1.4 billion. This boom is due to the prevalence of mobile ordering across its store locations, according to CEO Brian Niccol. More than 97 percent of Chipotle locations now offer delivery.
Chick-fil-A is also expanding its mobile ordering capabilities by enabling dine-in preorders. The app now allows diners to order food in advance and have it served to them upon arrival. App users need only select the “dine-in” option and tap their smartphones to indicate the tables at which they are sitting. Chick-fil-A’s director of service and hospitality Khalilah Cooper stated that the feature is particularly popular with parents attempting to remember multiple orders.
Fraud is a constant concern for QSRs and their customers. A new study from safety solution provider Sift found that 62 percent of QSR customers are concerned that their online interactions with restaurants could be at risk, with 49 percent particularly worried about stolen credit card data and 41 percent about account takeovers (ATOs). The study also discovered that 37 percent of consumers would abandon a QSR entirely if they were defrauded.
Wahlburgers Joins The Mobile Order-Ahead Scene With WahlClub
One of the more unique players in the QSR field is Wahlburgers, which was founded by the famous Wahlberg family. The chain recently became the latest entrant to the mobile order-ahead field with WahlClub, a digital ordering app and rewards program bringing a celebrity twist to typical ordering features. For this month’s Feature Story, PYMNTS spoke with Wahlburgers’ senior vice president of marketing and innovation, Dan Wheeler, about how the QSR works to meet the security challenges inherent in the mobile order-ahead space by using machine learning and two-factor authentication.
Gift cards have been growing increasingly popular as a means of driving QSR revenue, particularly eGift cards that customers can access and redeem via their mobile devices. These cards are prime targets for fraudsters, however, as they can be easily stolen and laundered for cash without catching the attention of the authorities. This month’s Deep Dive explores the methods that fraudsters use to steal gift cards and the techniques QSRs are leveraging to stop them.
About the Tracker
The Mobile Order-Ahead Tracker™, done in collaboration with Kount, serves as a monthly framework for the space, providing coverage of the most recent news and trends, along with a provider directory highlighting the key players across the segments that comprise the mobile order-ahead ecosystem.