The mobile order-ahead market continues to expand its footprint, growing by 23 percent over the past four years and now accounting for more than 3.1 billion restaurant visits and $26.8 billion in sales. Restaurants that do not adopt these services risk falling behind, with a recent survey finding that restaurants without delivery apps could lose up to 70 percent of their customer base by the end of 2020.
But even restaurants that are leveraging mobile ordering are being faced with more avenues for fraud to enter. Account takeovers, brute force attacks and credential stuffing are some of the most popular methods, with rewards and loyalty programs being especially tempting targets for their stored payment data and personally identifiable information.
The February Mobile Order-Ahead Tracker® explores the latest digital ordering developments, including new digital ordering milestones for Starbucks, the expansion of mobile order-ahead into new areas like groceries and innovative artificial intelligence (AI)-based fraud prevention solutions that could shake up the field.
Starbucks is one quick-service restaurant (QSR) making hay in the mobile ordering scene, with a recent earnings call revealing that digital orders accounted for a full 17 percent of its revenue during Q1 2020. The Starbucks app also hit 18.9 million active users and is particularly popular in China, where mobile orders comprised another 15 percent of the chain’s revenue. Starbucks’ total revenue for the quarter was $7.1 billion, generated by its 31,795 store locations.
Mobile ordering is also spreading to new arenas such as grocery stores. Grocery delivery app Instacart recently partnered with supermarket chain Publix to allow customers to order from the latter’s deli counter via mobile app, although currently this option is only available for premade foods and not meats or cheeses. The partnership was first launched at Publix’s Orlando, Florida-based stores, with the service planned to expand to the chain’s other locations over the next few months.
Many expansions like these, however, are halted by the encroaching possibility of fraud. A study from Kount and Javelin Research found that more than 40 percent of restaurants and other businesses have had online initiatives stopped due to the potential for cybercrime. Customers are also growing wary of this threat, with only 64 percent of customers having confidence in businesses’ ability to protect their personal information. More than 70 percent of restaurants are investing in cybersecurity measures to counter this, however, but many still rely on outdated techniques like usernames and passwords.
For more on these and other mobile order-ahead news items, download the Tracker.
P.F. Chang Takes A Multilayered Approach To Protecting Mobile Ordering, Loyalty Program
Although joining third-party apps like DoorDash or Postmates can help boost sales and brand awareness, many restaurants are striking out on their own with proprietary apps. Such developments bring their share of challenges, including the threat of fraud, but pan-Asian eatery P.F. Chang’s found that these struggles were ultimately worth it. In this month’s Feature Story, PYMNTS spoke to P.F. Chang’s Director of Digital Marketing Whitney French about how the chain overcame its security obstacles, and how its mobile ordering offerings are increasingly affecting its in-store operations.
Analog scams like credit card skimming and promotion abuse are well-worn methods of restaurant fraud, but the rise of digital ordering has opened up a multitude of new channels in which to wreak havoc. Account takeovers, credential stuffing and other techniques are running rampant in the QSR scene, but fortunately, tools like AI can help curb these abuses. This month’s Deep Dive examines how AI-powered security solutions can help stop these types of fraud by analyzing thousands of individual transactions for signs of malfeasance.
About the Tracker
The monthly Mobile Order-Ahead Tracker®, a Kount collaboration, offers coverage of the most recent news and trends and a provider directory highlighting key players across the mobile order-ahead ecosystem.