Retail

Why QSRs Are Upping Their Digital Game

When QSRs Use Digital Payment Technologies

In the digital age, quick service restaurants (QSRs) have a host of technologies at their disposal to remove friction in the ordering process and drive repeat visits, such as self-service kiosks and mobile apps.

Consumers have generally had strong positive experiences with digital technology. The PYMNTS Restaurant Readiness Index found that 62 percent of them said such features would make them more likely to visit QSRs in the future.

But the report noted that “the most common reason managers don’t like features like self-service kiosks and online ordering is that they believe customers don’t like them.” However, many QSRs, from Dunkin’ Brands to Taco Bell, are tuning to these digital innovations. These are just some of the ways that these companies are bringing innovative ordering and payment options to consumers in the digital age.

More than eight in 10 – or 84.1 percent – of QSR customers see fast in-store pickup as key to a QSR’s future success. Some startups are enabling pickup for these restaurants with devices called pods. Through a company called Minnow, diners can place their orders through the website or app of a restaurant. The establishment then prepares the food and puts it in the company’s pods. Diners are sent notifications when their orders are ready, and then retrieve them using the company’s locker-like storage device. “It’s all done through a wireless locking mechanism that is controlled by a smartphone app,” Minnow Co-Founder and CEO Steven Sperry told PYMNTS in an interview in November.

Roughly 83.6 percent of QSR customers see online/app ordering as key to a QSR’s future success. Dunkin’ Brands, for instance, is teaming up with Grubhub for a delivery pilot to help bring coffee quickly and conveniently to consumers. Dunkin’ Brands CEO David Hoffmann said of the partnership during an earnings conference call in February, “Grubhub is No. 1 in the delivery space, and we’re excited to add them to our list of high-quality partners.” He added that the company was beginning with a small pilot before looking toward a bigger market test. For Baskin’ Robins, he noted that the brand continues to expand its DoorDash partnership. The brand now has delivery in more than 70 percent of its Baskin’ U.S. stores, which represents a 40 percent increase in coverage year over year, Hoffmann noted.

Slightly under 80 percent  – or 79.5 percent – of QSR customers see loyalty programs as key to a QSR’s future success. Domino’s, for instance, was offering members of its Points for Pies rewards program a chance to earn points without having to buy pizza from the chain, in an attempt to earn customer loyalty heading into the Super Bowl pizza rush. President and Chief Brand Officer Art D’Elia said in an announcement for the offering, “Instead of advertising during Sunday’s game, we decided to invest in a breakthrough program.” Diners downloaded the company’s app and signed up for its rewards program to receive the promotion. They could then tap into a “newly embedded pizza identification feature to scan their pizza” and earn 10 points. With 60 points, they could receive a medium two-topping pizza at the restaurant chain.

More than eight in 10 – or 83 percent – of QSR customers see wallet acceptance as a feature important to a QSR’s future success. The statistic comes as Apple announced in January that Taco Bell, among other merchants such as Target,  Hy-Vee and Speedway, was now supporting Apple Pay. In a press release, the technology company said that with the addition of the national retailers, 74 of the leading 100 merchants in the U.S. now support Apple Pay. Apple’s Vice President of Internet Services Jennifer Bailey said in the press release, “Whether customers are buying everyday household items, groceries, snacks for a road trip or grabbing a quick meal, Apple Pay is the easiest way to pay in stores, while also being secure and faster than using a credit or debit card at the register.”

And approximately three quarters – or 73.9 percent – of QSR customers see self-service kiosks as key to a QSR’s future success. Taco Bell, for instance, is bringing new technology into its brick-and-mortar restaurants across the country to help offer diners new ordering experiences and modernize its brick-and-mortar stores. To further that aim, the quick-service restaurant (QSR) chain is deploying self-service kiosks. The devices let customers swap out beef for beans to make a dish vegetarian, or bring spice to a menu item by adding jalapenos. Diners can then pay with their credit card or a restaurant gift cards at the kiosks. Alternatively, the company allows diners to place their orders on the devices and then pay with cash at the counter.

Even with the digital efforts of QSRs such as Chipotle Mexican Grill and Domino’s, new technologies do come with their share of challenges and resistance. But with younger generations looking more options, QSR customers have a greater appetite for innovation than restaurant owners might have previously thought.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 AML/KYC Tracker, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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