The New Taco Bell And The Changing Face Of The QSR Space

Taco Bell

Taco Bell has come up with a new store design to encourage consumers to order their meals ahead of their arrival — making it the latest quick-service restaurant (QSR) chain to rethink its entire operational structure in response to consumers’ surging use of drive-thru lanes and order-head capabilities amid the pandemic.

Taco Bell reported drive-thru usage surged up by 4.8 million cars during the second quarter of 2020, even as its same-store sales fell 8 percent on the whole. The new design being unveiled this week will feature two drive-thru lanes — one for consumers who’ve ordered ahead online, one for those who just placed their orders.

“We have a lot of franchisees interested in expanding drive-thru capacity,” Taco Bell Global Chief Operating Officer Mike Grams told CNBC.

According to an announcement by parent firm Yum! Brands, the dual drive-thru is not the only addition coming with the new design. The new Taco Bell will also feature smart kitchen technology designed to detect when a guest has arrived at the restaurant — and be able to rout them to the quickest pickup experience available. To support that, the Taco Bell “Go Mobile” customer will have an option to skip the drive-thru entirely by using a dedicated curbside pickup space.

To further smooth out and speed up the ordering experience for guests, Taco Bell will also be inserting “bellhops” to offer tablet ordering and curbside pickup.

The first Go Mobile design is slated to open in the first quarter of 2021, and Taco Bell has also begun incorporating some of its features into existing locations.

“With demand for our drive-thru at an all-time high, we know adapting to meet our consumers rapidly changing needs has never been more important,” Grams said in the firm’s announcement of the new Taco Bell Go Mobile design.

“The Taco Bell Go Mobile restaurant concept is not only an evolved physical footprint, but a completely synchronized digital experience centered around streamlining guest access points. For the first time, our guests will have the ability to choose the pick-up experience that best fits their needs, all while never leaving the comfort of their cars,” he said.

While Yum! Brands and Taco Bell are capturing the headlines today, their move is far from unique in the QSR space, where the recurring story of the earnings season has been how digital kept revenue afloat and kept losses associated with shutdowns from becoming catastrophic.

Chipotle, for example, when it last reported earnings, showed a 216 percent increase in its digital transactions during Q2, which went on to account for 60.7 percent of the chain’s revenue. All told, according to the chain, order-ahead sales are up 140 percent since the start of the pandemic, while deliveries to home-bound workers have picked up 125 percent.

“We’re also encouraged by the fact that there is a higher incidence of new customers coming to the (digital) platform, making their second purchase,” said CEO Brian Niccol on the earnings call. “In the same month that digital customer is spending more than before. This is another example of our digital assets being sticky, resulting in our July digital mix being nearly 50 percent of sales on the margin for the quarter.”

And while the granular details varied, the basic tune remind the same through the full range of QSR earnings reports, spanning McDonald’s, Starbucks and Burger King. Even the “higher end” fast food providers have all told a similar story about how the pandemic has fueled a dual dive toward digital services and perfecting the drive-thru lane.

Shake Shack, like Taco Bell, recently grabbed some attention with its launch of “Shack Tracks,” which it described as the digitally-enabled pickup window of the future coming to its locations over the next several months. Alongside those efforts, Shake Shack is piloting curbside pickup and working on designing a walk- or bike-thru window for consumers without cars.

“Our hope is that we create access in places where we may not have had access before, and we create opportunities in real estate that we may not have had before,” Shake Shack CEO Randy Garutti told QSR Magazine. “Look, in the moment of safety, people want to stay in their cars. That's not going to last forever. But obviously, this country has proven that the drive thru in its old form works. We want to do it in this new form. We want to do it better than ever.”

As, it seems, do many other QSR players. As the pandemic continues in the U.S., consumers increasingly expect their lives will be altered well into 2021, according to PYMNTS survey data. Now, it seems, is a very good time to think about perfecting a digitally-enhanced drive-thru experience — because it looks like it could very likely be what customers prefer for the foreseeable future.

How similar these experiences will look is not yet clear. Will different consumer sets prefer different variations on the theme? How will brands use mobile to distinguish themselves as order-ahead and curbside pickup increasingly become table stakes?

That remains to be seen, but if recent announcements are any indication it is what QSR chains are orienting their new construction projects around.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.