Restaurant innovation

Deep Dive: Why QSRs Are Investing In Product Diversity, Order Management During The Pandemic

Restaurants and quick-service restaurants (QSRs) are used to stiff competition, but the ongoing pandemic has kicked it into an even higher gear.

Some QSRs’ already-thin operating margins have been stretched beyond the breaking point as budget-conscious consumers shy away from eating out, forcing the eateries to declare bankruptcy.

One study during the pandemic’s early stages found that 47 percent of consumers were forgoing dining out, likely due to a combination of financial and health worries. Other affected QSRs have completely shut down their physical locations in an attempt to cut costs, relying entirely on either takeout or delivery orders to stay in the black.

These delivery and takeout services — operated mainly through digital channels — are just as crowded as they were in the traditional brick-and-mortar food space, however, meaning QSRs need to quickly differentiate their products from others’. One way to accomplish this is by showcasing novel and diverse food items to entice new and existing customers, but restaurants must use cutting-edge point-of-sale (POS) systems that can smoothly handle expanding digital order volumes to do so without facing ballooning inventory and upkeep costs.

The following Deep Dive examines why and how QSRs are expanding their menus and diversifying their products during the pandemic. It also analyzes the tools these entities are using to adequately support this diversity, and what digital solutions’ expanded use means for the future.

Diverse Menus Drive Diverse Customer Spending

Numerous QSRs are attempting to keep old customers loyal and draw in new ones by expanding their menus or offering unique items. The pandemic has accelerated a preexisting trend in the restaurant industry in which QSRs — driven by doing more business with digitally savvy millennials and Generation Z consumers — have sought to personalize their interactions.

One 2019 study found that 50 percent of restaurants felt they were a few steps behind their competitors in providing unique digital experiences, which prompted these eateries to spend more on beefing up their offerings.

Investing in digital innovations was costly even before the pandemic was declared as restaurants typically operate on slender profit margins between 3 percent and 5 percent. This makes it even more crucial that QSRs’ menus appeal to consumers who have become spoiled for choice. Providing unique options as well as adding personal elements can keep in-store and online customers loyal.

Increased menu diversity can also appeal to more consumers. This includes Gen Z members, who spend an average of $1 out of every $5 they have on food orders, often through mobile or digital channels. Having a more robust selection of items can also draw in consumers with dietary restrictions, such as food allergies or sensitivities. A 2019 report revealed that more than 100 million Americans face such restrictions, for example.

Many QSRs have thus been interested in expanding their menus for several years, with the pandemic simply creating more impetus for eateries to make their moves. It is also important for restaurants to offer their items through channels that can immediately and easily catch and hold consumers’ attentions, especially as orders and customer interactions move online.

The Next Stage Of Online Order-Ahead

Today’s QSRs must do more than offer unique menus using the digital devices and tools with which many consumers are familiar; they must also personalize their offerings and customer outreach efforts. This is leading to growing interest in technologies, such as artificial intelligence (AI), that can ease customers’ interactions with expanded online menus. Customers with dietary restrictions may be able to interact with AI-supported menus to filter out items with allergens, for example.

QSRs can also keep their customers satisfied by bolstering their POS systems to accommodate the rising number of online orders as well as in-store purchases. Such systems must be capable of seamlessly supporting orders through various channels, including self-service in-store kiosks and mobile orders for pickup or delivery. Eighty-four percent of restaurant industry professionals claimed in a 2019 survey that their POS systems were critical to their success, but adding flexible management and ordering capabilities to these systems has become even more essential during the current health crisis. This has led more in the industry to consider cloud-based POS systems that can accommodate more data and more customer inquiries with ease.

New technologies such as these will help QSRs compete in an environment in which consumers now expect unique and personalized dining experiences. Ensuring they stay on top of these trends will be key to enabling restaurants to create diverse, digital dining options that appeal to consumers across all generations.

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