NEW STUDY: Why Fast Food Isn’t Innovating Fast Enough
ResTech

NEW STUDY: Why Fast Food Isn’t Innovating Fast Enough

Quick service restaurants (QSRs) are known for getting customers their food fast. For modern, tech-happy customers, however, quickly receiving their burger and fries fixes isn’t always good enough.

Not only do patrons want their eatery of choice to offer tasty culinary creations, but they increasingly expect the latest cutting-edge tech, as well. They want to be able to pre-order their meals from their phones (from wherever they may be), pay in advance and skip the line to pick up their ready-to-eat items. All the while, they expect QSRs to remember their preferences. 

In short, customers want innovation, but restaurants, largely, aren’t giving it to them. Why? 

PYMNTS created the Restaurant Readiness Index, a Bypass and Bank of America Merchant Services collaboration, to answer that question. It analyzes the performance of 172 QSRs that have eight to 2,630 locations. The Index’s inaugural edition explores why companies in the $230 billion QSR space struggle to innovate, and how they can change that reputation.

According to PYMNTS research, most brands in the QSR space are losing the innovation race.

On average, they received an innovation readiness score of just 38 out of 100 for their technological readiness, and what’s more, more than 50 percent of restaurateurs reported their businesses have yet to install common tech features like digital wallets (implemented by 15 percent of QSRs), in-store contactless payments (implemented by 35 percent of QSRs) and in-store kiosks (implemented by 37 percent of QSRs).

Meanwhile, there’s a huge innovation gap between the innovation readiness scores of top and bottom performing restaurants. The top performers averaged 61 points whereas the bottom performers averaged just 16 points.

The Index also reveals that when it comes to offering innovative solutions, the size of the restaurant chain doesn’t necessarily matter. 

The top performing QSRs have 26 to 50 locations and excel at offering the top five innovative solutions, including contactless payments, in-store QR codes and in-store digital wallets, among others. The bottom performers, on the other hand, have fewer than 26 locations and tend to focus on features about which consumers don’t always care.

Other key takeaways from the inaugural edition of the PYMNTS Restaurant Readiness Index, a Bypass and Bank of America Merchant Services collaboration, include:

  • Fifty-three percent of QSRs use cloud-based POS systems.
  • Just over 74 percent of QSR’s offer in-store promotions.
  • Soup/salad sellers had the highest average scores (50 out of 100), while frozen dessert distributors did the worst (26 out of 100).

Panera gives its customers a verbal order assist

After debuting mobile order-ahead services in 2012 and overhauling them in 2014, national bakery-cafe chain Panera Bread has become one of the leaders in the race to innovate among QSRs. 

Most recently, the St. Louis, Missouri-based company partnered with Google to allow its customers to place orders using simple phrases such as “OK Google, ask Panera for delivery,” or “OK Google, talk to Panera.” The service, which uses the Google Assistant’s displays menu, makes suggestions based on order history, walks customers through menu items and enables them to pay with their saved payment methods.

PYMNTS recently caught up with Mark Berinato, vice president of digital experience and design for Panera Bread, to talk about changing consumer expectations and the future of mobile-enabled technology in the QSR industry.     

“The biggest shift in the overall market is [mobile orders] bordering on becoming just a standard consumer expectation for restaurants of all sizes when —  compared to a few years ago — offering mobile ordering was considered a groundbreaking feat,” Berinato said. “It’s especially true for restaurants in our space, when it comes to fast-casual and lunch spots.”

For all the latest findings, analysis and trends, please download the Index by clicking the button below.

About the Index

The PYMNTS Restaurant Readiness Index, a Bypass and Bank of America Merchant Services collaboration, is designed to analyze how QSRs are doing when it comes to innovation. Namely, are they being innovative and are technological features enhancing customer experiences?

To complete the Index, PYMNTS studied 178 QSRs, including six large restaurant chains, in 10 different segments and two groups of restaurants. The bulk of the sample includes 172 restaurants that range from eight to 2,630 locations.

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