How QSRs Can Satisfy Customers’ Appetite For Innovation

A quick look at the latest edition of the PYMNTS Restaurant Readiness Index strongly drives home the point that consumers are, pardon the pun, starving for innovation when it comes to their experiences at their favorite quick-service restaurants (QSRs). By the numbers, 81 percent of surveyed consumers reported a positive experience with QSR innovations, 74 percent reported a positive experience with QSRs’ self-service kiosks and 62 percent said innovations would make them more inclined to visit QSRs in the future.

In this week’s Data Drivers conversation, Chief Innovation Officer Geoff Johnson at Bypass told Karen Webster that the race to keep up with the expanding appetite of consumers for a more innovative dining experience in the QSR space has seen a real flurry of different types of activity in the industry, as restaurants in general, and QSR players specifically, are trying to crack the code on how to properly bridge the digital divide.

For example, firms are switching between delivery platforms, looking to get the best pricing and customer coverage. They are tinkering with their operational side and re-evaluating things like their labor configurations. Menu changes and adjustments, he noted, take up a surprisingly large volume of that side.

“You would think it would be easy, [but] actually changing around a menu is one of the hardest things to do in QSRs. It’s something that every big brand has tried to solve, and some have spent hundreds of millions of dollars in custom software going after [that],” he said.

However, Johnson told Webster, the million-dollar question is about experiences and how to build the right one across channels, to keep the customer coming back through the door — and looking for more. That means, he noted, the questions all come back to one thing: data.

Data As The Missing Ingredient

“The starting point of [all this] stuff is data,” Johnson said. “Looking at the menu, the design, what things customers are actually responding to — only when restaurants have really tapped into that and understand it are things really going to be allowed to level up and change quickly.”

Johnson compared the current QSR journey toward digitization to the early days of social media. Even back in the Friendster and Myspace era, there was a feeling that these were the beginning phases of something that would become very powerful, but it wasn’t quite there yet. It took Facebook entering the scene and “solving for some of the nuances” for the market to really open up.

“I think restaurants have something [of a] similar situation in some ways,” he said. “There are still some key things around technology, workflow and function that people are working [out so] that it becomes obvious how everything is supposed to work. But I think it is fair to say no one has quite nailed it yet.”

For that reason, there is still a lot of experimenting going on and some resultant fragmentation. Consumers, he noted, are promiscuous eaters by nature. They don’t favor just one QSR or another and will eat at a variety of places within a week. They’ll also sample along with their food a number of variations on innovations, such as kiosks, kiosks that interact with mobile, mobile-only interfaces — there are all kinds of variations on offer to various levels of effect.

Plus, Johnson added, after a lifetime of working in and around restaurants, there is a point where intuition and unquantifiable parts of the dining experience come into play — not just what a place serves or how it is technologically enabled, but how it feels to eat in a certain place. Technology can enable chefs and restaurateurs to try new things and experiment with engagement. However, having the right feel for how to tie it all together is a separate skill.

What firms like Bypass can and should do, he noted, is help in some way to take tech out of the way so that restaurants can enable any experience they want and make that personal connection with the consumers.

“We have a big view that all the technology should be simpler. A lot of things are heavy; they are very IT-intensive and we think these are the barrier that still need[s] to be broken through,” he said.

Everyone Doesn’t Have To Be Starbucks

It’s easy, Johnson noted, to look at the example of Starbucks and its very successful implementation of its mobile ordering app, and conclude that this is the silver bullet — what everyone has to do. That isn’t always the case, though. It’s not about what works in general. It’s about what works for the individual customer set one serves.

Webster noted that her local coffee shop put mobile order-ahead into place. However, though the shop is popular, the feature doesn’t seem to be. So far, she’s only ever seen one bag on the order-ahead counter — and she’s becoming convinced it is a decoy.

In fact, according to the Restaurant Readiness Index, what customers most want above all things isn’t technological — it’s basic. They want their order to be correct, and they want to know what to expect. That, for large QSR chains with multiple franchise locations, can be a complicated issue. Innovation doesn’t always roll evenly across those chains, which means customers are experiencing inter-brand fragmentation that they aren’t used to handling. That is particularly the case, Johnson noted, when there are multiple locations in various regions with slightly different experiences.

Part of the solution is offering lighter, easier-to-use technology. Franchise locations running on thin margins don’t want to invest and reinvest in new terminals and service packages for technology that is unproven in terms of generating revenue, but definitely expensive on the front end. By making the options lighter, cheaper and more flexible, he explained, franchise locations are more willing to experiment with something different.

“As the technology matures overtime, I think there will be more data [for a] return on investment [ROI], which will also encourage franchisees. But we always encourage corporate stores to go first because, again, it comes back to the data and being able to prove [an ROI], and use that to drive it through the franchise base,” he said.

It’s not rocket science, Johnson concluded, but sometimes it can be an exercise in herding cats.



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