Independent QSRs Risk Falling Behind in Restaurant Industry’s Digital Shift

QSRs Risk Falling Behind Amid Digital Shift

It is no great shock that major restaurant brands are more technologically advanced than their small- to medium-sized business (SMB) counterparts, with the former having more resources at their disposal to control their digital platforms and invest in omnichannel growth. However, what may be more surprising is that, among independent establishments, quick-service restaurants (QSRs) are behind those with table service in adapting to the new normal.

For the Restaurant Friction Index (RFI), created collaboration with Paytronix, PYMNTS researchers surveyed more than 500 managers of full-service restaurants (FSRs) and QSRs across the United States about their existing ordering, payment and fulfillment features and about their plans for the future, assigning each an RFI score. This quantitative measure scored establishments on how “innovation-ready” they are and how quickly and seamlessly their customers can place their orders and acquire their food.

Read more: How Eateries Can Tap Order Throttling Tools as Delivery Demand Grows

The study found that chain restaurants outperform independents, as is to be expected. Quick-service chains perform the best, receiving an average RFI score of 56.7, more than 40% higher than the restaurant industry average. The chain table-service restaurant category, meanwhile, scored 46.4.

For independents, on the other hand, the hierarchy between quick-service and table-service eateries is flipped, with table-service restaurants outperforming their quick-service counterparts. Independent table-service establishments scored 26.5, dramatically lower than their multi-location equivalents, while independent QSRs lagged those in all other categories with a score of 23.6.

The study identified a range of digital features that independent QSRs are less likely to offer than all other restaurants. They are less likely to offer mobile ordering for pickup, to offer online ordering with in-store payment, to offer coupons, to save consumers’ payment methods and to provide visibility into the stock level of all usual menu items, among other features.

These disparities can have a major impact on customers’ loyalty, given their increasing expectations of digital convenience.

“Consumers aren’t just constrained to food ordering for eCommerce,” Olo CEO Noah Glass told PYMNTS in an interview. “They’re also using platforms like Shop Pay. They’re also using Amazon.com. They’re used to having frictionless payment experiences. The status quo for ordering from restaurant brands’ sites, where the digital order provider is a gateway into a credit card processor really meant for in-restaurant card swipes that doesn’t have to operate in a consumer-facing layer … that’s no longer a good enough solution.”

See more: Removing Payment Friction Equips Restaurants to Compete With Aggregators

Indeed, the RFI’s survey of a census-balanced panel of more than 2,100 U.S. adults found that many consumers (40% of them) said that, if a restaurant offered the ability to order online, they would be more inclined to make purchases from that restaurant. Additionally, 37% of consumers said the same of the ability to pick up orders without standing in line.

“Now that customers are more comfortable with contactless purchasing methods, their expectations have risen,” Kim Lewis, vice president of Integrated Marketing and Communications at 3,500+-location QSR chain Sonic, told PYMNTS in an interview for the February edition of the Order To Eat Tracker, created in collaboration with Paytronix. “A clunky experience may have been OK in early 2020, but the process must now be quick, seamless and intuitive, or customers will move on.”

Read more: Sonic Leans on Mobile and Order-Tracking Features to Keep Customers Coming Back