Report: Mobile Innovations Now the Centerpiece Of QSR’s Digital Strategy

If restaurants want to attract and keep customers, the best way is to optimize their digital strategies, according to research from the U.S. Census Bureau. The federal agency reported that consumers spent more than $211 billion online during the second quarter of 2021. That’s a nearly 32% increase from the first quarter of last year.

Not surprisingly, the sector has experienced widespread adoption of strategic digital tools designed to drive profits and maintain existing patrons. There’s evidence that restaurants earn as much as 40% of their total revenue from repeat business. The cost of obtaining new customers is nearly 30 times more than keeping existing customers content.

The October edition of the Order To Eat Tracker® examines the latest order to eat developments, including how restaurants can leverage mobile apps and loyalty programs to suit customers’ newfound digital tastes.

Around the Order to Eat Landscape

Nearly 60% of digital orders were placed via mobile app, according to a study of more than 4.3 million restaurant orders during the past 18 months. Researchers polled restaurants that offer digital technology to order online and by app. The survey said there has been an increase in on-premises ordering, but digital revenue still accounts for 50% of total restaurant sales. Digital sales are expected to remain a crucial channel for restaurants post-pandemic, the study concluded. Eateries without a mobile app could be missing out on a major source of revenue, given it’s the way diners prefer to order and pay.

Some restaurants have begun to experiment with subscription programs to drive customer spending and boost loyalty. Fast casual giant Taco Bell, for instance, launched a 30-day trial for a subscription service at locations in Arizona. The Taco Lover’s pass allows users to pay between $5 and $10 per month to access exclusive perks and receive a free taco each day. The outcome could provide further proof that subscription services hold value in the fast casual restaurant space.

As the economy recovers, labor costs are rising, supply chains are facing limited supplies and the food sector is up against a dramatic rise in inflation. A survey of two dozen restaurants found that 70% raised prices in 2021. At 6%, quick-service restaurants (QSRs) are seeing the largest hikes, compared to 3% at fast casual chains and just 1% at casual dining establishments. While the pandemic has fueled a reliance on quick and inexpensive meals, rising prices could pose challenges. The Wall Street Journal reported that some restaurants are mitigating price hikes by changing their menus to lower overhead costs.

For more on these and other stories, check out the Tracker’s News & Trends section.

Blaze Pizza on Firing up Mobile-First Experiences That Go Long on Loyalty

It’s been 19 months since the pandemic altered the hospitality sector. Restaurants met the demand for contactless orders and payments and updated loyalty programs to survive. What appeared once to be a convenience has now become an essential way to do business.

Blaze Pizza, a fast-fired pizzeria with 335 locations worldwide, said it has adjusted. In this month’s Feature Story, Vincent Szwajkowski, the company’s brand and growth leader, said the chain’s digital business was in the single digits pre-pandemic. The digital shift for Blaze was swift, as its digital business grew by 150% in a week.

Deep Dive: Taking a Holistic Approach to Driving Restaurant Spending

The pandemic shifted the adoption of digital tools for consumers and businesses into high gear, with an estimated five years of contactless innovation compressed into two months. Restaurants were in the mix as they sprinted to update platforms to meet evolving customer expectations and maximize profits.

This month’s Deep Dive explores how loyalty programs have emerged as a defensive strategy amid surging digital adoption. Instead of surrendering potential customer data to third parties, many brands have embraced their own loyalty programs to ensure the control of customer data.

About the Tracker

The monthly Order To Eat Tracker®, a PYMNTS and Paytronix collaboration, offers coverage of the most recent news and trends in the restaurant ordering ecosystem.