How 70% of Restaurants Manage Diner Loyalty and Rewards

Digital channels have provided restaurants — and consumers seeking low-touch access to food services — a means of survival since the pandemic began. Digitization has provided restaurants with powerful tools that allow brands to personalize their customer engagement in ways not previously achievable. Loyalty programs, in particular, benefit from these developments, with technology that reinforces customer retention and increases spending.

These programs are direct pipelines for restaurants to build customer relationships, but most restaurant brands in the United States do not currently offer a loyalty app. Customers are also missing out on the benefits of rewards programs. Recent PYMNTS research shows that just 40% of United States consumers are members of restaurant loyalty programs.

In the June/July edition of the Order To Eat Tracker®, PYMNTS explores the adoption of loyalty programs by table-service and quick-service restaurants (QSRs) and how these programs can bolster customer engagement and restaurants’ bottom lines.

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More consumers than ever are using their mobile devices to engage directly with their favorite brands, including in the restaurant space. A recent report found that 70% prefer managing their loyalty accounts via a mobile app, yet just 26% of brands offer an app with this feature. More than two-thirds of QSR and convenience store brands have adopted auto-enrollment for their loyalty programs into their mobile apps to reduce friction in enrollment.

Numerous QSRs and fast-casual chains are advancing their digital-based loyalty programs and other technologies that connect the physical in-store experience with digital engagement. Sandwich chain Mr. Pickles recently announced it is partnering with Paytronix to implement a comprehensive digital guest experiences platform that reflects the in-person experience better. This includes updating and streamlining onboarding to the Pickle Points Rewards program.

Two more restaurant brands have recently taken similar leaps by partnering with Paytronix. Wow Bao unveiled its new Bao Bucks program, which rewards customers for placing orders directly on the brand’s website. Meanwhile, fast-casual chain Illegal Pete’s launched a new app for its loyalty program that offers more engaging and personalized experiences.

For more on these and other stories, visit the Tracker’s News and Trends.

Capital Tacos on the Need for the Right Technology Stack for Digital Loyalty Programs

Leading restaurants began to shift toward digital loyalty programs long before the pandemic, but the trend has significantly accelerated in the last two years — and keeping up with the competition can be tough. Fast-casual chain Capital Tacos rolled out a highly agile new technology stack in 2021, Josh Luger, the brand’s co-owner and co-operating partner, told PYMNTS in a recent interview.

In this month’s Feature Story, Luger explains that the new digital infrastructure has enabled the company to launch Capital Rewards, a new program that “allows folks to engage as a rewards member however and wherever they are ordering from — in-store, online or on our app.”

PYMNTS Intelligence: Why Restaurants Must Lean Into Digital Loyalty Programs

Digital channels have become the most critical part of the purchasing funnel for many consumers, including when it comes to ordering from their favorite restaurant brands. Increasingly, app-based loyalty programs take center stage in this dynamic, yet many restaurants have been slow to embrace these critical channels and push their adoption with customers.

A PYMNTS survey found that just 44% of consumers said they belong to a loyalty program for at least one table-service restaurant, while just 38% take part in at least one QSR loyalty program — even though much higher shares of consumers identify themselves as having “very” or “extremely” high loyalty levels toward their favorite eateries.

This month’s PYMNTS Intelligence looks at how loyalty programs are essential in maximizing customer engagement.

About the Tracker

The Order To Eat Tracker®, done in collaboration with Paytronix, explores the adoption of loyalty programs by table-service restaurants and QSRs and how these programs can bolster customer engagement and loyalty.