Yum Brands and Others Try New Loyalty Strategies to Outperform Competitors

This week in restaurant news, restaurants are looking to stand out in the crowded loyalty program space. Yum Brands is updating its data capabilities, Kura Sushi is driving rewards program adoption with brand partnerships and Del Taco is taking a page out of DoorDash’s book with its latest loyalty strategy.

Quick-service restaurant (QSR) giant Yum Brands, parent company of KFC, Taco Bell, Pizza Hut and the Habit Burger Grill, announced Thursday (July 6) that it is partnering with analytics platform Treasure Data to boost personalization, a move that is meant to enable the company to be more targeted with its brands’ loyalty programs, among other things.

“This is the latest advancement in our strategy to drive toward enhanced digital experiences and deliver exceptional value to our customers, as the Company remains focused on our vision to have 100% of sales powered by digital,” Yum Brands Chief Data Officer Cameron Davies said in a statement. “Treasure Data’s state-of-the-art [Customer Data Platform] … will enhance both our understanding and engagement with Yum!’s customers, ultimately driving more personalized and unique interactions.”

Certainly, targeting digital interactions based on customer data can boost brands’ marketing effectiveness, and many consumers are looking for this kind of personalization as well.

For instance, a study cited in the latest edition of PYMNTS’ “B2B and Digital Payments Tracker®,” a collaboration with American Express, “Inflation Puts Technology on the Menu for Restaurants,” revealed that 70% of restaurant customers want technologies such as personalized menus incorporated into the drive-thru.

Kura Sushi Drives Rewards Membership With Merch Partnerships

As industry giants are increasing their digital capabilities, smaller brands are challenged to find creative ways to hold their own in the increasingly competitive restaurant loyalty space.

Kura Sushi, a tech-focused restaurant chain with 47 locations in 14 states, reported in its third-quarter earnings call Thursday that it has been able to grow loyalty program engagement through rewards-member exclusive merch partnerships with various media properties.

The company noted that, in the last quarter, it gained about 120,000 members, a considerably large number relative to the size of the chain (more than 2,500 new members per location), with the help of its campaigns to offer exclusive merchandise from different entertainment brands including animated series “We Bare Bears” and manga/anime “Demon Slayer.” The sushi chain offers product giveaways to rewards members who spend a certain amount dining in stores.

“Our ability to attract rewards members materially is a much larger number than we’ve seen in past quarters, and certainly, this would be something that we put into our strategic toolbox,” Kura Sushi president and CEO Jimmy Uba told analysts. “We see a pretty strong correlation between the effectiveness of a brand collaboration with sign-ups, … so a strong collaboration, certainly can fuel membership growth, and that will be one of the ways that we’re determining the effectiveness of these brand collaborations.”

Del Taco Follows in DoorDash’s Footsteps With Summer Deals Event

With DoorDash having recently revived its five-week summer promotion, Summer of DashPass, offering weeks of deals to drive subscription adoption, Del Taco is following in its footsteps, looking to drive rewards program engagement with its Summer of Free initiative.

With this promotion, the QSR chain also offers different deals each week exclusive to members, in an effort to incentivize adoption amid stiff competition from other, comparable brands.

Indeed, loyalty programs have become extremely common among restaurant chains, making it harder for brands to stand out. PYMNTS research from last year’s study “Digital Divide: Technology, Customer Service And Innovation In The Restaurant Industry,” which drew from a survey of nearly 2,400 U.S. consumers, revealed that 44% of chain restaurants offer loyalty programs. Since then, the space has only grown, and that figure would likely be significantly higher today.

Plus, the majority of consumers now use these programs. Research from PYMNTS’ March study, “Connected Dining: Consumers Like the Taste of Discount Meals,” which is based on a February survey of more than 1,800 U.S. consumers, found that 51% reported using a restaurant loyalty program, with 49% participating in these programs at quick-service restaurants (QSRs) and 34% at full-service restaurants (FSRs).