For decades, fast-food chains have chased quick sales with limited-time promotions and products (R.I.P. McDonald’s McPizza and Wendy’s 2012 luxe hamburger with lobster claws and caviar) and revenue-minded marketing intended to drive incremental foot traffic to restaurants.
But with changing consumer tastes for healthier options and new technologies that streamline ordering and delivery, quick-serve restaurants are ramping up their digital game to compete with the slew of fast-casual eateries like Shake Shack, Chipotle and Whataburger.
“Smaller brands are frequently more nimble and able to execute better site merchandising features like nutrition facts and dietary filter than many of the big brands,” said Bill Duffy, associate director of CPG at L2 Research.
Burger chain Whataburger, for example, lets users filter the menu on its website by nutritional and type of sandwich, Duffy noted.
According to data from Deloitte Digital, 40 percent of consumers prefer to order food online. When they place an order from a fast-food restaurant, they spend 26 percent more than they would have in-store, and diners spend 13 percent more when ordering from a fast-casual eatery. Another 40 percent of consumers polled said that they wanted to hear from a restaurant at least once a month, with 80 percent of people specifically interested in receiving discounts and special offers and another 34 percent looking for personalized messages.
To put those stats in perspective, online food delivery sales are expected to reach $55 billion in 2022, up from $20 billion in 2017, according to numbers from investment firm Cowen.
To cut down on lines and wait time, Chipotle revamped its mobile app in November to include a feature that lets users place orders and then pick them up in designated lines inside restaurants. The app also keeps track of recent meals and store coupons. Since revamping the app, the burrito chain reports a 50 percent increase in app downloads and orders, though Chipotle declined to provide specific sales figures.
“Mobile app customers tend to order more often and have a higher average ticket than in-store customers,” said Curt Garner, chief digital and information officer at Chipotle. “Rapid reorder of favorite and recent orders is a great example of one of these features.”
Indeed, mobile apps seem to be key for fast-food brands to turn one-off customers into repeat diners who continually expect new offers from a brand. In a study of 126 restaurants, L2 found that 95 brands—or 75 percent—offered a mobile app.
But not all apps are created equal. In L2’s study, 57 percent of restaurant apps included pick-up ordering while only 33 percent offered coupons that encourage consumers to repeatedly visit, suggesting that building apps with long-term engagement is a challenge.
“The biggest thing is making sure that there’s a consumer need and then getting people to use the technology,” said Kurt Kane, chief concept and marketing officer at Wendy’s. “One of our biggest challenges is that we’ve made analog ordering so efficient that for many people right [out] of the gate, [they] don’t necessarily see a big benefit to using mobile technologies.”
That’s why Wendy’s owns the development and design of its mobile app in-house. Wendy’s operates an innovation center dubbed 90° Labs in Columbus, Ohio, where apps and in-store ordering kiosks are built. Instead of working with an agency or tech vendor to outsource app development, “it allows us to [work] quickly because people who work there understand Wendy’s inside and out,” Kane said. “We don’t have to explain a lot along the way about why we want to do something—it allows us to be streamlined in those communications versus if you had to explain it to an outside partner.”
Wendy’s is now experimenting with adding offers and a loyalty program to its app. During March Madness, for instance, Wendy’s is pushing out discounts for fresh hamburgers via the app as part of its bigger sponsorship as an official partner of the National Collegiate Athletic Association (NCAA). The brand is also piloting a loyalty program that will crank out lots of data—like how often people order or what they order—that Wendy’s can then spin into insights and custom offers.
“A lot of this comes down to doing the basic and simple things really well and in a more efficient way than we may do using other channels,” Kane said.