Digital is on the menu
27 May 2022 • 3 min read
The remarkable changes sweeping across Quick Service and Casual Dining Restaurants
Repeatable, dependable, and convenient. For Quick Service and Casual Dining Restaurants, this is what customers expect; no matter the location, time of day or what they order. When a customer visits a McDonald's, they know exactly what to expect, and they reward the brand's consistency, convenience and speed with loyalty.
The same can be said if you visit a Zizzi, PizzaExpress or Pret. Customers' expectations have been formed based on previous interactions; proof that these restaurants can deliver on their promises.
But what happens when you add digital into this experience? In today's environment, Quick Service and Casual Dining restaurants have no choice but to adapt and adopt digital. They are on a journey of transformation, accelerated by COVID-19 and evolving customer behaviour.
The sector was hit hard by the pandemic; with the National Restaurant Association reporting a $240 billion drop in restaurant and foodservice sales, in the US alone. Those that survived the wave of uncertainty had one thing in common: they adapted their business model and adopted technology. Some accelerated the digitisation of their customer and supply-chain interactions by up to four years, a survey by McKinsey revealed.
Digital for restaurants is no longer a back-office function, it is the lifeline and core to their future. This means more software, data and digital products are transforming these brands into being tech-enabled and digitally-led.
When it comes to transformation, we see three key focus areas for quick service restaurants:
- The front door experience: For restaurants, the front door was a physical place. Today it is also digital. The digital product is often the first touchpoint for the customer. The journey to your site or app will be via Googling or clicking on a link via a social channel. Preferences will be quickly formed based on the digital experience of the brand, quality and value.
- Click and convert: Digital products for these brands are designed to convert users, encouraging them to take an action such as ordering an item or booking a table. Journeys must be optimised to make this seamless.
- Repeat customers: Engagement with a brand does not end with the meal. With more data, brands can engage via timely communications and tailored offers - based on contextualised buying behaviour, time of day, location, and recent purchases. Personalisation is key to success.
Yum! Brands - owner of KFC, Taco Bell and Pizza hut - was one of the first fast-food retailers to offer digital ordering, changing the game during the pandemic. That change has stuck around, not only accounting for 40 per cent of current sales – but increasing the brand's pre-pandemic sales by 10 per cent.
What are the blockers?
- Technology: Legacy systems will be a pain point and this will not surprise anyone. The adoption of tech in the industry has been gradual but now requires a quick acceleration to be the first mover or fast follower and retain customers. A US-European survey by Couchbase suggested many of the hurdles ahead for senior IT decision-makers looking to transform. Sixty-one per cent of those surveyed said they found past technology decisions made new transformation projects more difficult, in particular: poor cloud infrastructure (48%), the complexity of implementing technologies (experienced by 31%), and reliance on legacy technology (28%).
- Capabilities: Technology is one component of the transformation: the other key aspect is people. This is about building new cultures and mindsets that can bring new technologies to market, architect the data, design intuitive user journeys and put modern delivery processes and governance in place.
This is where AND Digital sees the biggest possible gains for improving the customer experience, empowering employees, and decreasing marketing and product development costs.
Transformation stirs up thoughts of a long process. We see success is best delivered by starting small, building a proven model and then scaling this across the business as confidence builds.
There are key moments in every industry. We’ve seen them in banking and retail. Now it’s happening in the QSR/casual dining space. And just like banking and retail, customers will reward the brands that satisfy their cravings for digital.
Find out more about AND Digital's experience here