DRIVE-THRU INNOVATION - 2021 & BEYOND Discover the Growing Role of the Drive- thru and the QSR Industry's Shift - Embed Digital

DRIVE-THRU INNOVATION
       2021 & BEYOND
 Discover the Growing Role of the Drive-
    thru and the QSR Industry’s Shift

State of Drive-thru Ordering
The QSR industry realized a 26% increase in drive-thru visits in the second
quarter of 2020, according to research from The NDA Group. Nearly half of

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all quick-service orders were initiated at drive-thrus during that time.

Even as QSRs welcomed customers back to their dining rooms around
July, drive-thru orders continued to thrive with an overall 13% increase in
drive-thru traffic. This increase outranked increases in on-premise/in-
restaurant, carryout and delivery orders.

The Appeal of the Drive-thrus for Customers and Operators Alike
QSR and fast casual customers are generally drawn to convenience, a
seamless ordering experience and prompt service of quality, affordable
meals.

A study by the National Restaurant Association illustrates the growth in
drive-thru ordering pre-pandemic. Over thirty-nine percent of customers
used the drive-thru more in 2019 than they had in 2018. Between 60 and
70-percent of QSR business was being captured through the drive-thru
channel before Covid-19.

NPD food industry advisor, David Portalatin, shared insights with
Restaurant Dive regarding the ROI that restaurant operators are continuing
to see from their drive-thru operations.

The pandemic and resulting lock-downs accelerated the growing appeal of
drive-thrus. According to industry experts, restaurant operator’s interest in
increasing drive thru investments accelerated as well.

“Drive-thru operations are delivering a high ROI during the pandemic,
offering convenience, speed, and the comfort of social distance to
consumers using them.”

Portalatin alluded to the restaurant industry’s acceptance that an innovative
drive-thru experience is the staple of the industry and their individual
brands. “Fast casual and traditional quick service chains have already

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announced expansion plans for their drive thru operations, and more
chains will be doing the same. Drive-thru and other off-premise operations
will be a major part of the U.S. restaurant industry’s recovery and future.”

Customers’ inclination toward a satisfying drive thru experience are
expected to continue post-pandemic. Forty-one percent of consumers
stated their interest in avoiding in-
restaurant dining six-month after the
dining rooms reopen (CivicScience).
Restaurant operators are pivoting to
adapt to these customer attitudes. By
doing so, they are increasing
customer satisfaction, decreasing
ordering times, improving operations
and seeing higher per-order profits.     Figure 1 Waba Grill (Lancaster) Drive-thru menu
                                                  deployed and managed by Embed Digital

Investing in Innovative Drive-Thrus

   ● Shake Shack plans to introduce first drive-thrus for their brand
     (including walk-up menus)
   ● Chipotle announced that it will pivot to include drive thru “Chipotlane”
     formats
   ● Taco Bell is set to open its Go Mobile locations which offers a priority
     lane for pre-ordered meals to supplement its more traditional drive
     thru operations
   ● White Castle will test an AI-based platform at its drive-thrus (Similarly
                                       to McDonald’s move last year)
                                       ● Convenient stores like Wawa are
                                       planning to take a note from the
                                       QSRs drive-thru innovation by
                                       launching their own version
                                       ●                           Wendy’s is
                                       adjusting to the high demand for

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drive-thru service by expanding their drive-up and pick-up delivery
     options without a need for customers to leave their vehicles.

The ROI Impact
Drive-thrus have had a substantial impact on restaurant revenues well
before the pandemic and mandated dining room shutdowns. According to a
Forrester Study commissioned by Samsung:

  ● Restaurant profits increased by $693,201 by implementing strategies
    to serve more customers at the drive-thru each week
  ● Operators who implemented Samsung displays at their drive-thrus
    improved customer throughput
  ● The digital displays also proved a 5.75 percent decrease in drive-thru
    wait times
  ● QSRs employing outdoor digital drive-thru menus noticed a 9.1
    percent increase in drive-thru traffic
  ● Restaurant profits increased by $578,297 as a result of improved
    digital promotions displayed on the menu at their drive-thrus
    (Conversion rates on promotional items increased by 2 percent)
  ● Increased order sizes are a proven result of digital drive-thru menus
    and dynamic menu content (average profit of $161,442)
  ● Average order values increased by 2.5 percent after digital menus
    were installed at the drive-thru
  ● Labor costs are reduced by as much as $1,047,504 by digitizing
    outdoor menus
  ● Food waste costs are also impacted by digital drive-thrus ($12,295
    savings from increased order accuracy; Food waste reduced as much
    as 5%)

The Next Step for QSRs and fast casuals to better serve and capitalize
Digital menus enable restaurants to digitally transform their menu content
to drive increased sales and profitability. By leveraging dynamic content
and digital menu hardware designed specifically for drive-thru operations,

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brands can effectively increase drive-thru traffic, average order size, and
promotional item conversion.

QSRs can begin calculating the decrease in operating costs by achieving
economies of scale. This is achieved by an ability to control and validate
menu-board data electronically from a single, remote point. As a result,
operators can forecast a reduced labor requirement on field marketing
teams and restaurant management.

Next steps in planning start with a discovery period in which brand
executives consult with experts in digital menu and digital drive-thru
innovation to determine the specs and brand-standards for their drive-thru
ordering experience. A team of professionals offering turnkey solutions can
provide estimates for comparison. A turnkey partner will provide targeted
solutions including any of the solutions necessary:

   ● Hardware
   ● Consultations
   ● Procurement and programming of hardware
   ● Installation
   ● Remote management
   ● Menu strategy and design
   ● Development of menu templates with access to select, editable
     content
   ● Updates to menu layout or content
   ● Consultation on additional digital signage strategies

They will also assist as you navigate cost, ROI and KPI analysis.

Things to consider:
  ● Drive-thru layout that meets your brand’s needs
     (efficiency, customer experience, etc.)

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● Outdoor messaging and promotions strategy to connect with
  customers through digital content and promotions throughout the
  drive-thru journey
● Hardware requirements
  (hours of operation for brightness and brightness-adjustments
  planning, menu and promotional sign sizes and clarity, etc.)
● Menu design operations
  (Developed by in-house marketing teams or by professional menu
  designers with consideration for your brand standards)
● Menu update requirements
  (Frequency of menu updates, location-specific updates, complexity of
  updates, central location for menu management, need for strategic-
  menu hosting and creative, etc.)
● Menu Content Control - Protected Access
  Will franchisees or General Managers update menu content? Will
  franchisee’s need limits on specific menu content? Identify users who
  will need access to the content management system. Evaluate the
  need for menu management support from a professional digital
  design team.
● Timeline for Deployment
  Pilot approach adding new location updates in queue vs. scaled role-
  outs with multiple installs occurring at once
● Communication through Project Implementation Phase
  Identify brand representatives who will need direct communication
  with any partners.
● Routine KPI Reviews and ROI analysis Comparison of results
  against KPIs. Ongoing planning and communication to accelerate
  deployment or improve ROI. Consideration of project expansion
  (indoor, on-premise digital promotions, point-of-sale promotions,
  outdoor billboards, and more)

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About Embed Digital
Our team works closely with brands to define goals & objectives to apply
our talents toward your vision to build beautiful, compelling digital displays
that attract attention, involve your audience and motivate them to take
action. Contact us for a consultation.

See some of our digital display deployments for our restaurant partners:

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