Taco Bell's Strategy To Help Customers Own Their Ordering Experiences - PYMNTS.com
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FEATURE STORY – PAGE 9
Taco Bell’s Strategy
To Help Customers
Own Their Ordering
Experiences
NEWS AND TRENDS – PAGE 13
Study finds 90 percent of consumers are unwilling
to wait 10 minutes or longer for food ordered
through apps
DEEP DIVE – PAGE 18
How third-party delivery app partnerships create
new challenges for QSRs
OC TO B E R 2019
04 What’s Inside
Several restaurant brands embrace third-party delivery
partnerships to meet consumers’ expectations
09 Feature Story
Rafik Hanna, Taco Bell’s senior director of digital technology,
discusses how the rollout of self-service kiosks at more than
6,600 locations and a partnership with Grubhub will help the
chain deliver enhanced omnichannel experiences
13 News & Trends
The latest headlines on how restaurant and QSR players are
embracing new technologies to reinvent their rewards and
loyalty experiences and connect with consumers
18 Deep Dive
An in-depth look at the potential benefits and unexpected
consequences restaurants face when working with third-party
delivery apps
21 About
Information on PYMNTS.com and Paytronix
Acknowledgment
The Order To Eat Tracker is done in collaboration
with Paytronix, and PYMNTS is grateful for the
company’s support and insight. PYMNTS.com
retains full editorial control over the following
findings, methodology and data analysis.
W H A T ’ S I N S I D E
The United States restaurant market appears to be fac- THE LATEST HEADLINES FROM
ing a bright future. Industry sales have seen a 4 percent AROUND THE SPACE
increase so far this year, and trade group the National Many restaurants are turning to mobile-based loyal-
Restaurant Association expects overall sales to reach ty programs to secure customers’ allegiances. QSR
$863 billion by year’s end. As competition in the space chain Boston Market recently debuted its Rotisserie
heats up, many restaurants are recognizing that they Rewards loyalty program through its mobile app. The
must offer new options to satisfy customers’ cravings program gives online and mobile customers one loy-
for convenience. alty point for each dollar spent at its restaurants, and
these points can be redeemed for free food or even full
Recent data indicates that food delivery will become
meals that can feed multiple guests. Boston Market is
a significant part of many restaurants’ earnings, with
hoping the new program will encourage users to place
a projected compound annual growth rate (CAGR)
orders through its app rather than through third-party
of 6 percent by 2023. Many fast-casual eateries and
delivery services.
quick-service restaurants (QSRs) are partnering with
third-party delivery apps to cater to customers where Delivery service provider Grubhub is also taking a page
they are — specifically, their homes. out of the loyalty rewards playbook. The platform re-
cently launched Perks, a loyalty system that offers
Several large restaurant chains have heard the mes-
customers redeemable points that can be used through
sage and are using delivery services to provide such
the Grubhub and Seamless delivery apps. The pro-
offerings. Artisan pizza chain MOD Pizza recently
gram offers free food from chains like Taco Bell and
tapped delivery platform DoorDash to be its exclusive
Red Lobster.
delivery partner, and fast food giant McDonald’s be-
gan testing a new delivery partnership with Grubhub at Restaurant chain Big Boy is experimenting with a new
approximately 500 of its New York City-area locations. fast-casual dining prototype in Southfield, Michigan,
Not every major chain is eager to partner up, however. that eliminates sit-down service. Customers will instead
Domino’s has made it clear that it is unwilling to bend to place orders through counter menus and enhanced on-
third-party delivery app competition — at least for now. line and mobile ordering capabilities. The new concept
restaurant, which also eliminates tipping for servers, is
Delivery is not the only way restaurants are connecting
geared toward younger consumers who do not have
with consumers, though. The industry is also embracing
time for sit-down dining experiences.
loyalty and rewards programs as well as new ordering
solutions to enhance customers’ experiences.
© 2019 PYMNTS.com All Rights Reserved | 5
W H A T ’ S I N S I D E
Learn more about how the restaurant industry is em-
bracing new store models, loyalty programs and
delivery partnerships in the Tracker’s News and Trends
section (p. 13).
Executive
INSIGHT
TACO BELL RINGS IN A NEW
OMNICHANNEL ERA
Many restaurants are learning that they must meet
customers’ expectations regardless of which chan-
Consumers can place food orders using
nels they use to place orders. Even larger QSRs, like voice technology from brands like Domino’s
Mexican-inspired food chain Taco Bell, are investing in and even facial recognition solutions from
new technologies and ordering experiences to please restaurants like CaliBurger. How do you
expect such technologies to change the ways
patrons who are used to speed and convenience. In
consumers order food?
this month’s Feature Story (p. 9), Rafik Hanna, senior di-
rector of digital technology at Taco Bell, explains how
“Facial recognition is an ideal way to identify and authen-
the restaurant is utilizing digital self-service kiosks ticate an individual. The iPhone X is already employing the
and its delivery partnership with Grubhub to provide technology, and consumers are being trained to accept
more seamless and personalized experiences for both it. Since there is no physical interaction required by the
in-store and remote customers. end user, the technology could be deployed at drive-thrus,
within cars and … in other hands-free ordering and identi-
fication situations.
DEEP DIVE: THE PROS AND CONS
OF THIRD-PARTY DELIVERY The ways consumers can place food orders will move as
PARTNERSHIPS fast as technology does. Facial recognition is the future.
We are working on technology right now that will enable
Third-party delivery apps such as DoorDash, Grubhub brands to recognize their best customers both in-store
and Uber Eats are in high demand as customers seek and virtually so that they can deliver top-notch experienc-
to enjoy meals from their favorite fast food restaurants es akin to those they delivered as single-unit operators
— at scale.
and QSR brands. Many restaurants work with such de-
The QSR business model relies on fast, convenient trans-
livery services to more easily reach their consumer
actions. With facial recognition, we envision a world where
bases, but these partnerships can present their own is-
consumers are recognized at the point of sale, can quickly
sues, such as high order volumes. This Tracker’s Deep reorder past favorites and — with AI — will be prompted [to
Dive (p. 18) highlights the benefits and challenges that view] cross-sell items that make sense, thereby increas-
restaurants and QSRs face when using third-party de- ing basket size. There’s so much at stake here that larger
brands have invested in or acquired tech companies to
livery services.
stay ahead of the competition. We’re bringing that same
technology to medium [and] large chains.”
TIM RIDGELY
head of order and delivery at Paytronix
6 | © 2019 PYMNTS.com All Rights Reserved
BUILDING CUSTOMER PROFILE
ACQUIRE ORDER EAT
CUSTOMERS
IN OUT
WEB APP STORE RESERVATION DELIVERY
PAYMENT REWARD REDEEM
IDENTIFY
PREFERENCES
PROMPT ANTICIPATE TARGET OFFERS
REORDER
One-to-one offers via email • SMS • In-app messages • Push notifications • Geofencing
© 2019 PYMNTS.com All Rights Reserved | 7
W H A T ’ S I N S I D E
44M 31.76%
Projected number of U.S. Estimated annual growth
smartphone users who rate of the global on-
will utilize third-party demand food delivery
food delivery apps by market from 2017 to 2021
2020
80% $863B
Anticipated rate of the Predicted value of
restaurant industry’s restaurant industry sales
off-premises spending by the end of the year
growth by 2025
6.5%
Projected CAGR of online
food delivery revenue
FIVE
FAST
from 2019 to 2023
FACTS
8 | © 2019 PYMNTS.com All Rights Reserved
SOURCE: Taco Bell
Taco Bell’s Strategy To Help Customers
Own Their Ordering Experiences
Digital self-service kiosks and delivery options could in its network. Rafik Hanna, Taco Bell’s senior direc-
help restaurants provide the seamless ordering expe- tor of digital technology, said these investments are
riences customers expect from their favorite brands. geared toward improving ordering experiences for both
Several major QSR chains — such as McDonald’s, in-store and remote customers. Hanna recently spoke
Panera Bread, Subway and Wendy’s — have recent- with PYMNTS about how self-service kiosks and the
ly stepped up their investments in self-service kiosks company’s Grubhub partnership are modernizing Taco
at their brick-and-mortar locations and have partnered Bell’s ordering options and providing insights into cus-
with delivery platforms like DoorDash, Postmates and tomers’ expectations.
Uber Eats to increase their order volumes.
ENABLING CUSTOMERS TO ‘OWN
Taco Bell is also pursuing solutions to improve cus- THEIR ORDERING EXPERIENCES’ WITH
tomers’ in-restaurant and home delivery orders. The SELF-SERVICE
chain expanded its partnership with delivery service Taco Bell rolled out its first self-service kiosk in 2015 and
provider Grubhub earlier this year and is planning to in- has since worked to offer the technology at additional
stall self-service kiosks across the 6,600 restaurants
10 | © 2019 PYMNTS.com All Rights ReservedF E A T U R E S T O R Y
locations. The company plans to install them at all of its The kiosks not only promote new menu items and spe-
stores by the end of the year. cialized foods, but they are also more inclusive. They
offer multiple language options and are equipped with
The kiosks feature 22-inch touch-screen monitors that
Americans with Disabilities Act (ADA)-compliant fea-
allow customers to quickly place their orders and pay
tures that allow visually impaired users to plug in
via credit cards, debit cards, gift cards and mobile wal-
headphones and navigate the interface using audio cues.
lets. They can also check out with sales associates if
they want to pay with cash. Hanna said that Taco Bell’s
DELIVERING FOR HOME-BASED
customers greatly approve of the kiosks, which help CUSTOMERS
them more easily discover menu items and place per-
The company also partnered with Grubhub to smooth
sonalized orders.
its remote customers’ ordering experiences. The col-
“Kiosks really help our customers to own their ordering laboration began in 2018 and was expanded nationwide
experiences and make it easier to customize food the earlier this year.
way they want it,” Hanna said.
“Consumers want what they want when they want it
Kiosks are particularly beneficial to the chain’s vegetar- and where they want it,” Hanna explained, adding that
ian patrons, who can use them to filter out meat-based the move was crucial to providing improved ordering
menu items or order popular items and substitute meat experiences.
ingredients with vegetarian options, like beans.
The partnership saw the two companies work to in-
“With people trying to eat healthier, what’s super clear tegrate Grubhub into Taco Bell’s point-of-sale (POS)
for us is, with our kiosks, there is no easier way to order system. The solution utilizes geofencing capabilities
vegetarian,” he said. that alert restaurants when Grubhub delivery drivers
© 2019 PYMNTS.com All Rights Reserved | 11F E A T U R E S T O R Y
are nearby, allowing kitchen staff to prepare meals with-
in minutes so that customers will receive fresh orders. Under The
ON THE OMNICHANNEL ROAD
Taco Bell is exploring other opportunities to further en-
HOOD
hance customers’ ordering experiences, regardless of Rafik Hanna, senior director of digital
which digital channels they use, Hanna noted. It is also technology at Taco Bell, explains how
the chain decides which technologies to
beginning to invest in and test digital menu boards to
invest in as it pursues a more seamless
offer drive-thru customers more seamless ordering
omnichannel experience.
experiences.
“In the past few years, there’s been so much change and “We’re doing a lot of things. We talk to customers all
digitization of that customer experience in restaurants,” the time, we do focus groups, learn what they like
Hanna stated. “We’ve been really intentional about about Taco Bell and our ordering experience and how
making a dramatic shift to make Taco Bell experienc- can we modernize it make it relevant for them. We
es more digital.” are always watching emerging trends, as many large
competitors are doing in the space.
These efforts are also geared toward smoothing kitch-
en operations and helping team members tasked with We are also keeping a pulse on [which technolo-
fulfilling these orders. gies are ripe for investment] now and [which] could
be really big ideas but aren’t ready to leverage for
“We are becoming [an] omnichannel company like a lot
our restaurants at this time. [This involves a] lot of
of top retailers out there, and we’re going to see that
analysis and assessment of what makes a great
growth and modernization of our brand continue,” he
experience because we don’t [want to invest in] tech-
said. “We want to meet the customers where they
nology for technology’s sake.
want to be.”
The right solution can actually solve problems and
Digitization and modernization mean customers can
make things better for customers and team mem-
place orders from almost anywhere, and QSRs must be
bers. There’s a lot of change happening in our
ready to seamlessly fulfill their requests across a wide
restaurants. We’re making investments to improve
range of channels. Digital self-service kiosks and deliv-
the team members’ experiences, and we’re making
ery partnerships are likely to play big roles in helping
investments to improve customers’ experiences.
customers find their ideal ordering experiences.
Ultimately, we need to make the right investments
and build a connected restaurant as opposed to do-
ing these projects that are point solutions to solve
different challenges. Building that connection is
the hardest part, but it’s also the biggest opportu-
nity for us.”
12 | © 2019 PYMNTS.com All Rights ReservedN E W S & T R E N D S
Delivery innovations contributed to the declining same-store sales the chain
experienced last quarter. Domino’s has made a few
and changes moves to counter such competition, however, includ-
MOD PIZZA PARTNERS WITH ing partnering with an electric bike company to offer
DOORDASH FOR ONLINE, MOBILE deliveries.
DELIVERIES
It is expected that 44 million consumers will be using MCDONALD’S TESTS GRUBHUB
PARTNERSHIP IN NYC
third-party delivery apps by 2020, leading many restau-
rants and QSRs to partner with platforms that support Fast food company McDonald’s is forging addition-
fast online delivery orders. National fast-casual chain al third-party partnerships in a few new markets. The
MOD Pizza recently announced an exclusive partner- global chain is trialing a collaboration with Grubhub at
ship with third-party food delivery service DoorDash, about 500 of its New York City-area locations, accord-
enabling on-demand deliveries for nearly 85 percent ing to a company statement. The move follows news
of the former’s dining locations. The pair launched the from earlier this year that McDonald’s had entered into
collaboration with a promotion that included free deliv- a partnership with DoorDash in Houston, Texas, which
ery for all first-time users. The move is important for it plans to expand to more than 10,000 restaurants na-
DoorDash, which is facing increasing competition from tionwide. There is no word yet on whether McDonald’s
other third-party apps such as Grubhub. has similar expansion plans for its Grubhub team-up,
but the chain has been working with delivery app Uber
THIRD-PARTY APPS PUT PRESSURE ON Eats — its first third-party delivery partner — for over
DOMINO’S two years.
The on-demand food delivery market is expected to
grow at a rate of 31.76 percent until 2021, but pizza
chain Domino’s is not ready to share the delivery spot-
Mobile delivery and
light. The company currently has no plans to partner virtual restaurants
with third-party delivery apps, though a recent state- BON APPETIT, GRUBHUB LAUNCH
ment from CEO Ritch Allison noted that competition VIRTUAL RESTAURANT FOR DELIVERY
has put pressure on the pizza giant. He said the com- ORDERS
pany’s own delivery experience remains strong without Restaurant industry sales have reached $863 billion
any third-party assistance, but he does not expect the so far in 2019, but operating costs remain high. Online
pressure to let up anytime soon. delivery is making it possible for some eateries to for-
Other company executives have made it clear that go physical locations, however. Food magazine Bon
Domino’s is not immune to third-party delivery com- Appetit and Grubhub have designed a ghost kitch-
petition, and Uber Eats and similar services may have en that will fill only online delivery orders and feature
14 | © 2019 PYMNTS.com All Rights ReservedN E W S & T R E N D S
popular dishes from the former’s magazine and on its apps, and deliveries are currently supported through
Instagram feed. Consumers will be able to order lunch DoorDash, GrubHub, Postmates and Uber Eats.
and dinner items online through the Grubhub app.
STARBUCKS NOW EXPANSION GETS
The concept restaurant does not offer a sit-in din- PICKUP STORE IN NYC
ing option but restaurant group Lettuce Entertain You
Starbucks recently announced that it will launch a new
Enterprises will provide a virtual storefront. The com-
Starbucks Now store in New York City following the
panies will roll out the offering in Chicago, skipping the
first-ever Now location’s July opening in Beijing. The
initial operating costs of opening a physical location
concept streamlines experiences for customers who
while testing out consumers’ receptivity. There is no
are more familiar with mobile ordering and online de-
word yet on whether the pair will offer the ghost kitchen
livery, using the store as a prime location for coffee
service in additional markets.
and food deliveries as well as mobile order pickups.
Starbucks Now will still offer traditional in-store ex-
FATBURGER TO USE LA LOCATIONS
AS HURRICANE GRILL & WINGS GHOST periences, allowing consumers to place orders with
KITCHENS baristas.
Other restaurants are approaching the virtual store con- The NYC Now location is currently in development and
cept a little differently. QSR chain Fatburger will utilize will be located in Manhattan. Similar stores are being
15 of its Los Angeles-area restaurants as ghost kitchens planned for other U.S. cities including Boston, Chicago,
for its sister brand, Hurricane Grill & Wings. FAT Brands Los Angeles, San Francisco and Seattle.
restaurant company owns both QSRs, and cooks at par-
ticipating locations will be trained to make dishes that
can be found on either menu, according to compa- Reward and loyalty
ny statements. The move effectively consolidates the challenges
brands without requiring FAT Brands to pay for addition-
DELIVEROO LEAVES GERMANY
al storefronts.
AMID COMPETITION FROM JUST EAT,
Off-premises spending is anticipated to account for TAKEAWAY
up to 80 percent of the restaurant industry’s growth Third-party delivery apps are facing more competition
by 2025, and virtual kitchens might play a role in its than ever, which is part of why United Kingdom deliv-
progress. FAT Brands’ kitchen experience is currently ery service Deliveroo has withdrawn from the German
available only to consumers in Los Angeles, and the vir- market. The app began operations there in 2015, even-
tual Hurricane locations will initially limit the selection tually serving consumers in Berlin, Cologne, Frankfurt,
of items available for online ordering. Consumers look- Hamburg and Munich. It announced its decision to
ing to take advantage must order through third-party leave in August, adding that it will instead focus on
© 2019 PYMNTS.com All Rights Reserved | 15N E W S & T R E N D S
other European markets and its expansion efforts in apps. The former will use the loyalty system to connect
the Asia-Pacific. This is the first time Deliveroo has consumers with local restaurants and brands, offer-
left a market. ing free products from chains like Taco Bell and Red
Lobster. Participating restaurants can also utilize Perks
A company statement revealed that it has not com-
to promote themselves on Grubhub’s marketplace,
pletely ruled out a potential reentry into Germany, but
providing free items or other rewards to repeat din-
it is facing growing competition from apps like Just
ers, according to a statement from Grubhub CEO and
Eat and Takeaway. The move surprised some in the in-
founder Matt Maloney. The company’s loyalty offering
dustry, however: Deliveroo closed a $556 million USD
comes as competition among online delivery providers
funding round from eCommerce company Amazon pri-
increases, with Just Eat, DoorDash and others adding
or to the announcement.
new partnerships and features to their apps.
GRUBHUB CREATES PERKS LOYALTY
SYSTEM TO PROMOTE APP USAGE BOSTON MARKET OPENS NEW
LOYALTY PROGRAM ON ITS
New markets offer access to new customers, but MOBILE APP
restaurants and third-party delivery apps must work to
Mobile loyalty and rewards offerings are becoming
retain them. Grubhub recently announced a new loyal-
increasingly popular ways to help restaurants re-
ty system, Perks, which will provide redeemable loyalty
tain customers. Fast-casual chain Boston Market has
points to those who use the Grubhub and Seamless
16 | © 2019 PYMNTS.com All Rights ReservedN E W S & T R E N D S
officially debuted its new Rotisserie Rewards mobile among them. The chain has created a prototype restau-
loyalty program, enabling users to interact with the sys- rant in Southfield, Michigan, that removes the sit-down
tem through its iOS and Android apps as well as online. experience and in-person servers, meaning visitors do
Customers earn one loyalty point for every dollar spent not have to tip. The new model allows customers to
on the app, and the points can be translated into re- place orders with staff at the counter as well as through
wards that range from free side dishes to holiday meals enhanced online and mobile ordering.
for up to 12 guests. Boston Market hopes that its loyalty
The move allows Big Boy to focus on younger diners
program will entice users to order through its branded
and professionals who no longer have time for sit-down
app rather than use third-party delivery services that of-
meals, according to a company statement, with the
fer competing food options.
concept restaurant designed to meet modern consum-
ers’ needs as their eating habits evolve. The restaurant
P.F. CHANG’S LAUNCHES NEW
MOBILE APP, FORMS NEW REWARDS group has not yet shared specifics on how its online
PARTNERSHIP and mobile ordering experiences will look or which fea-
QSR chain P.F. Chang’s recently released a new mobile tures they will provide.
app to help improve customers’ ordering experiences,
RESTAURANTS CLAIM GOOGLE’S
allowing them to place and pay for delivery and pick-
‘ORDER NOW’ FUNCTION IS EATING
up orders. The solution also enables customers to INTO PROFITS
enroll in the chain’s rewards program, redeem promo-
Restaurants are protesting a function Google launched
tions and rewards and save and reorder favorite items,
in May that allows consumers to order directly from
among other features. P.F. Chang’s also transitioned
the search engine using an “order now” button. The for-
its rewards program to the Paytronix platform, which
mer are claiming the button is misleading customers
will allow it to gain deeper data insights into customers’
by bypassing certain payment methods, which can sig-
preferences and behaviors and find new opportunities
nificantly drain revenue. In many cases, the button links
to improve their experiences.
to payment options provided through third-party apps
such as DoorDash or Postmates, which can charge
Payment news and commissions of up to 30 percent for deliveries.
online ordering Restaurants are also arguing that the button is harm-
trends ing their abilities to gain and retain customers, as users
are likely to assume it is displaying all delivery options
BIG BOY DEVELOPS FAST-CASUAL
when it is not. They also argue that the button is creat-
PROTOTYPE FOR MOBILE, ONLINE
ORDERING ing confusion for customers who may encounter fees
for online orders at restaurants that previously offered
Restaurants nationwide are working to entice custom-
free deliveries.
ers to use their services, and Big Boy restaurant group is
© 2019 PYMNTS.com All Rights Reserved | 17Third-Party Delivery Apps Face
Growth Challenges
Delivery rushes can overwhelm restaurants and QSRs, DELIVERY CHALLENGES AND
but accepting food delivery orders online via third-party INNOVATIONS
applications can provide critical relief. Such apps are Online ordering and deliveries no longer represent a
becoming essential for restaurants as they serve cus- small segment of the restaurant experience, as 63 per-
tomers who are now spending more on prepared food cent of all restaurant traffic now occurs off-premises.
and deliveries than they are on groceries. This means a growing number of consumers’ first
experiences with restaurants are enabled through mo-
Home delivery is expected to grow about 6.5 percent
bile apps.
per year by 2023 as consumers become more famil-
iar with online and mobile ordering. Delivery customers Third-party apps are responsible for a significant por-
also expect their food to arrive as soon as possible, and tion of this. Spending on apps like Grubhub has
many restaurants are partnering with third-party deliv- increased 200 percent per year in Atlanta alone, with
ery applications such as DoorDash or Grubhub to offer millennial consumers leading the charge. Partnering
the convenience customers seek. Despite these ser- with third-party apps thus comes with clear benefits for
vices’ benefits, partnering with them does not eliminate restaurants, but these shifts also come with drawbacks.
all of the problems restaurants face, and such collabo-
Restaurants must consider costs when choosing
rations can create challenges of their own.
third-party delivery partners, as apps can charge fees
Restaurants using third-party delivery apps must between 20 percent and 30 percent. Such costs can
balance concerns such as delivery speed and custom- take sizable chunks out of restaurants’ profitable earn-
er satisfaction with significant boosts in order volumes ings, especially those of smaller eateries that do not
that such apps usually create. These restaurants must have the option of hiring their own delivery drivers due
consider higher food and labor costs as well as an in- to budget constraints.
creasing number of regulations. Growing competition
Larger restaurants and chains are responding to this
among third-party apps themselves can also affect
challenge in different ways. Fast food brand Jimmy
customer retention: DoorDash, Grubhub and Uber Eats
Johns is rejecting third-party delivery entirely and is in-
are all fighting for the same customer bases. These
stead relying on its own drivers, while Panera Bread has
consumers are increasingly inclined to relate the quali-
come up with a hybrid approach. The latter’s custom-
ty of their delivery or dining experiences to these apps,
ers can order its food through third-party apps, but the
too, making it crucial that restaurants partner with the
chain’s own drivers items will deliver the items.
right third-party platforms.
© 2019 PYMNTS.com All Rights Reserved | 19D E E P D I V E
Restaurants of all sizes must deal with other challeng- services are likely to have a larger stake in the market
es, too, including the sheer volume of orders enabled over the next few years.
through third-party apps. This can overwhelm restau-
rants’ kitchens, forcing them to spend equal amounts THIRD-PARTY COMPETITION AND ITS
EFFECT ON THE RESTAURANT WORLD
of time and energy fulfilling orders for both in-house
and home-delivery customers. Some owners describe The third-party delivery space is growing rapidly. Both
the experience as running two separate businesses Grubhub and Uber Eats reported earnings of more than
simultaneously. $5 billion in 2018, with the latter looking to grow its food
delivery revenue to $10 billion this year. Such growth
These partnerships can also cause restaurants to see
means new challenges for the restaurants that are part-
reductions in brand awareness, as customers are in-
nering with these services, however.
teracting only with third-party branding. This can be
detrimental to new restaurants attempting to grow their These restaurants must consider which apps will see
consumer bases and cause problems if third-party ser- continued success and which the competition will out-
vices offer subpar experiences. pace. The prevalence of third-party apps is pushing
more chains and QSRs to consider ghost restaurants,
Customers expect to receive their food as quickly as
which do not have dine-in locations and instead sole-
possible, but third-party apps can take as long as 45
ly offer deliveries.
minutes to deliver a single order. These extended time
periods can result in food deliveries that are either too Virtual restaurants are slowly but steadily grow-
cold or too warm, which may contribute to less-than-ide- ing, speaking to the ease with which customers order
al customer experiences. Customers are nevertheless through mobile delivery apps. Third-parties will contin-
more likely to order through third-party apps when it ue to play a large role in the space in the future, but
comes time to deliver, however, meaning that these restaurants may need to think about how they approach
these partnerships to stay competitive.
20 | © 2019 PYMNTS.com All Rights ReservedPYMNTS.com is where the best minds and the best content
meet on the web to learn about “What’s Next” in payments
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cutting edge of this new world.
Paytronix provides software-as-a-service (SaaS) custom-
er experience management (CXM) services for restaurants.
Its portfolio includes loyalty, gift and email solutions for
fast-casual, fast food and QSR restaurants. Once imple-
mented, these can be used to help establishments elevate
their brand profiles. Its offerings can also be used to gener-
ate data insights to help restaurants pinpoint opportunities
to improve their operations and customer engagements.
The company’s platform can integrate with many wide-
ly used restaurant POS systems. For more information, visit
https://www.paytronix.com.
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