Leaning on digital
Wendy’s decision to turn up the digital dial doesn’t mean it’s been idle lately. Among recent key initiatives: mobile ordering, mobile offers to gain app users, and the continued rollout of nationwide delivery via DoorDash. Mobile ordering is expected to reach the entire U.S. system by the end of 2019, Penegor said.
He also admitted that awareness, across all digitals activations, remains the biggest roadblock. Leaping that will come down to sheer scale—something Wendy’s plans to address this year. The addition of systemwide mobile ordering will also allow the chain to “begin to build a one-to-one relationship with our customers, which is the ultimate goal,” Penegor said.
Delivery expansion outpaced expectations in 2018 and has grown to 60 percent coverage in North America. Penegor said Wendy’s expects to hit 80 percent by year’s end. And, again, success will depend on pushing the message out. In this battle, Penegor didn’t tap a competitor in the burger or quick-service field as Wendy’s biggest market-share threat. Rather it’s “food at home and providing more access and more reach to our brand,” he said.
“Complementing our restaurants with delivery is a good proposition,” Penegor added.
Delivery has been a guarded rollout to date for Wendy’s. Check sizes are reporting one-and-half to two times higher than in-store orders—in line with peer results. However, Wendy’s model with DoorDash is one that passes on all costs to the chain. Service fees and delivery fees are taken on by customers, not Wendy’s, which makes watching guest satisfaction a critical task, CFO Gunther Plosch said. “Especially the value perception to make sure that we actually have that right in the minds of the visitors,” he said. Plosch added that customer satisfaction and value perception on delivered orders are favorable so far.
There’s also the question about how delivery fits into some of Wendy’s other consumer-facing initiatives. Notably, speed of service. The topic came up often during Wednesday’s call, especially where it concerns the drive thru. Wendy’s clocked an average of 226.07 seconds in this year’s QSR Drive-Thru Study, good for fourth overall and a significant slowdown from last year’s 185.05 seconds. It was 169.11 the year before that, which ranked first among quick-serve competitors. More on this shortly.
Penegor was asked how DoorDash drivers going through the drive thru might affect speed, and if Wendy’s would consider testing delivery-dedicated windows