It’s no great revelation loyalty has emerged as a channel of choice for restaurants. Nearly 50 of respondents in PYMNTS’ and Paytronix’s last three surveys said they’ve used loyalty platforms in at least one type of restaurant. Last year, McDonald’s generated 24 million app downloads in the U.S. Its app was downloaded 33.3 percent more in 2021 than 2020, according to Apptopia. Is it a coincidence the chain debuted loyalty in July? By mid-December, MyMcDonald’s Rewards surged past 21 million members.

Chipotle went from fewer than 10 million rewards members headed into 2020 to north of 26.5 million, per its most recent quarterly report.

Loyalty helped quick-serves gain on aggregator platforms as well as competitors, and to keep customers active through tactics other than deep discounting or coupons. Mass marketing is being swapped for methods like predictive modeling.

According to App Annie’s 2022 State of Mobile Report, users spent 49 percent more sessions, year-over-year, in food and drink apps in 2021, reaching 62 billion sessions. 

The field is crowding. And so is the nature of rewards and differentiation.

In Paytronix’s 2022 Restaurant Friction Index, released this week, research showed 96 percent of restaurant managers marked down prices for loyalty program members. The average loyalty discount was roughly 3.8 percent.

Overall, restaurants charged an average of 24 percent more for menu items listed on aggregators than their own websites. Quick-serves were the most likely to bump up third-party prices, with 27 percent of managers confirming they sell the same foods for higher prices. Just 14 percent of table-service restaurant managers noted the same.

Given the inflationary climate at hand, restaurants will cede some price, it appears, to chase not only more profitable transactions (native versus third-party) but also to collect data in an effort to incentivize behavior down the line.

Sweetgreen recently told investors when customers move to digital channels, they show up at least 1.5 times more. And they spend 20 percent higher per transaction. Once they evolve into a “two-channel customer,” they visit up to 2.5 times more.

Customer arrival platform Bluedot in its latest State of What Feeds Us report—the sixth since COVID began—asked respondents what they felt was the most improved aspect of the fast-food experience from March 2020 forward. Fifty-eight percent picked “mobile app ordering,” followed by curbside pickup (44 percent), web ordering (29 percent), drive-thru (25 percent), and offers (21 percent).

Six in 10 consumers, even in 2022, said they downloaded at least one new restaurant app in the last three months. More than a third (37 percent) admitted to placing more mobile orders on restaurant apps than three months ago.

Why? Nearly one in two said they’d download an app to bypass a long line. Fast and easy to order (52 percent); earn and track loyalty points (49 percent); exclusive deals or coupons (48 percent); and ease of payment (42 percent) rounded it out.

And the majority (57 percent) said they use all, or mostly all, restaurant apps over third-party apps.

On the reverse side, nearly half said they’d delete an app if their order was cold upon arrival. They’d also do so thanks to limited-menu options (47 percent); still have to wait (42 percent); doesn’t save time (31 percent); and can’t customize order (36 percent).

Shake Shack has taken its efforts to new territory of late, and others might soon follow. The company is testing a promotion that offers Bitcoin as a reward for purchases made in Cash App—the mobile payment serviced owned by Block (formerly Square), a company spokesperson told QSR.

Cash App users can get 15 percent back in the form of Bitcoin on Shake Shack purchases made using Cash Card, which is a debit card available to Cash App users. They can redeem by buying items via Cash Boost (a rewards program for Cash Card members) as well.

Shake Shack said it’s one of the first brands on Cash App to offer Bitcoin as a reward for purchases “as it looks to meet guests how and where they want,” and reach Cash App’s younger user base. The promotion lasts through mid-March.

According to the Wall Street Journal, Block’s largest set of customers are millennials and Gen Zers.

Shake Shack told the publication it’s seen demand from guests to pay with cryptocurrencies over the years, and this test will go a long way to decide if it should begin accepting them as a form of payment or extend its rewards program.

Institutional clients traded $1.14 trillion worth of cryptocurrencies on the Coinbase Global Inc. exchange last year, the Journal reported. That sailed $120 billion from 2020.

Also, per research from Visa, 62 percent of cryptocurrency owners increased their use of digital currencies last year. Nearly 60 percent (57 percent) of consumers surveyed said they wanted to earn cryptocurrency via rewards.

Shake Shack CMO Jay Livingston told the Journal it picked Block due to users’ familiarity with bitcoin on the app already (it’s piloted bitcoin on Cash App since 2018).

Digital business overall has erupted at Shake Shack in recent months. The company said in February it’s added 3.5 million new app and web purchases since March 2020. In Q4, it grew its first-time web and app customer base by nearly 10 percent quarter-over-year and by more than 80 percent for the full year 2021.

Come December, Shake Shack retained nearly 80 percent of the digital business it generated in January, even as in-store sales nearly doubled. Digital mix was 42 percent of sales in Q4 and nearly 60 percent when considering kiosks and the brand’s native digital channels combined.

It’s a major change in a relatively compact window—a common pandemic reality. Pre-COVID, despite launching its app in 2017, more than 85 percent of Shake Shack’s sales came from guests walking into restaurants and ordering at the cashier.

By the second quarter of 2020, the figure soared from 15 percent a few months prior to 75 percent of total mix, and grew more than threefold, year-over-year.

Throughout the industry, cryptocurrency is a movement still getting off the ground. Burger King announced a promotion in November where loyalty program members who spent $5 on any food item could get a side of a cryptocurrency in their Robinhood account. This resulted in strong download activity for the Burger King app. New installs increased 30 percent over the duration of the promotion compared to the same period in October, according to Apptopia.

Full-serve Wings & Rings also announced in January it would start accepting bitcoin for franchisee fees.  

Fast Casual, Finance, Marketing & Promotions, Story, Shake Shack