When it comes to convenience, there might not be a more dynamic industry that quick service. Think back a decade, or maybe even a couple of years. What was the definition of convenience to the fast-foot customer? In one term or another, it was probably related to speed. Either it was a drive-thru factor or it was related to the ordering process itself. It wasn’t all that long ago that putting a tracking device on the table, a la Panera Bread, was a game-changer. Apps. Mobile ordering. Call centers. These are all trends that have shifted dramatically as technology accelerates. You could argue convenience is now all about on-demand experiences. Like Netflix, just for lunch. Yes, delivery is the kicker but how do you make that process as accessible as possible? Is your loyalty program part of the fold? Ask all these questions again a year from now and you might receive radically different answers. That’s simply the crux of the customer-centric game.
Austin, Texas-based agency T3 put all of this into consideration as it whipped up a fresh ranking model. The “Dining On-Demand Maturity Model” ranked the national top 50 quick-service brands for on-demand customer experiences, including online ordering, third-party delivery, and loyalty programs. One thing that’s worth noting is this list took the 50 largest brands, according to annual revenue, and then ranked them. It’s not a collection of the top 50 chains according to this new points system.
The model scores brands by considering the presence of online ordering, store-run or third-party delivery, and a host of experience improvements, such as a loyalty program. The perfect score: 4.
Here’s how it broke down:
- Third-party Delivery (but only on non-internal platform) (1 point)
- Online Ordering (1 point)
- Online Ordering with delivery or hand-off to third party (but you still own the order data) (2 points)
- Profiles that allow for saved favorites or easy reordering, Loyalty Program, App or some other experience enhancement. 0.25 points each
As you can see above, Domino’s ruled this list, which isn’t surprising by any stretch. The pizza chain has long been at the forefront of the technology-driven customer experience, and has previously said it hopes to become a 100 percent digital store in time. This means AI answering call-ins, kiosks inside the shop, the works. The brand uses smart speakers for delivery, TVs, Apple Watches. Panera, which recently said it expected to surpass $2 billion in in annualized digital sales this year across online, mobile and kiosk orders—which account for about 33 percent of the company’s sales—was tied with Domino’s. Panera received 1.4 million digital orders per week this calendar year, up from 1.2 million in 2017.
At the bottom: In-N-Out Burger. That might seem surprising when you consider how successful the brand is from a broad-stroke perspective, but, truthfully, if it wants to ignore on-demand business, it can. It’s not exactly struggling with a transaction or traffic problem.
Ben Gaddis, president of T3, took some time to chat with QSR about the results.
Talk about Domino’s ranking at the top. What are they getting right?
A focus on truly improving the customer experience is what binds all of the top brands together. What is interesting though is that two of the top 5 brands, Domino’s and Chipotle set out on that course after a brand-defining (or destroying) moment. For Domino’s they launched “The Great Turnaround” amid lagging sales, saying that they’ve heard customer complaints and are going to improve their pizza. Chipotle stock was sent on a dizzying fall after an ongoing e-coli scare over two years ago. It was at these two moments, both brands ramped up investment in innovation and experiences. You don’t have to look too much further on our list to find Papa John’s, who right now is going through a brand-defining moment, which may be the impetus for them to go all in on customer experience and become a true leader in on-demand maturity.
As for Panera, given the relative complexity of the food vs. a McDonald’s or KFC, they knew you would be waiting a little longer to get your food. They addressed this poor customer experience head on through technology via online ordering for pick up, delivery and the ability to simply order from your table.
While Domino’s continues to innovate in more kitschy ways—by making it easier to order on what seems like any digitally connected device, Panera innovated by solving a true pain point in the actual customer experience.
Coming in at No. 3 is Pizza Hut. Offering the primary means of on-demand maturity via online ordering, delivery and an easy-to-use loyalty program and app, from a customer experience standpoint. One of the more interesting aspects of Pizza Hut’s offering is that they are opening up the ability to deliver, using their wide network a whole new segment of the market. Of course, I’m talking about Cinnabon, another T3 client. Partnering with Cinnabon to deliver Minibon desserts they solved an availability issue for a fan favorite without incurring much additional effort on each brands’ part.
Now to the bottom of the barrel. There’s nothing in particular different about these brands in terms of what would potentially be possible in the on-demand space, they just haven’t taken the initiative to offer those services to customers. While In-N-Out says they don’t believe they can offer a quality product via delivery, which is a fair point, they’re still missing opportunities to improve the in-store experience via online ordering and loyalty.
What can other quick-serve brands do to improve their standings?
The basis for our rankings is addressing and improving the customer experience with your brand. In quick service right now that means allowing your customers to easily order and receive the food they want the way they want. Adding ordering capability either on a website that’s mobile optimized or within an app where you can truly create a customized seamless experience is a great way to start.
The next step would be to implement some sort of delivery capability. Today, brands like Grubhub and Uber Eats have taken over delivery for a wide range of restaurants. They provide this service that extends your ability to offer delivery when it otherwise would not be cost effective, however, they are also gaining access to your customers and their data, which gives them the ability to push them towards their own virtual kitchens or other restaurants and especially large chains that may be paying them a higher fee or have some other type of national agreement. The best way to provide this functionality without giving up your customer data is to ensure that any ordering for delivery happens ON your website or app and then is passed off to a third party just for delivery, thereby ensuring you capture customer data that will enable higher loyalty and CRM for your brand, not the third party like Uber Eats.
To that end, implementing a loyalty program that includes a comprehensive/personalized CRM component would be the final step in improving their ranking, however given the technology implications of incorporating ordering and hand off to third party for delivery, starting with those two elements (loyalty and CRM) may be an excellent stop gap measure to get you on your way.
How can this formula be applied to any brand, and how does it break down?
This particular scoring system is specific to restaurants or quick service. However the concept of improving the customer experience is pertinent to brands in any category. For brands outside of quick service, delivery or online ordering may not be the most important thing in improving customer experience. However these brands should identify what it is that consumers want from their brand relationship and prioritize the ways to provide that to them. To get there, we would want to look at either leaders in their category or related verticals that can serve as a proxy for being at the forefront of customer experience.