There is no doubt that quick-service restaurants have evolved since they first appeared on the food service horizon. Chains that were established based on low price and fast service, with limited hours and only a handful of menu options available, have reinvented themselves dramatically. They now cater to a new generation of consumer who demands that meals be served "their way" at all hours of the day and night.
The generation born between about 1980 and the year 2000 (some say 1977 to 1996) is on its way to becoming the shaper of many modern-world trends, particularly in food service and delivery.
Price today is not nearly the driver it once was according to all recent data. Millennials are cost-conscious, but they also place a high value on the experience. Today's millennial and "centennial" (those born since 1996) consumers tend to focus on the overall experience, which includes taste, convenience, cost, and how they feel when they’re in the restaurant and eating the food. Quick-service restaurant establishments—even well-established chains—must respond to this desire for experiences or lose market share.
The shifting landscape of consumer preference has seen the rise of various trends, including breakfast service all day, food customization, fresh and local choices, the addition of beer and wine to menus, and the growth of food trucks. Each has captured a following, brought change to an appreciable segment of the market, and continues to influence menu development and new innovation in food service. Many industries have found challenges inherent in appealing to millennials, and quick-service restaurant is no different.
Part of the customer experience that quick-service restaurants can’t ignore is how millennials appreciate convenience. It’s apparent in how they’ve responded to mobile apps. In an increasingly "connected" age, diners regularly use mobile (both apps and mobile payments) when they visit quick-service restaurants; some report using apps on every visit. In a recent DMI Research consumer study of 2,500 diners, quick-service restaurant diners reported on their mobile app usage:
Termed "Mobile Reliants" by DMI Research, it is clear that Millennial generation consumers, who grew up with digital technology, look to their smart devices even when it comes to filling their stomachs.
But not all quick-service restaurant apps are created equal. ARC from Applause analyzed nearly one million app store reviews of the 100 most successful restaurant chains based on U.S. sales.
Domino's emerged as the clear leader in terms of best mobile experience. When viewed in conjunction with strong third quarter 2016 earnings and brand loyalty, the case could be made that a better-than-average mobile experience leads to stronger market performance. But there’s a causality dilemma here: Do mobile apps drive millennials to the store or do these restaurants develop great mobile apps to appeal to their strong millennial consumer base?
In an effort to shed some additional light on the benefits of mobile apps to attract and retain customers, InfoScout analyzed over 77,000 guest visits, using proprietary capability called “Trip Circuits” to see the percentage of trips made by Millennials to the quick-service restaurants with the highest rated apps, according to ARC.
Restaurant type plays a part in how the apps are used, with the number of trips during "off hours," understandably higher at those quick-service restaurants that are known for their snack items rather than for full meals.
Taco Bell, for instance, not only promotes the ease of ordering and paying online, but also rewards customers for larger orders and encourages social media sharing of personal experiences. Its Cinco de Mayo Snapchat lens was viewed 224 million times in one day in 2016, which broke the Snapchat record. In return, the chain has seen a 25 percent boost in dollar value on orders from mobile customers.
From the restaurant's point of view, the primary reasons to have a mobile app include convenience, ability to speed up food delivery during peak service hours, faster payments that translate to faster revenue, and the effort to establish brand loyalty. But from a consumer point of view, mobile apps are created to make their life better. We can’t say that good mobile apps drive millennials to a restaurant or if restaurants invest in mobile apps because they already have a large millennial audience. What we can say is that the app must enhance the overall customer experience for your millennial customers, whether it helps them skip a line to get their food faster, or looks like a walking taco for a good laugh.
Those quick-service restaurants that spend time and effort to develop their own distinctive apps seemingly benefit the most, whereas those employing generic ordering apps may see relatively little effect in terms of both use and uptick in return visits. Quick-service restaurants can’t simply have an app, it must be a good app that fits the unique customer experience your shoppers desire.
Domino’s chief digital officer Dennis Maloney explains what makes Domino’s the number one rated quick-service restaurant app. “We were one of the first companies to have a voice interface in our apps. We were one of the first to do Twitter ordering. And we have a zero-click app that allows you to order without basically doing anything at all. Pizza’s fun, so these things should be, too. It’s about pushing the boundaries to create fun experiences that reinforce who we are as a brand. These should be things that move the brand forward in a big way long-term. Plus, they’re fun to work on.”
Kyle Beltran is a market research consultant with InfoScout, where he helps industry leaders like PepsiCo and Unilever recognize marketing ROI through data-driven insights.
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