Outside Insights | March 2017 | By Guest Author

Why Mobile Should Be Your Secret Weapon

Around 80 percent of the U.S. population use mobile devices to make everyday tasks easier. This includes dining out.
Many quick-serves today are utilizing the power of mobile technology to attract new customers and increase average order size. Thinkstock
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Whether it’s to text, tweet, photograph, email or check in, around 80 percent of the U.S. population use mobile devices to make everyday tasks easier. Simply put, mobile rules. As a channel, it represents a huge opportunity for the quick-service industry. Not only to improve the overall guest experience but also drive results that matter to operators.   

Many quick-serves today are utilizing the power of mobile technology to attract new customers and increase average order size. The return on investment for those brands willing to invest in mobile is undeniable. That’s why quick-serves open to building dynamic, customized mobile customer experiences will be rewarded by gaining a significant competitive advantage over their competition.

Is mobile really that important? 

A recent consumer study of 2,500 diners conducted by mobile solutions provider DMI reveals how ubiquitous mobile devices have become for quick service customers. Some compelling stats include:

  • 63 percent of diners have at least one quick-service app on their phones.
  • 73 percent of diners have used mobile within quick serves.
  • 35 percent use mobile every time they visit a quick-service restaurant (or at least regularly).

Check Out The Full Study Here

Consumers are beginning to see mobile as a way to improve the entire quick-service dining experience, rather than just one part such as viewing a menu or using a rewards card.  Let’s look at some ways in which mobile can positively impact the bottom line of quick-serves willing to make the investment.

Mobile increases visit frequency

According to DMI research, mobile activities most desired by quick-service diners include viewing menus, finding closest locations and placing orders. But how can offering these key mobile features help increase restaurant visits?  By finding the intersection of frequent mobile users and frequent quick-service diners.

Coined “Mobile Reliants” by DMI, this group of consumers, which represents 31 percent of all quick-service diners, is actively engaging with mobile to improve their quick-service experience—whether it’s searching for a nearby location or paying with a smartphone. Although Mobile Reliants make up less than one-third of all quick-service diners, these individuals tend to frequent quick-serves more often, are highly satisfied with the dining experience and are eager to use a quality quick-service app. Research indicates that 85 percent of these frequent diners would visit quick-serves more often if they had an app that appealed to them.

Mobile ordering increases check size

So now that high-volume mobile users are visiting more often, how does mobile help increase the size of their checks? Research indicates that being able to easily view the full menu and place an order via mobile is key for consumers. While this may seem obvious, many quick-service apps and mobile sites don’t currently offer this functionality. Why is this a problem? Projections state mobile ordering will account for 10.7 percent of all quick-service sales by 2020. Statistics also show that mobile and automated orders are more profitable from an operations standpoint.  More profitable transactions clearly impact a quick-serve’s bottom line for the better.

In fact, quick-serves leading the way in mobile are helping to support the case for adopting mobile ordering and payment platforms. For example, Yum! Brands, the parent company of Taco Bell, KFC, and Pizza Hut, announced in 2016 Q1 earnings that mobile ordering comprised nearly half of its total U.S. delivery and carryout sales. According to Business Insider, Taco Bell also saw a 30 percent higher average order via mobile than orders taken in-store, and Starbucks’ Mobile Order & Pay, which launched in late 2014 as a pilot, already accounts for 10 percent of total transactions at the stores that offer it.

Good mobile experiences can help earn market share, increase loyalty

Truly successful mobile experiences should cover the entire dining journey, from the first rumblings of hunger to giving feedback on a meal.  Research indicates that more than 65 percent of customers would choose one brand over another based on the appeal a mobile app alone.  What drives appeal? Research indicates the biggest drivers of appeal within mobile experiences are features that save diners time and money. This is obvious, but how the mobile experience is designed for the user and how it captures and acts upon appropriate data is where the art of the quick-service mobile experience comes to life.

Taco Bell, for example, not only rewards customers for increasing the size of their order, they also encourage diners to take actions like sharing on social media or opening the app every day. The brand is reaping the benefits of its well-designed program, with customers spending an average of 25 percent more on mobile orders than on non-mobile orders.

Domino’s, which reported strong same-stores sales in 2016 Q3 earnings, an anomaly in the restaurant industry today, was recently ranked by DMI as the quick-serve providing its customers with the best mobile experience.  The argument can be made that Domino’s strong commitment to providing a first-rate mobile experience has lead to increased loyalty, repeat visits and ultimately stronger sales—especially among the Mobile Reliant audience. 

Although becoming less of a “secret,” mobile can and should become an effective tool to help quick-service operators grow their businesses.  However, it’s important to note that a private branded mobile channel that the quick-serve controls, in contrast to third-party consolidators like Uber Eats or Yelp, is the only profitable way to take advantage of many of the mobile activities customers want most. Brands willing to meet customers’ demands for faster, cheaper, more convenient mobile experiences will continue to gain the competitive advantage. 

Jeremy Gilman is senior vice president of strategy for DMI, a global leader in end-to-end mobility services and solutions. As the head of the global strategy and innovation group, Gilman oversees the team that drives customer-centric innovation, new product and service design and mobile strategy for clients across industries.