One day, history books may refer to the 2020s as the era of the unprecedented—an age forged by shock and gilded with ambiguity. And though we never truly know what’s around the corner, one thing is for sure: Transformation can and will occur, and we should prepare for it.
The quick-service restaurant industry is no stranger to the unexpected impact of relentless change. Consider the ripple effect of the Ozempic phenomenon in 2023. Originally developed for diabetes, it became a household name once word spread that it could help people lose weight quickly. Subsequent shifts in consumer health trends suddenly impacted food preferences—a handful of snack food brands experienced dips in their stock amidst concerns that these drugs would hobble demand, and quick-service operators are still having to re-think menu offerings and marketing strategies.
The question for quick-serves is how to anticipate disruption from innovation within and outside our industry. The answer isn’t to predict the unpredictable, but rather to harness the power of data, insights, and analytics to navigate disruption from any source.
Adapting to change with a solid foundation
The significance of a solid foundation in data, insights, and analytics cannot be overstated. A well-structured organizational framework, rooted in responsible data usage, reduces operational friction, and enhances the efficiency of implementation. Research by McKinsey emphasizes the potential of data and analytics to generate substantial value, suggesting that their strategic application could unlock between $9.5 to $15.4 trillion annually. For quick-service restaurants, this means not only surviving in the face of disruption but thriving with proactive innovation and data-driven decision-making. Establishing a culture focused on measurement and informed decision-making equips quick-service restaurants to respond swiftly and effectively to unforeseen challenges.
Testing 1-2-3
The story of Subway’s $5 Footlong sandwich illustrates the importance of testing in the industry. The campaign became ubiquitous by offering a genuinely good deal paired with an earworm jingle. But the brand almost slashed the idea entirely after a trial showed that increased sales did not offset the price decrease. Though that data point alone feels like it would lead to an inevitable decision, Subway engaged Test & Learn, Mastercard’s measurement and analytics platform, which found that Footlong customers were frequently adding items like chips and drinks to their orders, which ultimately boosted overall profits. The Subway example demonstrates why testing, and not surface insights, should guide strategic decisions from menu offerings to pricing strategies. For quick-serves, regular testing not only aids in refining current practices but also in exploring new opportunities to enhance customer experience and operational efficiency.
Understanding and anticipating the environment
Mass disruption does not discriminate, which is why dynamic industries such as quick-service restaurants need to embrace a holistic look at the competitive landscape to understand what might move the needle. For example, in 2023, restaurant clients using Test & Learn indicated that the biggest priorities for the 50 or so tests they run per year are around maintaining and boosting their profit margins, restoring in-store visits, and increasing check sizes at those visits. New menu items, limited time offers and pricing, with increased testing to inform real estate planning and working with delivery partners, make up the content of those tests. While these insights about what’s being tested across the category alone aren’t enough to dictate strategy, they do provide a hat tip to where a quick-service restaurant might want to focus its energy in 2024 when evaluated with macroeconomic indicators.
While consumers returned to normal habits since the pandemic, some behaviors have been permanently altered. Consumers have started seeking different and unique dining experiences, whether that means a night out at a fine dining restaurant with a seasonal menu or joining a fast-food livestream where thousands of viewers share a meal from the comfort of their own home. No matter the trend, consumers are still looking for value, which quick-serves can provide at the minimum with personalization, seamless ordering journeys, and more.
Ultimately, when it comes to disruption, the when, how, and why of it all together matters as much as the simple fact that it will happen—change is inevitable, and the companies that emerge on the right side of transformation will have been prepared long before they needed to be. The quick-service restaurant industry’s journey through the “unprecedented era” underscores the critical importance of embedding business experimentation in a company’s DNA. With the right operational framework to collect, synthesize and analyze data, an understanding of where you fall within the industry, and the savvy to second guess, operators can weather mass disruption no matter where the storm comes from.
Mohamed Abdelsadek is Executive Vice President, Data, Insights & Analytics at Mastercard Data & Services. He leads a global team focused on developing services and platforms that help our customers use data and insights to make smarter decisions with better outcomes, like marketing more accurately, testing and measuring initiatives, managing risk, and forecasting spend via Mastercard SpendingPulse™. Prior to this role, Mohamed held multiple positions at Mastercard, including executive vice president of services for North America and executive vice president of strategy, corporate development and M&A at Mastercard. Before Mastercard, Mohamed was at Synchrony Financial/GE Capital, where he led global strategy and payment innovation and ran several card portfolios. He previously worked at McKinsey & Company advising financial services companies in the New York, Zurich and Dubai offices. Mohamed has a Bachelor of Computer Science and Electrical Engineering from SUNY at Stony Brook, a Master’s in Computer Science from Columbia University, and an MBA from the Wharton school at the University of Pennsylvania. He resides with his family in Connecticut.
