Does it feel like restaurants will do anything for an app download these days? That’s not far from reality, and there’s good reason why. Worldwide, according to recent data from App Annie, consumers spent $101 billion on apps in 2018. There were 194 billion downloads and users clocked roughly three hours per day on mobile devices.
But here’s an interesting figure that speaks to restaurants and the opportunity at hand: App Annie found 30 percent higher engagement in non-gaming apps for Gen Z versus older demographics. That suggests the purpose of apps is changing. Instead of entertainment, they’re playing an active role in consumer’s daily lives. They’re part of the mobile checkout journey to purchase, not just a means to waste time.
For restaurants, this opens the door to a new era of loyalty and customer engagement. Getting a guest onboard is step one, of course (hence the crazy promotions), but keeping them involved could be one of the most effective paths to repeat visits. Unlike many other industries, restaurants can pulse incentives daily that spark routine. Customers need to eat. But do they need to access that 20 percent off code to get another sweater?
This is why app engagement is such a fierce battlefield for quick-serves, especially those that thrive with occasions. Starbucks is perhaps the most vivid example. Not only does the java giant have 16.8 million people in its Rewards program—those members account for 41 percent of U.S. sales. It’s an enormous figure for a chain that hit global revenues of $6.3 billion in the first quarter of fiscal 2019.
Unlike some past sales levers, like mail-in coupons, this one isn’t sliding backward. “We’ve seen [quick-service restaurants] such as Starbucks, Dunkin’, Burger King, and McDonalds leverage mobile strategically to reach and engage their customers through the device they always have on them: their smartphone,” says Lexi Sydow, senior market insights manager at App Annie. “Ultimately, shoppers are on mobile—Americans spent 140 percent more time in food and drink apps in 2018 than two years prior.”
That’s a pretty critical metric. Part of that growth, of course, is related to the rise of mobile technology. There’s simply far more restaurant apps than before. But sheer volume doesn’t guarantee more engagement. That comes down to a changing consumer who is asking for this capability from restaurants.
“They are turning to mobile for the ease, simplicity and on-the-go benefits for both having more pleasant, relevant and customizable in-store and online experiences, and to be the bridge between their physical and digital worlds,” Sydow says.
Mobile ordering and loyalty programs are critical features in quick-serve apps that provide value for customers, she adds. It’s today’s version of the assembly line food design but without the operational bottleneck. Customers can customize food and take their time doing so (nobody behind you in line, glaring). Pick-up allows for greater convenience and most customers can appreciate skipping a line. Toss rewards into the equation and it’s a customer-experience dynamic ideally suited for the next generation of guests. In some ways, it’s a mobile version of what the drive thru was—a disruptor to the notion of fast food, served with ultimate convenience. Only this time there’s big data involved and the ability to segment customer information to create personalized marketing programs that lower spend and raise ROI. Customer segmentation and guest-centric communications. There’s a reason deep discounting has declined industry-wide. Restaurants can reach loyal guests without mass marketing.
“Loyalty programs are an excellent way of driving stickiness with users, and mobile is perfectly suited to serve as the primary access point, given our smartphones are nearly always within arm’s reach,” Sydow says. “Having a first-class mobile strategy is a necessity for [quick-serves] in 2019, or they face being relics of the past.