2018: The Year of Drive-Thru Innovation
Menu upgrades and improved packaging are also on the books for 2018.
Quick-service restaurants will look beyond technology to differentiate their drive thrus and improve the customer experience in the year ahead, as curbside pickup and delivery options pick up steam. This was one of the 2018 predictions for the industry from King-Casey, a well-known restaurant and retail consultancy. King-Casey principal Tom Cook also offered practical advice on how quick-serves could deal with the opportunities and challenges posed by the future.
Among the firm’s other predictions:
Curbside pickup and delivery will grow in the near future, causing operators to make significant investments in packaging. Then delivery will begin to slow
Responding to millennial tastes, quick-serves will offer far more innovative menus
Savvy chains will increase spending on marketing at the store level (in-store & drive-thru)
“Value” will become the watchword of the day
The Drive-Thru Battleground
As QSR’s 2017 “Drive-thru Performance Study pointed out, the customer’s “need for speed and convenience” means that the quick-service “world is once again remembering the beauty of the outdoor lane.” Study participants were virtually unanimous in saying that “technology” would be the most important factor in improving speed of service, as well as the “one innovation that is going to change the future of the drive-thru.”
Cook understands the pervasive importance of technology, but also believes that “the most successful quick-service restaurants will look beyond technology to differentiate their drive-thrus.” His reasons are twofold: “First, history has proven that technology always takes longer to implement than anticipated, and often produces unintended consequences when it does so. Starbucks mobile ordering, for example, grew so fast that it swamped the stores until they took corrective action. Second, smart operators will improve the customer experience at the drive-thru through better communications (wayfinding, MenuBoard optimization) and branding.” He also believes that Fast Casual chains will increase their adoption of the drive-thru, based on the success of Starbucks and Panera, and that convenience stores will not be far behind.
Curbside Pickup, Delivery & Packaging
Mobile ordering moved ahead at freight train speed during the past year. Panera Bread saw the payoff of a six-year investment in Panera 2.0: self-order kiosks, digital ordering and delivery. Digital orders now account for 36 percent of sales in 900 company-owned stores. At Starbucks, mobile now accounts for 7 percent of sales and the company is testing voice ordering using artificial intelligence. McDonald’s jumped on the bandwagon, saying it would incorporate mobile order & pay at 20,00 locations worldwide.
Once you’ve placed the order, how do you pick up the product? In addition to the drive-thru, there’s curbside pickup and delivery, both of which seem to be booming now. Cook does not see that continuing. “Curbside pickup will grow dramatically due to its convenience and the fact that it is much more profitable for operators. Delivery is growing now—Panera said it would add 10,000 drivers in 2017—but will slow down because it requires a substantial investment in your own vehicle fleet and drivers or an arrangement with a third-party provider, such as Uber Eats.” He also believes delivery will skew toward larger orders and the dinner daypart.
“Packaging,” Cook says, “will take on greater importance as pickup and delivery grows. Structural improvements will be developed to insure product quality—customers like their food hot—while branding, storytelling and aesthetic enhancements will improve product presentation and customer engagement with brands.”
The need to appeal to the diverse palates of millennials, fast becoming the dominant consumer market segment, will result in unique, new menus. Signature offerings will give brands an opportunity to differentiate themselves, as Taco Bell, Chick-fil-A, Popeyes and Pei Wei have already done.
Marketing Spend Shift
Cook believes that smart chains will increase marketing investments at the store level (in-store and drive-thru) because this is where the overwhelming majority of their sales take place and where they can drive behavior and the average check. For example, Starbucks is the recognized leader in mobile ordering, but still conducts almost 80 percent of its customer transactions at store level.
Value: The Holy Grail
As “Location, location, location” drives the real estate industry, Cook believes that “value, value, value” will be the quick-service mantra in 2018 as brands focus on the attributes of speed, convenience, cost and product satisfaction that made quick-serves attractive to customers in the first place. He foresees value menus proliferating among quick-service restaurants and fast casuals, as well as deep discounting becoming a new normal for QSRs. And he has a word of warning as well: “Watch out for convenience stores. They have a strong value proposition and foodservice is becoming the engine of their businesses.”
Founded in 1953, King-Casey (www.king-casey.com) is a pioneer in restaurant consulting, branding and design. Its proprietary Customer Operating Zone Improvement discipline (COZI) enables clients to optimize store environments and customer zone communications to improve the customer experience. Clients include Starbucks, McDonald’s and Subway, as well as C-stores American Natural, Circle K, ampm, Parker’s and Dodge’s.