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Quick-service restaurants (QSRs) have been bracing for digital disruption for some time. However, the seismic impact of COVID-19 has catapulted restaurants into immediate disruption and left them with two options: One, they can quickly pivot and embrace digital strategies to transform the business operation and serve customers in this new climate, or two, shut down and risk catastrophic loss.
The National Restaurant Association has projected a $225 billion economic impact and 5 to 7 million jobs lost between March and June of this year. In its Q1 2020 earnings call, Starbucks, the third-largest QSR in the world, estimates that it will see a $915 million global loss of revenue resulting from store closures, fewer operating hours, and restricted sales channels.
Clearly, the pandemic presents unique challenges on top of those that QSRs confronted even before the crisis. But by adapting to these obstacles now, brands will come out on the other side if they develop and execute on a digital strategy that positions them to serve their customers in new ways. In “Research Overview: Strategies For Digital Success At Quick-Service Restaurants,” we highlight several digital strategies that QSRs should adopt to position themselves for the long term, including:
- Marketing to a new customer base. In an April Forrester Analytics Consumer Technographics® survey, 17% of US online adults said they have ordered restaurant delivery online for the first time during the pandemic. In our follow-up survey in May, 38% of US online adults said they are likely to continue ordering online restaurant delivery after stay-at-home restrictions are lifted. By wisely marketing to first-time mobile customers now, QSRs can cultivate longer-term loyalty among their newer patrons.
- Embracing digital operations. Yum! Brands-owned The Habit Burger Grill, a limited-service fast casual restaurant, operates just 50 drive-throughs among its 276 locations across 13 states. In response to the pandemic, it pivoted to new fulfillment options, depending on the location: no-contact pop-up drive-through, no-contact drive-up service, and no-contact curbside service.
“I think all of the digital enhancements and adjustments we’re making to become more convenient will resonate strongly with consumers,” said Habit Burger Grill CEO Russell Bendel. “[T]he curbside option is something we’ll probably continue forever because it certainly addresses the needs of the customers on a number of fronts . . . there’s a whole new way of looking at things.”
- Leveraging customer data to deliver unique experiences. Agency Viant collected data on nearly 2 million customers of a sandwich chain, then built a machine-learning model that segmented those customers based on factors such as visit frequency and meal preferences. By personalizing their customers’ experiences, QSRs will position themselves to retain customers in a post-COVID-19 world.
Embracing capabilities such as mobile ordering, curbside pickup, and contactless payments is only one of the ways that restaurants are meeting the needs of their customers during the crisis. And as restaurants see proven success, we expect that they — and their customers — will adopt some of these services for the foreseeable future.
I invite you to read the report and set up an inquiry with me to explore potential ways to evolve your digital strategy.
(written with Brandon Shaik, research associate)