The unified restaurant platform Qu has been publishing a State of Digital Report for six years now, based on the results of a comprehensive survey of fast casual and QSR brands. For this year’s report it gathered insights from 170 enterprise brands that represent 85,000 locations and some common themes emerged, chief among them that direct digital ordering is front of mind for many operators.
Forty percent of respondents said first-party digital ordering will drive the highest revenue growth for them this year. That’s a substantial jump from previous results.
Amir Hudda, CEO at Qu
“That number really jumped out at me,” said Amir Hudda, Qu’s CEO, in an interview. “But it’s not surprising when you peel the onion and take a step back. Operators realize if they want to increase revenue beyond what the economy is supporting, you have to find ways to get customers to order through your first-party channel. That way you can increase revenue without increasing market size.”
That’s a tactic that has been working for Peter Wiley, co-founder and director of marketing and IT at Hot Head Burritos. He still uses a third-party delivery provider but he opts for a last-mile service, which still qualifies as first party, which keeps profits up.
“We use DoorDash Drive,” he said in an interview. “We’ve onboarded it in all our locations. The profitability is significantly more using that service than the regular platforms. Customers are willing to pay for delivery but I think they’re getting tired of paying $10. Using this last-mile option brings the costs way down, and we have implemented in our system.”
Peter Wiley, co-founder and director of marketing and It at Hot Head Burritos
Kiosks also rose in prominence in this year’s survey results. Sixty-two percent of brands said they are embracing kiosks to help alleviate labor challenges and drive operational efficiencies. They are proving more popular at QSR brands than fast casual, at 80 percent compared to 52 percent. Interestingly, the adoption doesn’t seem to be resulting in profit jumps.
“Kiosks rank high as an efficiency enabler but not as a revenue driver,” said Jenifer Kern, CMO at Qu. “They help with labor strains and pressures and give more flexibility for guests. But they’re not seen yet as a revenue generator, which seems like an untapped area of potential because we know some brands are seeing increased check sizes. Look at Shake Shack.”
Order accuracy and promised delivery times emerged as common complaints among operators. Hudda understands why.
“They are due to inefficiencies in the kitchen,” he said. “The fact that both have jumped to the top as an area of focus for brands is significant. Operators need to look at their kitchen operations and technology.”
Read the full report here.
