Fast food chains — dubbed Quick Service Restaurants — have started embracing apps that let customers order ahead of time and pick up in-store. In part, it’s about convenience but it’s also about helping these retailers drive revenues higher.
Recently, Taco Bell launched a mobile order-ahead app that allows customers to purchase food from the app and pick it up without waiting in line. The app has seen significant early success — with higher average order sales boosting total revenues.
In new research from BI Intelligence, we look at how fast-food chains are leveraging mobile order-ahead to attract more customers, intensify loyalty, ease payment friction, and drive additional incremental revenues.
Here are some of the key takeaways:
- Quick-service restaurants are increasingly offering mobile order-ahead apps that allow consumers to make orders remotely and pick up what they have ordered in store. The apps offer consumers convenience and retailers the opportunity to drive higher revenues.
- Taco Bell’s early success with its order-ahead app gives other chains a blueprint for launching these apps. Taco Bell recently launched a mobile order-ahead app that has been downloaded 2 million times in the first four months, and 3 out of 4 Taco Bell chains processed a mobile order on the app’s first day. Other chains with these apps include Pizza Hut and Chipotle.
- Mobile order-ahead can drive higher average order values. Taco Bell’s app orders are 20% higher on average compared to in-store because consumers are more likely to add toppings to their orders or send in group orders via the app.
- Other types of apps have already shown success within the food and beverage industry. Seamless/GrubHub has already had phenomenal success in the $US9 billion online ordering market. And the Starbucks and Dunkin’ Doughnuts mobile in-store payments apps have proven that consumers will use their phones for brick-and-mortar purchases given attractive incentives like loyalty programs.
- While mobile order-ahead offers a substantial opportunity to restaurants, it also comes with risks. A successful mobile order-ahead program could have a substantial impact on the dynamics of a brick-and-mortar restaurant’s operations. If order flow is not managed properly, this could create an unpleasant in-store experience and reduced sales.
In full, the report:
- Charts out the total US sales of quick-service restaurants to quantify the mobile ordering opportunity
- Conducts a case study of Taco Bell’s mobile order-ahead app, including an analysis of its average order values on both mobile and in-store
- Provides overviews of the other QSRs venturing into mobile ordering along with its predecessors
- Identifies the risks associated with implementing a mobile ordering program
To access the full report from BI Intelligence, sign up for a 14-day trial here. Members also gain access to new in-depth reports, hundreds of charts and datasets, as well as daily newsletters on the digital industry.
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