Digital Ordering Moves Mobile Sales Ahead in Quick-Serve Restaurant Industry

April 27, 2016 by
Adweek photo 
The times they are a-changin'. 

Yum! Brands, the parent company of Taco Bell, KFC, and Pizza Hut, recently announced that digital ordering now makes up almost 50% of their total delivery and carryout sales in the U.S.

With more people moving to mobile for all their technological needs, the value of online ordering platforms for quick-service restaurants (QSRs) is becoming increasingly apparent, indicating a "virtual gold mine", according to Business Insider. They state that while mobile order-ahead is still in its early days, it will be a $38 billion industry by 2020, accounting for 10.7% of total QSR industry sales.

Taco Bell's average app ticket size is also growing, surpassing in-store by 30% thanks to mobile's ability to engage loyal customers and encourage with promotions and deals. Yum! Brands noted that for many of their subsidiaries, digital ordering results in higher average order value. It's no wonder that QSRs are adopting these platforms at an "accelerated pace".

A researcher for BI Intelligence has compiled a detailed Mobile Order-Ahead Report profiling organizations and analyzing trends contributing to mobile ordering's growth. It is available to subscribers via Business Insider.

Key takeaways from the Business Insider report: 
  • Sales from mobile order-ahead app platforms that enable consumers to remotely purchase menu items for in-store restaurant pickup are expected to reach $38 billion by 2020, representing a five-year compound annual growth rate (CAGR) of 57%
  • Mobile ordering platforms have been proven to intensify customer loyalty, increase purchase frequency, and lift average ticket sizes through order customization and easier checkout options; in effect enhancing the lifetime value of customers
  • Alternative commerce solutions help propel mobile ordering by offering smaller fast-casual restaurants existing apps to integrate into; in-store self-service kiosks also help popularize remote ordering and aclimatize users
According to Shopify, mobile now accounts for 50.3% of all ecommerce traffic, the rise being fuelled in part by the trend of social networks becoming major marketing channels.

Posted in: Industry Trends, US Industry News