How quick-service restaurants are being revolutionized through digital order and payment

Digital payment has been rapid to catch the quick-service restaurants (QSR) industry. After Subway launched touchscreen self-ordering kiosks, a mobile payment app, dedicated pickup areas for mobile orders, and digital menu boards last year, another QSR has not lagged behind in adopting digital strategies to stay ahead of the curve.


Subway self-service kiosks are an example to follow

Last year, Subway was forced to review its business model, adding new “electronic kiosks” to some of their outlets as part of their new movement dubbed “fresh forward.” More than just a mere renovation, Subway undertook a technology-powered food resolution.

Subway is one of the biggest fast-food chains worldwide, with over 24,000 retailing points scattered across the United States only. However, while the household name rules over an impressive market share, its business has not been spared from a drop of 1.7 % in sales in 2016. The said percentage would actually translate into a massive 200 million in dollars. This came in as a surprise for the company, as in the meantime, overall restaurant sales had increased by a whopping 4 %.

Making the most of digital order and payment

After a careful analysis of the situation, the Subway team realized that the loss they had experienced in 2016 might have been incurred by the lack of freshness of their aging business model. In fact, at that particular point, the Subway concept had not been revised in more than 3 years, leaving the consuming crowds exhausted of a formulaic dining experience. To remedy the situation, Subway has come up with a new concept dubbed “fresh forward.” The backbone of the project is a new kiosk system that eliminates queuing and optimizes customization by making the most of today’s technology.

Subway hired FRHC Design Worldwide to implement the kiosk-centric redesign of their retailing outlets. Robyn Novak, the Managing Director of FRHC Design Worldwide, stated that “the kiosks introduce another channel for tech-savvy guests to engage with the brand and needed to feel integrated into the customer journey.” “Fresh forward”, therefore, targets a new set of customers without alienating current Subway-goers, as it only comes in as an additional implementation, and not a replacement.

The Subway restaurants currently promoting the new “fresh forward” experience have been revamped to cater to a seamless customer experience. Space has been carefully surveyed to allow for a kiosk area, as well as dedicated pick-up and carry-out points, all laid in a way that is expected to lessen congestion. Additional facilities include a bot for Messenger orders, USB charging ports, and complimentary Wi-Fi.

Visibility is a capital aspect of the new Subway redesign

The positioning of one of Subway’s “fresh forward” kiosks in a particular outlet will depend on several factors, however, the main one remains visibility. “The location of the kiosks is not only convenient but offers visibility to the ‘make-line,’ allowing guests to still feel immersed in the ‘Fresh Forward’ experience that Subway has elevated within the new design,” Novak said. “When it came to integrating the kiosks within the restaurant environment, the priority was to create a prominent view from not only the entry but clear visibility from the exterior as well.” In most outlets, the kiosks are up against a wall, but in some others, they can be found up against windows.

The planning of the different Subway restaurants’ interiors had to correspond to each outlet’s respective size and layout. An important feature of each store, however, was to make the kiosks separate from pickup areas to avoid congestion, irrespective of the space available.

Accessibility is a key point of “fresh forward”

Trevor Haynes, Subway’s Vice President, explained that their new concept was all about making healthy food more convenient and accessible than it has ever been before. Kiosks stack onto other options of ordering one’s meal efficiently, some of which would include ordering through messenger bots, through the Subway mobile app, or through the company’s website.

When it comes to paying for their meal at a kiosk, customers can recourse to either their credit cards, Android Pay, or Apple Pay. However, if they want to use cash, customers can still queue up in subways traditional “sandwich line.”

The kiosks help in making orders faster as they eliminate the process of queuing up. They also ensure accuracy, thanks to the minimization of human error enabled by cutting-edge technology. However, another of the features of kiosks is that they further the customization that Subway has been betting on since day one.

Offering customers a creative experience with self-order kiosks

“The self-order kiosks allow customers to be as creative as they want with their meal and experiment with the food and toppings, helping us to deliver a personalized, convenient and rewarding experience to our all guests,” Haynes said.

Subway hired Agilitee Solutions LLC, one of its long-time digital collaborators, to design and build the kiosks. Steve Street, Agility’s Founder and Lead Digital Partner, admitted that integrating kiosks into Subway’s ecosystem within a limited period of time was particularly challenging. The new implementation had to work seamlessly with the fast-food chain’s already existing product catalog, payment system, and POS system. However, the end result proved to be worthy of Subway’s expectations.

“The kiosk allows you not only to get your sandwich but also to ensure that those ingredients are available at that restaurant location,” Street said. “It also has to validate that the payment is valid and has to send the order down to that local restaurant.”

 “The kiosks will not be replacing employees,” Haynes said. “The sandwich line and the interaction with ‘Sandwich Artists’ – who are the ones to prepare the meals – will always be part of our model; however, the kiosks do create some efficiencies. Thanks to the latter, ‘Sandwich Artists’ are able to make meals faster, creating sandwiches that come in from the kiosks quickly while continuing to give customers who go through the line a great experience.”

Subway announced 12 “fresh forward” outlets back in July, however, the company has already implemented 29 such restaurants across the globe.

“We conducted research to determine how to best implement the Subway Fresh Forward design, and learned that not all locations should have kiosks for various reasons, like restaurant space and customer traffic,” Haynes said. “Other factors include sales performance and leases.”

Given that for an outlet, a “fresh forward” makeover implies an investment of at least $200,000 to $300,000, determining which restaurants would benefit from kiosks the most is of capital importance for the time being. However, this might only be the case because the project is still at its infancy stage. As they launch in full swing, “fresh forward” kiosks might become a Subway standard, eventually reaching the totality of the fast-food chain’s customers.

Battling with online delivery and payments

Taco Bell is has pulled ahead of Burger King as the fourth-largest quick-service restaurant (QSR) brand with new delivery options.  However, McDonald’s Corp. continues to maintain its position as the largest QSR, followed by Starbucks and Subway, according to Bloomberg. To stay in ahead of the curve, all are competing on the digital battleground. Here are the highlights of their respective strategies:

  • Enjoying domestic sales amounting to $37.5 billion, McDonald’s continues to expand its delivery efforts through the McDelivery on the Uber Eats app. It is available from over 2,000 restaurants around the country, with 1,000 new stores added last year. The chain has witnessed improved operating performance and delivery is forecasted to keep growing, especially boosted by young customers.
  • With its $18.4 billion in domestic sales, Starbucks is by far the most successful mobile payments platform in the United States. In 2017, mobile payment use represented 30 %of the brand’s total transactions. At the same time, the company invested thoroughly in its loyalty program which grew by 11% last year and reflecting 14.2 million active members. The chain is, hence, well-positioned to explore cashless stores across the U.S. A pilot project is currently running in Seattle. And by expanding capacity at peak, Starbucks has managed to offer Mobile Order and pay even to non-rewards customers.
  • Subway is another leader with its domestic sales reaching $10.8 billion. The chain understood that diners want mobile order-ahead on their devices, earn loyalty points and browse WiFi while eating in. The company was quick to react and part of their strategy was even to close hundreds of locations to promote new restaurant tech in its stores and its self-ordering kiosks amongst others. Customers can customize their sandwiches through their mobile app ahead of time on 26,000 out of the 27,000 stores. Subway plans to introduce 3 kiosks at every restaurant location. The company is also testing third-party delivery services on a small scale.
  • Taco Bell, on its side, is focusing on expanding its delivery reach and online ordering to drive up domestic sales that amounted to $9.8 billion.
  • Burger King has also adopted mobile payment to boost its sales. Even if it is currently a pilot project, the chain is planning to roll it on a broader scale.

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