Digital Disruption in Restaurants – Franchise Growth Trend Hunter

Industry folks are talking a lot about digital disruption in restaurants these days. According to Steve DeSutter, CEO of Focus Brands, “The industry is changing […] One of the challenges I’ve put in front of my team is, if we are not innovating and remaining relevant to our loyal customer, we’re losing.”

The focus brands umbrella includes: Moe’s Southwest Grill, McAlister’s Deli, the Schlotzky’s sandwich chain, Cinnabon, Carvel and Auntie Anne’s Pretzels. And more than ever, offering customers enhanced choice and improved speed are the ways to define your restaurant franchise.

Driving this paradigm shift (and so many others) is the ubiquity of mobile phones, and their access to the marketplace. To put it in perspective, most people would rather lose their wallet than their phone — that’s how important they’ve become! Positive reviews have always been great for business but now they’re becoming essential. In fact,  33% of Google searches include starred reviews, and they’re no longer a “nice to have” — they’re a need to have.

We live in a noisy world – there are a lot of brands are clamoring for our attention. According to Steve Jobs, “Marketing is all about values. It’s a complicated and noisy world and we’re not going to get a chance to get people to remember much about us. No company is. So we have to be really clear about what we want them to know about. “

The retail transformation is here. According to Forbes, “e-commerce and shopping platforms such as Amazon — where 43% of all U.S. online retail sales are coming from.” With that in mind, let’s look at three franchise brands that are managing digital disruption beautifully.

To see the first two installments of our “Franchise Growth Trend Hunter” series, go to:

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Dunkin’ Donuts

Units: 12,435

Overview: Dunkin’ Donuts has long been at the forefront of mobile marketing in response to digital disruption in restaurants. Since the beginning of the digital era, they have been capitalizing on its ability to connect with consumers. As such, the company’s DD Perks program boasts 8 million members.

They are also considering a rebrand, removing the word “Donuts” from its name to appeal to modern, health-conscious consumers. But that’s only the very beginning.

Dunkin’ is trying to make their strategy even more future-thinking, with steps that include the following two strategies according to AdAge: “Use the face recognition on the iPhone X to see whether someone looks tired and suggest a coffee delivery if so, Weisman suggested. It is exploring an integration with Outlook that could suggest ordering food and coffee when someone schedules a meeting.”

They also have a new “concept store” which allows mobile orders to go in a different line, going right to the front, accelerating the process for customers willing to dive in digitally:

Bottom Line: Embracing mobile technology holistically is a big part of connecting with today’s consumer – it does not stop at a rewards program.

McDonald’s

Units: 36,899 Restaurants Worldwide

Overview: McDonalds has kept pace with digital transformation through their partnership with UBEREats in 10,000 restaurants and their mobile app, which offers a pay option.

They call this transformation “Experience the Future”. According to Diginomica: “(2018 is) set to be a year of massive investment in new digital platforms, with most of $300 million of savings elsewhere being pumped into technology spend.”

There is also an in-store component to the initiative, for those who still like to go into the restaurants. According to the same article:

“In many of our markets we’ve scaled the Experience of the Future platform providing our customers a more seamless, personalized and enjoyment experience with digital menu boards, self-order kiosk, greater hospitality and a modernized look. They are telling us they like the new McDonald’s better. They are rewarding us with more frequent visits and they are spending more on average when they do. We deployed Experience of the Future in about one-third of the restaurants in the McDonald’s system, including nearly 3000 restaurants in the US.”

Bottom Line: Digital transformation will be on the fast food menu in many different forms. Taking a multifaceted approach helps follow the consumer’s new habits, while hanging on to the basics such as friendly service and delicious food.

Dominos

Units: 9,285

Overview: In an interesting “parting shot” as he left his role at Domino’s, outgoing CEO Patrick Doyle said that Domino’s is on the path to go from 60% to 100% digital.

Pizza has lead the way in terms of home delivery. But as others catch up, they are now needing to be even more progressive. Domino’s is doing a lot, including a digital assistant named DOM who can take phone orders, similar to Amazon’s Alexa.

Part of their innovation is to have digital “hot spots” which have no traditional address for food lovers who want pizza at the beach or in the park. There will be 200,000 locations created, maximizing access for their customer base.

According to Doyle:

“The ability to now deliver to spots without a traditional address and other rather unexpected sites will not only continue to drive incremental orders in the near term, but it is yet another meaningful step on our mission of industry-leading convenience; and the ability to order from us anywhere, anytime. This is thanks to outstanding technology helped by continued aggressive investment, sound operations, which are vital to making the Hotspots process work and proper execution participation at the store level, a nod to our terrific franchisees, managers and drivers.”

Bottom Line: Innovative franchisors can still focus on “what is next?” An investment in innovation now, can help manage the digital transformation of the future.

Conclusion: As the digital and mobile technology continue to disrupt the restaurant industry, savvy business are leveraging new technology to connect with their customers in unexplored ways.

At the forefront of this movement are major chains like Dunkin’ Donuts, McDonalds and Dominos, all who have shown themselves more than capable to remain at the bleeding edge of innovation.

By maintaining the old-school ideals of quality products and expedient service, these companies and those like them can increase profitability and customer satisfaction by leveraging the latest digital technology available.

How FranchiseBlast Can Help

As things continue to evolve, you want to make sure that your operations are still strong, and that your service is at a high standard. FranchiseBlast’s Auditing and Performance tools help organizations stay on track and evolve with the times.