When it comes to news about the fast food industry, there are so many mixed messages out there.
To confuse matters, McDonald’s entry into the ‘chicken sandwich wars’ recently sparked a surge in foot traffic across the U.S., contributing to what some observers are calling the ‘Great poultry crisis of 2021’.
March 2020 saw many quick service restaurants (QSRs) running around like headless chickens. Over a year into our COVID-19 reality, they shouldn’t have to wing it.
In this blog, we hope to clear some of the fog by addressing key questions like:
- Are consumers really turning their backs on physical restaurants?
- Do those who typically order online have different preferences and purchase drivers to those who buy in-person?
- Has the pandemic-driven health push translated into actual behavior?
Digital and physical channels should collaborate, not compete.
Analyses that pit digital solutions against traditional channels often miss the mark.
We can confirm online ordering rose during lockdowns; across the four countries listed below, the number of consumers ordering takeaway food via the internet increased by 16% between Q1 and Q3 2020.
And while many QSRs struggled in the initial stages, digital-first brands like Domino’s and Papa John’s have seen a YoY increase in the number of consumers visiting or buying from them in our latest wave of data.
Naturally, ghost (delivery-only) kitchens have become a main pillar of the QSR industry, with hotdog provider Nathan’s Famous rolling out 100 in under eight months and announcing plans for 100 more.
It’s clear digital channels are more than just a COVID-crutch; they’re part of the sector’s DNA and have even surpassed physical restaurants in popularity across the UK, largely due to the traction of third-party apps.
But it’s important not to get carried away. Across these markets, even after a year of COVID-induced lifestyle changes, in-person ordering is still the default.
Particularly in the U.S., where consumers order takeout food far more regularly, the additional fees attached to online ordering make drive-thrus and on-premises dining far more attractive.
30% of fast food eaters order it as a treat in the U.S., compared to 61% in the UK – a sign that in-person ordering is particularly popular in parts of the world where takeout is very routinized.
Even in the UK, it’s far too soon to neglect traditional channels, especially as once digital-only brands like Amazon move to expand their physical footprint here.
An either/or approach isn’t pragmatic; digital channels promise to enhance, rather than undermine, brick-and-mortar locations.
Digital drive-thrus demonstrate how tech solutions are elevating traditional ordering channels.
Chipotle has already integrated its Chipotlane into hundreds of locations, with more to come.
And the potential doesn’t end there. Burger King is piloting a program that uses Bluetooth to identify loyalty program members, in order to display their favorite orders on menu boards as they drive by – another illustration of how the in-person restaurant experience is evolving, not dying out.
Ultimately, these integrations are in high demand. Our research characterizes takeout eaters as tech-savvy. They have an above-average tendency to own the latest tech products and are more likely to feel in control of their personal data online.
Rather than debating whether virtual channels are overtaking traditional ones, QSRs should focus on how the two avenues can complement each other, especially in countries where consumers keep arriving by car and on foot.
Some prioritize convenience, while others crave experience.
The fast food experience is often imagined as functional. Take a moment to picture a takeout eater. It’s natural to visualize a busy worker, on the go, wanting quick food at a low cost.
Yet, takeout eaters shouldn’t be lumped together under a description as general as this.
The way takeout eaters typically place an order is a good indication of whether they match this stereotype – or not.
For brands clued-up on the ordering habits of their customers, our data sheds light on why they order fast food and their main reasons for choosing one QSR over another.
Many who say their go-to mode of ordering is via the internet will also order in-person, and vice versa.
But this analysis helps us pinpoint the main areas of differentiation between those who have a clear preference.
Age accounts for some of these differences, but not all.
A greater part of boomers usually order in-person than online (52% vs 16%), for example. But by the time we get to Gen Z, ordering tendencies are relatively balanced (38% vs 46%).
A higher portion of Gen Zs typically order in-person than millennials, so we can’t assume the physical restaurant will fade with each generation. QSRs just need to ensure this experience continues to progress alongside its digital alternative.
Compared to their online counterparts, in-person takeout eaters are much more likely to choose a QSR based on the cost of a meal and its level of convenience, as a higher number order fast food when they’re short on time or on the move.
They demonstrate more brand loyalty and are less willing to exchange their personal information for free services.
Loyalty schemes are therefore an especially good tactic for in-person takeout eaters, but any app-based programs need to be coherent about how and why they collect data.
At a surface-level, this group conforms most to our traditional understanding of a takeout eater, as particularly eager to save time and money. They come for the food, not the atmosphere.
On the other hand, online takeout eaters are harder to please.
They’re more fickle and likely to choose a QSR off the back of discounts or rewards. Entry into competitions, exclusive content, and live chat boxes are also stronger purchase drivers within this group.
When it comes to their motivations for ordering, wanting more variety, socializing, and celebrating special occasions stand out; they don’t just want food to be filling, but also adventurous and enjoyable.
And price is less of a deciding factor.
More interested in plant-based diets and willing to pay a premium price tag, they’re 20% more likely than in-person orderers to say they’d spend more on an eco-friendly version of a product.
For these reasons, third-party websites and QSRs who conduct a large part of their business online should pay increased attention to matters of social responsibility and aim to diversify their menu.
The fast food industry needs more nourishment.
When the pandemic kicked off, many wondered whether the cooking boom would threaten the revenue of QSRs.
If anything, COVID-19 has prompted further engagement with the fast food industry.
In July, 4 in 10 consumers across these countries admitted to cooking more. While it’s natural to assume this group would grow less eager to order takeout, they were actually 26% likelier to plan on using food delivery services more post-outbreak.
It appears many who’ve upped their cooking frequency have balanced this habit by also increasing their fast food consumption.
On top of this, the home cooking trend has other implications for the takeout industry.
More conscious of what goes in their meals, there’s increased demand for ‘wholesome’ food. This has spurred McDonald’s to look for new ways to simplify its ingredients and serve more fruit, vegetables, and grains in Happy Meals.
There’s often a gap between what consumers say they’ll do and what they actually end up doing.
Thankfully, our article on sustainability showed that, this time round, consumers weren’t just talking about the importance of being eco-friendly, but had begun taking action.
And the same can now be said of our physical health.
Two-thirds of takeout eaters have made a positive change to their diet in the last six months.
What’s more, almost half of takeout eaters with an interest in vegan or vegetarian food have either cut down on meat or been eating more plant-based foods.
Given how slow-moving the transition to meat-free diets has been, the extent of this shift is impressive.
Companies will benefit from changing consumer perceptions of takeout food – from greasy, to nutritious, and irresponsible, to sustainable – and creating a health halo for their brand.
The Too Good To Go app, which allows eaters to pay reduced rates for restaurant food about to go in the bin, demonstrates how QSRs can drive guilt-free dining.
Along with initiatives that make eating out more eco-friendly, nutritional information needs to be readily available so tomorrow’s eaters can ensure their orders and newfound health regimes align.
Takeout services can even embed themselves in the cooking trend by allowing customers to see what their meals really consist of. Deliveroo has already blurred the line between meal delivery and takeaway services by offering pre-made BBQ boxes, complete with how-to video tutorials.
Ultimately, greater numbers of takeout eaters are looking to health-proof their orders and leading franchises have an opportunity to rethink fast food.
At the end of the day, the winners in this space will be able to differentiate themselves by offering experiential, nutrient-packed foods alongside the standard chicken sandwich.