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Analytics-driven digital merchandising in QSR drive-thrus

Dynamic signage and media expert Lyle Bunn takes a spin through analytics and merchandising in the drive-thru.

Analytics-driven digital merchandising in QSR drive-thrus


By Lyle Bunn, Bunn Co.

Consumers love the convenience and speed of drive-thru at quick-service restaurants, and so do the foodservice establishments that offer this safe, easy service option. Drive-thru can account for as much as 70 percent of location revenues and establishes the location as the "go-to" place for future visits.

Whenever the term "digital signage" is used, the term "analytics" is increasingly used in the same sentence or quickly follows. Organizations want their digital merchandising to both reflect and provide consumer insights, preferably simultaneously. Where forward-thinking retailers such as Walmart have already embraced this approach successfully, QSR operators are now integrating analytics in their digital media use, and drive-thru success can improve.

With so much to be gained, QSRs are looking to business-enabling approaches that move customers through the order, payment and fulfillment processes as quickly as possible while getting the order correct and bringing the patron back as soon as, and as frequently as, possible. Loyalty is enhanced when the drive-thru journey is a positive one.

Technologies will improve the cost/benefit equation in QSR drive-thru by significantly contributing to these critical success factors:

  1. Creating the optimal combination of minimizing order time while maximizing order value.
  2. Branding of the establishment and its products.
  3. Assuring the service experience is better than competitors'.

To achieve these business-building goals, QSRs are digitizing the order process. This digital transition to daypart menus can minimize effort and simplify menu board composition, while instilling loyalty, bringing the patron back quickly or motivating gift card or large order sales.

Jeff Lloyd, the manager of information technologies of Arby's franchisee group T.G.J. & Co., characterizes the priority they place on drive-thru analytics as "a system to identify and improve service based on specific objectives. Ultimately we want to identify opportunities to improve the customers' overall drive-thru experience."

He adds, "While having to work within the products and promotions provided, analytics allows us to customize our digital merchandising to most appeal to our customers, and to further improve performance by highlighting strengths and weakness as soon as possible through unit or multilocation comparisons of sales and service times."

"Digital drive-thru is about velocity and targeted selection," said Chris Riegel, CEO of STRATACACHE, the provider of digital signage to McDonald's, Dairy Queen and Corner Bakery among others. "So much of the legacy drive-thru menu board space is used inefficiently and is a time-consuming distraction as the customer is overwhelmed with menu options that are not relevant to them. This 'visual overload' with a barrage of menu choices in the attempt to show everything on the menu can be overwhelming to the eyes and the brain, making selection decisions more challenging and increasing order times … A cluttered menu board from 1991 does not serve the consumer or the brand well, both of which want easy selection and fast service."

As QSRs use the capabilities of the dynamic digital drive-thru menu and the animation of product images and their promotional messages, business value is being realized.

Identification of the patron vehicle through toll-road radio frequency identifier tags or license plate numbers can help to speed up recurring drive-thru orders by suggesting a current order based on history. As the use of mobile devices increases, methods for patron recognition are also increasing, but improving drive-thru business productivity hinges on the combination of digital merchandising and the order-confirmation board.

Speed of order placement and confirmation is the key to drive-thru success. A Techknow Inc. patent defines an approach to faster, correct ordering that maximizes profits, branding and revisit frequency.

"QSRs need to think like Amazon in helping serve the customer better," notes Riegel. Previous order patterns, mining of order history, use of relevant environmental data such as temperature and day of week and integration of loyalty plans are all data points that can be enabled with cameras/smartphones/beacons or Wi-Fi and other customer identification technologies to say to the customer, "I know what you like, and you may also want to consider X, Y or Z."

He referenced the example of Tim Horton's partnership with the Royal Bank of Canada Visa card that further enhances the experience by enabling loyalty transactions, rapid payment and reduced card-processing fees for the restaurant.

"This combination of point-of-purchase graphics for upsell combined with analytics that offer consumer purchase insights and enable location-to-location performance comparisons enables better per-visit revenue achievement and better overall multilocation drive-thru performance" said Rick Elliott, president of Techknow Inc., a provider of order-confirmation board capabilities. He adds that "the QSR can also use this closed communications loop for visual interaction between an ordering customer and the drive-thru attendant to better connect these two parties in the transaction."

The Techknow system provides digital connectivity between the order maker and the order taker to dramatically improve this process. This approach provides point-of-purchase order confirmation text along with product images that add vitality, upsell and cross-sell to the ordering process while encouraging future visits.

This data-driven process provides insights to consumer response and behavior that can further fuel the success of digital merchandising at one location while providing performance data that can compare the performance of one against others in the chain.

"Visual is our new language," as it speeds communications, Paco Underhill of Envirosell has declared. In providing pictures of menu items ordered on the OCB, confirmation can happen more rapidly — and images of upsell items can maximize the order value. Presenting images of other possible order items entices the consumer to add to their order or can motivate a future visit.

Andy McRae, general manager of Dot2Dot Communications, an agent for Scala software, said, "Analytics and measurement mark the difference between a digital menu board and digital merchandising. While it is true that QSRs are seeing a lift from stand-alone menu boards, the benefit is far greater when the content is intelligent and takes into consideration the immediate environment and influences on the target customer. For example, being able to identify the conditions under which you can feature items that are higher margin or perishable make for a much more effective use of inventory.

"Of course, this only becomes feasible to measure if you are integrated with the point of sale system."

The ability of business processes to deliver insights and analytics that can drive revenue improvement is essential to digital media deployment. Time of day and location comparison data within the facility or across properties empower best practices to be applied and continuous improvement to be realized. The data also provides early indicators where staffing adjustments, such as training, are needed.

Time-related throughput provides overall drive-thru performance that can be used to streamline bottlenecks and motivate staff. But the key points of drive-thru real estate are at the order board. The commercial success of the visit occurs at this single point of purchase and engagement with the brand and the location.

Enterprise value from order-confirmation board investment is substantially increased when analytics can track the impact of merchandising messaging as drive-thru promotion. If for example, the data illustrates that greater purchase numbers occur for a particular beverage or desert when promoted with a core menu item, this promotional tactic can be applied to increase overall order value. Using impact data helps the single location to accelerate its revenue goals, but empowers "best practice" across multiple locations of the chain.

Scott Sharon, team leader of START, a consortium of foodservice technology providers, said, "Consumer intelligence helps QSR operators to understand the differences in consumer behavior that exist across different locations, demographics and dayparts … I foresee an explosion in the use of analytics as large chains are now moving forward at the corporate level, and in chains where franchisees have greater flexibility, operators are moving to maximize sustainable business benefits through consumer insights, feedback and communications enabled by available technologies."

The insights from location-to-location comparison clearly point to locations that require remedy to less than optimal drive-thru performance, such as staff training or work balancing.

The customer wait in a drive-thru line or an incorrect order can de-brand the establishment, resulting in a lower drive-thru visit frequency. Speeding up and improving the order experience are seen as the critical success factors.

T.G.J. & Co.'s Lloyd adds, "What we especially like about the analytics engine that we have applied … is the ability to rate and rank our stores' daily performance in the drive-thru by comparing service times from the order point to the completion of the orders via a rating/rankings cloud service."

The solution to the problem of customer order throughput can be easily added to existing or planned drive-through applications, even where digital menu boards are not used, though it empowers this investment.

Providers of drive-thru elements or turnkey systems are excited about bringing this new approach to the sector. Applications such as Techknow's can likely be loaded on the media player and other digital media infrastructure.

"Drive-thru QSR is such a unique and challenging digital signage environment, but it also presents some exciting opportunities for innovation that can tangibly impact speed and quality of service," said Linda Hofflander, director of vertical business for Samsung Electronics. "We see interactivity and mobile integration as key avenues for reshaping the ordering experience, while smart analytics — whether based on facial recognition, car plates or other data – unlock the potential for greater menu personalization and targeted promotions. We are collaborating closely with our partners to address a variety of outdoor digital signage use-cases."

Drive-thru at quick-service restaurants is not what it used to be as both the establishment and the customer enjoy the benefits that improved menu boards, promotion boards, order confirmation, customer awareness and suggestive selling can offer.

Lyle Bunn is an independent analyst, advisor and educator who has assisted hundreds of end-users to benefit from dynamic place-based media. He has helped to train more than 10,000 media professionals and published over 300 articles and guides related to dynamic media, including the popular guidebook "Dynamic Media in Food Services." HE can be reached at Lyle@LyleBunn.com.



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