Digital transformation has become a major goal for the QSR industry. It’s no longer a competitive differentiator or a “nice to have”; it’s how business is conducted and what customers expect. Thus, 71% of food service businesses said that digital transformation is the most important factor in organizational agility.
In the current landscape, digital transformation has powered greater personalization and flexibility in how brands interact with each customer. And customers expect this personalization across industries. This creates both challenges and opportunities for QSRs. In this article, we’ll examine four essential steps in the digital transformation process:
1. Developing a strong online presence.
2. Aligning digital and in-store experiences.
3. Operational efficiency.
4. Training and supporting staff.
Building a Solid Foundation for Digital Transformation
The first step in any digital transformation journey is building a solid foundation. This starts with conducting a thorough review of your current tech stack. Examine how it's meeting your current goal and whether it can expand to meet any future or planned goals. Once you know what you have and how it's supporting your work, understanding what you need will be clearer.
Next, think about your restaurant business goals. Define what they are and what you need to reach them. Then consider what technological things you'll need to support these goals-- both in terms of your tech stack, online presence (e.g. web and social media), mobile apps, and other digital channels.
Now you can draft a plan. Take that plan to other decision makers and key stakeholders in the business. This can even include your franchisees if that's applicable. The idea is to drum up support and enthusiasm for your digital transformation. The only way you can do this is by clearly communicating what needs to be done and the benefits associated with doing it.
Once your plan is in place and you have the support you need, you can establish a digital transformation team. This often means partnering with experienced technology providers; they understand the digital transformation process and can help guide you through potential challenges.
Download our Phygital Index Report to learn what digital transformation strategies your guests expect from your brand.
4 Essential Digital Transformation Strategies for QSRs
Developing a Strong Online Presence
We're going to skip over the details of assessing your tech stack; that will be different for each business. Let's assume that you have everything in place to support your digital transformation. What's the next step?
Many restaurants start by building a strong online presence. This begins with your brand website -- your online storefront. This may be a new customer's first impression of your brand, so it's important to get it right. We're talking user friendly navigation, brand-appropriate text and images, and attention to the overall customer experience. It’s important to use search engine optimization (SEO) to ensure that customers can find your site online.
Online ordering and mobile apps also fall under this category. Of course, a good user experience will make all the difference for your customers. At the back end, make sure that any online ordering platforms implement seamlessly with your in-store operations and tech systems: payment, inventory, customer data platforms, and so on. You should also consider partnering with third party ordering systems and delivery systems so that you can expand your reach.
Aligning Digital Experience with In-Store Operations
Most restaurants exist in a physical location, not just online. So, it's important to bridge the gap between the digital experience and the in-store experience. There are obvious ways you can do this, such as utilizing brand colors, similar imagery and signage, in store kiosks, digital displays, et cetera. But let's talk about some of the less obvious ways you can align the digital experience with the physical experience.
First, we recommend using a customer data platform that combines customer relationship management software with data collection and analytics capabilities. This makes it easier to provide a personalized customer experience both online and offline. The customer data platform allows you to analyze customer data and provide personalized recommendations and interaction to each customer. For example, you can customize the featured offer on the digital kiosk for each guest or integrate their loyalty membership information to make it easier to redeem reward points.
Another important aspect of aligning experiences is consistency. Ensure that the menu is consistent across different channels (aside from the necessary differences of a delivery menu versus an in-store menu). Make sure guests can use their preferred payment methods – i.e. offer digital payment methods in store if they are popular with your customers. And, online or off, make the ordering process as simple and user friendly as possible. This will avoid a lot of needless frustration.
Embracing Technology for Operational Efficiency
We have discussed many ways that digital technology can enhance operational efficiency for QSR and fast casual chains. We'll mention them very briefly here and provide links if you want to do a deep dive into the subject:
In-store digital kiosks have been shown to increase check sizes, alleviate long wait times, reduce in store lines, and take some of the pressure off employees. They also help with the ongoing restaurant labor shortage, as they free up staff members for other tasks.
Integrated kitchen display systems, which work with online ordering systems and other critical pieces of the text stack, reduce errors (and thus food waste) and streamline the preparation of orders.
Using customer data platforms and data analytics, restaurants have been able to increase personalization and customer satisfaction. AI has also entered the food service world and is transforming everything from inventory management to customer retention.
Training and Supporting Employees
Digital transformation has also extended into how we train and support employees. Online learning modules have standardized much of the training process, allowing restaurant chains to provide a comprehensive and reliable way to familiarize staff with new technologies and processes across locations. There's a carryover effect to this that can be seen in customer experience; when training is standardized, the customers experience is more consistent from location to location.
QSR's have also leveraged online training to provide support and resources to managers and supervisors. This can help them address many questions and challenges that may arise using a knowledge base or some other self-serve option. Again, this makes the entire process more available and also more efficient.
As the digital transformation continues towards maturity, we'll see a more customer-centric mindset begin to develop. Customer experience will become more important and more consistent throughout the entire chain, which will lead to greater customer satisfaction.
Measuring Success and Iterating During Digital Transformation
In the rush to embrace digital transformation, it’s important to think about how you’ll measure success. Most QSRs already track several key performance indicators (KPIs); many of these can also show the effects of digital transformation over time. So, at the very start of your digital transformation journey, establish which KPIs you’ll use to measure progress. Some common examples include:
Customer satisfaction score (CSAT).
Customer lifetime value.
Customer acquisition costs.
Customer retention rate.
Average order value.
Order completion time.
Revenue from digital (app and online) channels.
Expenses / costs (labor, cost of goods sold, etc.).
And don’t forget about getting feedback from real live guests. These can provide valuable information on the customer experience that would otherwise go undetected. Added to your ongoing analytics efforts, they’ll provide a good sense of how effective your digital transformation strategies are.
There’s one last ingredient to digital transformation success: flexibility. Your strategies don’t have to be set in stone. Instead, you should regularly monitor market trends, consumer behaviors, and your own KPIs and make any necessary adjustments. Scheduling reviews and check-ins can help you stay on top of all the changes in this fast-changing area.
QSR Digital Transformation in 2023 and Beyond
In 2023 and beyond, digital transformation will continue to be high on QSRs’ list of priorities. Before you embark on any major changes, be sure to do your preliminary research and set the goals you want to achieve and the KPIs you’ll use to measure progress. Examine how digital tools can enhance your customer experience, your operational efficiency, and even your employee training and support. And build some flexibility into your process; digital transformation is a long game, but it offers major rewards to companies that do it right. If you’d like some help planning your digital transformation, contact Tillster today.
