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People eating at a restaurant
By Mark Wasilefsky
• Jan 18, 2018
Head of Restaurant Franchise Finance Group at TD Bank

The idea of getting a full meal with the click of a button used to evoke Jetsons-style visions of a fantastical futuristic world. But mobile ordering has made it a reality—the way we get our food is getting progressively more digital, and the quick-service restaurant industry is leading the charge.

A quick-service restaurant—or QSR—might be more familiarly known as a fast food establishment. Generally, QSR chains serve up portable fare like hand-held sandwiches, pizza, and basic salads. Not known for their décor or ambiance, they often have a uniform look and do a brisk delivery or to-go business.

But don't be fooled by the no-frills nature of these businesses—infrastructure-wise, they're keeping up with the times. Forty-eight percent of QSRs surveyed by TD Bank plan to add mobile technology in the future. It's easy to see why: Orders placed via smartphone and mobile apps will become a $38 billion industry and make up nearly 11 percent of all quick-service restaurant sales by 2020, according to Business Insider Intelligence reports.

With more consumers seeking choices in how and where they get their meals, many leading QSRs in the U.S. are already seeing benefits in productivity and profitability from digital ordering. Some pizza chains, for example, reported an 18 percent increase in customer spend from online/mobile orders vs. phone orders, according to the Business Insider report.

Challenges vs Opportunities

The journey hasn’t been seamless for many restaurants. Developing and installing the digital infrastructure, as well as training employees to incorporate digital ordering into their workflow, is complex and time-consuming. In recent years, some high-profile quick-service restaurants ran into some well-publicized snags with mobile app development and delays in rolling out the process. Despite these challenges, it has become clear that mobile apps and ordering and QSRs are a winning combination, and restaurants may find that the near-term financial and efficiency benefits of adopting a digital ordering system can outweigh the set-up costs and associated technological challenges.

Targeting Millennials

Millennials dine out an average of five times per week—greater than any other generation, per a Bankrate study of dining habits. Digital ordering apps present an opportunity for restaurants to connect with younger consumers where they spend hours each day: their smartphones. Based on these buying habits, it's likely that restaurants that adopt mobile ordering and/or reward apps can expect continued appetite for their brand among this tech-savvy demographic.

Increased Efficiency From the Kitchen to the Back Office

In addition to helping to drive sales, mobile ordering apps can increase a restaurant's overall efficiency and productivity. Mobile or in-store kiosk orders can make it quicker for customers to get their food, as fewer employees are needed, and long lines and wait times become a thing of the past. With digital ordering, restaurants can serve more customers per hour and be more profitable.

Digital tools also minimize a restaurant's cumbersome cash transactions. Even beyond daily concerns like counterfeit bills and incorrect register balances, trips to the bank or armored car collections can be disruptive and expensive. Going digital can drastically reduce the costs of dealing with cash.

Multi-app Integration and Digital Promotions Can Boost Sales

A digital system can open the door for innovative restaurant promotions. Why not place an order via Alexa? Or develop a consumer rewards program that is available only for mobile app users? Additionally, providing delivery options helps meet the preferences of this fast-growing segment of QSR customers who rely heavily on digital ordering.

Digital payments can also address challenges that may arise in the future. As wages increase, restaurant owners will want to make sure their current employees work as cost-efficiently as possible. Incorporating digital order management into a restaurant’s workflow is a significant move in that direction.

Today's restaurant customers expect fast, seamless and accurate ordering from their smartphones and tablets. Smartphone and digital integration has revolutionized virtually every industry and food service is no different. Now more than ever, QSRs are realizing that migration to digital-payment systems is the key to staying competitive.

A version of this article originally appeared in QSR Magazine

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