Fast Casual Takes Early Lead in Technology Race

Fast casual, the clear standout segment of the restaurant industry for the past decade, has had several advantages contributing to its growth and to its gains in market share at the expense of quick-service and casual-dining brands. Consumers have been drawn to fast casual’s service, ingredient quality and price point, and now, with the latest update to Consumer Brand Metrics, Technomic has uncovered another big appeal the segment has relative to competitors: the integration of technology.

As we pointed out in “The Tech Tide Has Turned,” a new report on the latest findings from Consumer Brand Metrics, fast casual had a higher segment average score than quick service and full service on an overall Technology Composite Score. The measurement comprised ratings for more than 130 brands on three attributes: integration of technology into the ordering process, ability to pay for my order using technology, and this restaurant’s use of technology improves my experience.

Led by Pollo Campero, The Habit Burger Grill and Panera Bread, the fast-casual segment averaged 34% of consumers strongly agreeing with all three criteria for restaurant brands within the sector. Quick service and full service averaged a few percentage points less than that.

Even despite its faster sales growth than quick service the past few years, fast casual’s outperformance on the crucial metric of technology adoption is somewhat surprising, given that the quick-service segment includes the national pizza delivery chains. Domino’s, Papa John’s Pizza and Pizza Hut are among the top five highest-scoring brands for integration of digital-ordering methods, which makes sense since the pizza segment is where most of the restaurant industry’s experimentation with technology and best practices originate.

Yet quick service averaged 43% of consumers rating its brands “very good” on the integration of technology into the ordering process, behind the 46% of people who said so of fast casual. What is the latter segment doing well? Several brands have adopted online ordering for concepts that don’t sell pizza, such as Wingstop or The Habit Burger Grill. Others are leading the way in the adoption of touchscreen ordering kiosks like Panera, Noodles & Company and Pei Wei Asian Diner.

Panera in particular is investing heavily into “Panera 2.0,” which will integrate more technology to speed up service in its cafes while allowing the chain to expand its Rapid Pick-Up service for food ordered ahead of time via Panera’s website or mobile app. Eventually, the brand hopes to build off these capabilities to supercharge growth of catering and home delivery. Other fast-casual players have similar ideas, from Potbelly hoping to grow catering sales with digital ordering, to fast-casual pizza chain PizzaRev launching delivery with the Postmates smartphone app.

However, all three industry segments have lots of room to improve in the third metric measured by Consumer Brand Metrics. Fast casual, quick service and full service each scored an average of only 13% of consumers who strongly agreed that their brands’ use of technology improved the guest experience. Most of the chains that performed above the average on that criterion had integrated their loyalty programs into a digital platform like a branded smartphone app. Restaurant chains in any sector should consider that opportunity seriously going forward.

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Darren Tristano

Darren Tristano is President of Technomic Inc. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations.

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