Technology

Starbucks, Panera Bread, McDonald’s winning the digital game

iStock

November 12, 2020

Digital sales will make up over 50% of limited-service restaurants' business by 2025, according to a study by Incisiv, which also predicted that although digital sales will decrease in 2021 as COVID-19 winds down. Digital sales through September 2020, for example, were 70% higher than pre-COVID estimates.

The findings, which came from Incisiv's annual Limited-Service Restaurant Digital Maturity Benchmark report also found that Starbucks, Panera Bread and McDonald's are still leading the industry when it comes to the digital customer experience.

Based on performance analysis over four stages of the customer journey — research and discovery, digital ordering, order fulfillment and customer engagement and service — the top 10 brands were:

1. Starbucks.
2. Panera Bread.
3. McDonald's.
4. McAlister's Deli.
5. Pizza Hut.
6. Domino's.
7. Chipotle.
8. Moe's.
9. Panda Express.
10. QDOBA Mexican Eats.

"While fulfillment is the area that has matured the most in the digital buying journey, only 25% of guests are satisfied with the delivery and fulfillment experience," Amar Mokha, chief operating officer of Incisiv, said in the report. "This should be a huge wakeup call for LSR restaurants. From our standpoint, the chains that look closely at changing guest expectations in the digital realm will rise to the top as winners. This means adding capabilities around menu filtering with things like allergens or vegetarian, providing estimated times of arrival for deliveries, check-in prompts to ensure freshness of food and offering assistance through things like live chat."

Other findings included:

• Delivery services have enabled restaurant survival: The share of sales through delivery is expected to grow to 23% in 2025 vs pre-COVID forecasts of 15%. What's more, more than 90% of the top 50 LSR chains now have partnerships with third-party delivery services.
• Curbside takes centerstage: Curbside pick-up adoption has experienced a 5 times increase, growing from 15% to 71% during the pandemic. This growth makes restaurants the most advanced segment among all other retail segments including grocery, apparel and others.
• Customers are less enamored with restaurant fulfillment: LSR culinary guests were largely satisfied with the initial stages of the buying journey (search and ordering) but far less satisfied with the execution of available fulfillment methods and customer engagement techniques.
• New capabilities become the norm: The onset of new segments such as virtual and dark kitchens as well as third-party delivery offered more choice to guests but also blurred the lines between formats.

The companies benchmarked are the top 52 by annual revenues in US and Canada, with 120 digital attributes studied for each banner, 20 million data points from Incisiv's industry data pool, and 8 million data points from Incisiv's Q3 2020 Consumer Survey.