QSR of the Future: Built on Connected Experience Today

The New Era of QSR: The Powerful Forces Reshaping the Industry

Let’s Be Honest.

You don’t just hope for a seamless experience whether at your favorite retail store or local bank—you’ve come to expect it. The same is true for your customers when they head to their favorite spot to grab a quick bite.

Success for QSRs can no longer rest on the previous status quo of food service speed or proximity to the customer. With the rapid changes necessitated by the events of recent years, convenience has taken on a whole new meaning. QSRs are faced with increasing customer and employee expectations alongside the added challenges of rapid technological innovation, supply chain complications, and an unstable economic environment.

The Key To Success?

Understanding what your customers truly want when they order from their app or a drive-thru—and it isn't just about a burger versus a chicken sandwich. You need to understand the right way to connect with them in innovative ways. You need to understand the right way to connect with them in innovative ways, at any time, and in a way that is true to the unique core of your brand.

What “convenience” means to your customers is more than an app. Digitally-driven, channel-less, highly personalized experiences are no longer aspirations—they are table stakes.

Thankfully, the QSR industry has responded quickly.

Several brands have already set the precedent, from mammoths like McDonald’s (40,000+ restaurants) and Starbucks (35,000+ locations) to smaller operators like sweetgreen (900+ stores). In fact, in 2021, sweetgreen surpassed Starbucks’ percentage of digital engagements, with 68% of sweetgreen sales coming from digital channels, compared with 52% for Starbucks.

From QR-enabled loyalty perks to contactless orders and delivery—and everything in between—the future of QSR is already here.

The Current State of QSR

By and large, QSRs have stayed on a steady track of slower evolution—that is, until recent years, when external forces like a global pandemic drove the necessity to rapidly innovate. New technology quickly emerged to help restaurants to remain open. Contactless payment, QR code menus, and third-party delivery apps were catapulted into the spotlight. The latest innovations we see changing the shape of the QSR experience now, including robotic technology and ordering through virtual assistants like Alexa, would not have been possible without this accelerated level of digitization.

It’s undeniable that customer expectations deeply influence digital transformation, and vice versa. Today, consumers expect a high-quality digital and physical experience—every time.

Innovations & Trends in Today’s QSR

Many tech advancements are transforming the QSR customer experience, from ordering and delivery to loyalty programs:

One of the most intriguing innovations is the rise of ghost kitchens. More than half (52%) of customers are willing to order from these “virtual” restaurants. Ghost kitchens allow restaurants to streamline operations and focus solely on food preparation, reducing overhead costs associated with traditional dine-in spaces.

The ordering experience continues to evolve, particularly the use of self-service kiosks. Sixty-one percent (61%) of customers prefer using kiosks to place food orders thanks to user-friendly interfaces, integrated payment options, and efficient order processing. Additionally, voice-automated ordering has gained widespread acceptance, with 79% of customers open to using it. McDonald’s has started testing voice ordering technology to enhance efficiency in drive-thru and dine-in experiences and Wendy’s is pioneering a voice-powered AI technology for ordering beverages through Coca-Cola freestyle machines.

An essential part of QSR digital transformation is the adoption of contactless payment options, with more than half of Americans using contactless options like Apple wallet and tap to pay. Cashier-less restaurants are also on the rise (i.e. a digital order-only location), with 62% of customers likely to order from one if given the opportunity.

Unified commerce platforms and point-of-sale innovations are complementing and enhancing digital and in-store experiences, replacing outdated equipment, providing valuable cross-channel insights, and focusing on the real-time needs of customers. For example, Whataburger, Chick-fil-A, and In-N-Out Burger all have hand-held point-of-sale devices, allowing employees to roam the drive-thru lane and take orders directly at customers’ cars during busy times.

Delivery innovations continue to focus on customers’ preferences. Fifty-three percent (53%) of customers opt for contactless delivery more than half of the time. Restaurants are investing in driverless and drone delivery, and 47% of customers are open to it. The majority (61%) of restaurateurs will continue to offer direct food delivery.

The Stellar Take

Avoid looking at and investing in these innovations as one-offs. As the QSR cards get reshuffled—and lines are redrawn between who your competitors, partners, and suppliers are today and tomorrow—examine how these advances can impact and improve your business, delight customers, reward your people, and engage your suppliers. Consider what the right balance looks like and how you can join multiple innovations into a connected experience that benefits all stakeholders.

QSR Headwinds: Building Resilience Through Innovation

Despite the exciting innovations in the QSR space, the industry is not without its challenges. Three major forces are at play.

The Economy

Economic factors, particularly inflation, are a pressing concern. Rising costs across the board, from ingredients to labor, are putting pressure on profit margins. In response, QSRs are actively looking for ways to automate and streamline operations. They are exploring technologies and strategies to reduce food waste, optimize supply chains, and enhance the efficiency of kitchens. These efforts are not only aimed at maintaining affordability for customers but also at ensuring the sustainability of their businesses.

The Workforce

The talent gap is another significant challenge. In 2021, the overall turnover rate in the QSR sector was 144%. With 31% of restaurants being short-staffed for an extended period, we are seeing QSRs augment their workforce by automating repetitive and time-consuming tasks, such as order processing and food preparation.

The CX Gap

Our global experts have uncovered a concerning (and growing) gap between consumer expectations and the actual customer experience (CX) provided. According to the Stellar Elements CX20 Global Report, 81% of business leaders believe they excel in CX, but only 20% of customers agree. Common pain points for QSRs include deficiencies in employee knowledge, service consistency, and product quality.

The Stellar Take

This widening CX gap presents a significant risk, as customers are not as loyal as they used to be and the majority will not hesitate to switch brands after a few bad experiences. To retain and grow your customer base, you must address these gaps proactively.

The upside? These challenges will spur further innovations within the industry to enhance efficiency, optimize customer experiences, and ensure your long-term viability in an ever-changing marketplace.

The Connected QSR Imperative

In today’s landscape, QSRs need to adapt and evolve in order to thrive. The key is taking a holistic approach. Tie together every aspect of your operations, from customer interactions to internal operations and partnerships, with the use of digital technologies, analytics, and data-driven insights. The connected QSR imperative is about finding the right balance for how you streamline operations, enhance customer satisfaction, and drive growth across your business.

Digital channels, mobile apps, and online ordering are integral to the customer experience and QSRs must not only offer convenient ordering and delivery options, but also leverage data-driven insights to personalize offers. Seamless integration of online and offline experiences is key to meeting customer expectations and staying competitive.

The new age of algorithms and automation presents great opportunities. You can leverage algorithms to optimize menu promotions, pricing strategies, and supply chain operations. Automation, from kitchen robotics to customer service chatbots can streamline processes and reduce operational costs. However, successful implementation requires an integrated strategy that addresses data quality, analytics, content management, and agile ways of working.

The Stellar Take

This “tsunami” has reshaped how QSRs engage with customers. Still, you can only deliver the experience your culture supports. This is especially true in the dynamic environment where QSRs compete.

There are many adjectives we could use to describe the QSR landscape of the past five years, but two words we rarely hear are “stable” and “certain.” Changing demands and shifting expectations are the norm.

Some stressors are social, but most have to do with trying to keep pace with this constant change—while still being flexible enough to adapt to supply chain challenges, workforce demands, and new technologies in ways that matter to customers and staff. As a result, most organizations work backward from a place of complexity, as opposed to moving forward with a customer and employee-centric lens.

Critical to success is design that is led and informed by human needs. Then, aligning technology and data in a realistic way to deliver on what matters. A product-first strategy is just not as effective or efficient as being customer-centric.

The Main Takeaway

The connected QSR imperative requires a multifaceted approach that combines technology, data, and a customer and employee-centric mindset. It’s natural to focus solely on the customer, but QSR leaders can’t forget about the importance of their employee and franchisee experiences.

After all, the best way to make a QSR successful is to make each franchise successful. Focusing on internal improvements, such as streamlining communications and internal operations, will lead to improved customer experiences, stronger franchisee-corporate relationships, reduced turnover, enhanced operational efficiency, and greater brand consistency. However, QSRs must recognize that technology is just one piece of the puzzle. The majority of the effort should focus on aligning toward a customer-first approach.

The Practical Roadmap to Success

Players like McDonald’s, Starbucks, and sweetgreen have disrupted the space with digital innovations to meet increasing expectations. If you are not the disruptor, how do you win in this new environment? How do you leapfrog into a position of strength?

Here’s a practical and field-tested roadmap to charting a path to success that is unique to your brand’s core:

1. Know Your Customer Inside & Out

The first and most crucial step in becoming customer-centric is understanding your customers deeply. Who are they? What are their preferences? What motivates their choices? Collect data through various channels, including surveys, online orders, and personal interactions, then invest in systems to analyze that data effectively. The better you know your customers, the more you can cater to their needs.

2. Map Out the Customer Journey

Once you’ve gained insights into your customers, map out their entire journey with your QSR. Identify touch points from the moment they consider your restaurant to the post-meal experience. Consider aspects such as ordering, payment, food quality, and customer service. Leverage the power of customer journey analytics, real-time orchestration, and a unified customer intelligence repository. This holistic view enables you to identify pain points and areas for improvement.

3. Personalize the Experience

Customers appreciate personalization. Place your customer at the center of your operations, ensuring that every interaction adds value and meaning to their journey. Tailor your offerings and marketing efforts based on individual preferences. Use data-driven insights to recommend menu items, promotions, and special offers. Implement loyalty programs that reward frequent patrons. The more personalized the experience, the more connected your customers will feel to your brand.

4. Break Down Organizational Silos

Customer-centricity requires breaking down silos that separate the operator, the customer, and the employees. These divisions, while they may have had their purpose in the past, now act as barriers to delivering exceptional experiences. While many claim to prioritize customer experience, it becomes a hollow statement without recognizing the inherent value of operators and employees. They are not just cogs in the machine, but the essence of what makes your QSR stand out. Encourage collaboration among teams responsible for various aspects of the customer journey, such as marketing, operations, and customer service. Ensure everyone shares a common vision of delivering exceptional customer experiences.

5. Invest in Employee Empowerment

Happy employees make for happy customers. Empower your staff by providing them with better support, training, and onboarding. Encourage them to take ownership of their roles and responsibilities. When employees feel valued and empowered, they’re more likely to go the extra mile to enhance the customer experience.

6. Prioritize Franchisee Satisfaction

If your QSR operates through a franchise model, prioritize the satisfaction of your franchisees. Their success is intrinsically tied to your brand’s success. Provide franchise owners with the necessary tools, support, and resources to run their establishments efficiently. When franchisees thrive, your brand thrives.

The main goal of this transformation journey is to create delightful experiences that align with your brand’s values and positioning. Transforming your QSR into a customer-centric powerhouse
is not a single project, but an ongoing commitment.

Placing your customer at the center of your operations, ensuring that every interaction adds value and meaning to their journey, will ensure long-term success in the competitive QSR industry.

Stellar Outcomes: Build Better Experiences

You want growth, customer loyalty, and differentiation. Your customers want what they want: when, where, and how they want it.

Stellar Elements helps QSR leaders close this gap, connecting business goals with customer needs. Our 1,000+ experts around the globe have been helping QSRs achieve digital transformation and exceed customer expectations for many years.

Stellar Elements helps you connect all the dots—between customers, employees, and your supply chain, and between the customer experience, your brand, and the latest tech.

We deliver outcomes in three key areas

We work to cover your QSR transformation from beginning to end

Personalizing the QSR customer experience from end-to-end requires orchestration across channels—a capability that most brands have yet to fully master. Employee experiences are rarely included in the same analytics data and yet that data dramatically influences customer experience.

The result? Transformed customer experiences, employee experiences, and supply chain processes.

• Designed and developed an app that enables corporate and franchisees to communicate in real-time and improve operations. Despite being an optional app, it has been adopted by 98% of franchisees.
  

• Helped the QSR to build out its POS system in non-traditional ways. Because the POS system is now cloud-based, orders can be fulfilled in a variety of ways, such as a food truck, pop-up tent, or even right outside the restaurant during peak times, improving customer convenience and cutting down wait times.
  

• Previously, the QSR did not prioritize delivery. Stellar Elements integrated large-scale, third-party partners such as UberEats, Doordash, and Grubhub to offer this service to customers and access a previously untapped revenue stream. This channel now represents $2B in revenues.
  

• Helped the QSR invest in the right technology and modernize its IT infrastructure, from the foundational architecture to the customer-facing apps. Bringing the QSR from dated, 1990s code to the latest in native development made operations much more efficient and empowered employees to make data-backed decisions.
  

• The design system implemented by Stellar Elements ensured consistent branding for anyone on the brand marketing and digital transformation teams. New products can now be developed with the correct use of branding.
  

• Launched a targeted marketing tool to increase customer engagement and bring in additional revenue. Three-quarters of stores are currently using this tool to connect with 22 million customers.

The result? Stellar Elements created a first-of-its-kind mobile app, giving Tim Hortons a competitive edge, and establishing the company as an innovative leader in the QSR space.

• Migrated Tim Hortons’ legacy POS system over to a modern solution leveraging host card emulation (HCE) tap and pay functionality. The new POS system allows for purchases via barcode scanning, gift card purchases from any device, and mobile payments.

• Developed and launched the TimmyMe app, the world’s first HCE-enabled closed-loop mobile wallet utilizing tap-and-pay functionality. The app was a quick success, seeing a 10% uptake in the 1st month of launch among Tim Hortons’ total addressable market. To date, 30,000 customers use the app at least twice a week and 2,000 transactions are made per day during peak times.