March 23, 2014
"You look at the numbers that Starbucks puts out, and it's pretty amazing," said Brandon Rhoten, vice president of digital at Wendy's. Everyone in the retail and restaurant community we (LTP) talk to is amazed by the number Starbucks just revealed --> 14%. That's the percentage of purchases that come from mobile payments at Starbucks' stores now.
Wendy's is rolling out a program that lets customers pay using their smartphones, targeting younger consumers. The Wendy's Co., based in Dublin, Ohio, has been testing the mobile payment option over the past year and said the majority of its roughly 5,800 U.S. locations are now ready to accept the payments. The move reflects a push by fast-food chains to court younger customers by tapping into the attachment they have to their phones.
"If they want to come in and give us business, we want to allow them to pay the way they want to pay," Craig Bahner, chief marketing officer for Wendy's, said in a phone interview.
Last year we reported about how Burger King is staying at the top of Mobile Payments and is doing pilots. Burger King had introduced a mobile payment service for its fast food chain in 2012 with Firethorn Mobile Inc. Now they are coming up with an application that will allow customers to pay for Whoppers with their smartphones. The program will be introduced next month and should be in all of Burger King’s more than 7,000 U.S. locations in a few months, Bryson Thornton, a spokesman for the company.
Fast-food chains including McDonald’s Corp. and Dunkin’ Brands Group Inc. are competing to quickly introduce the best loyalty programs and smartphone apps to try to attract millennials and teens. Dunkin’ Donuts rolled out a rewards programs to all of its domestic shops in January.
There is no clear cut technology that is really industry leading (debate on NFC, QR codes, Beacons, etc.) and neither there is a clarity on what business model to adopt in mobile payments. For e.g., McDonalds is known in the industry for its meticulous planning of any changes. But at a recent investor conference, Chief Financial Officer Pete Bensen noted it would have to do things that were a "little bit unnatural for McDonald's" to stay on top of digital trends.
"We're going to have to put some things out there that we know are not 100 percent perfect. But if you wait in this space until everything is 100 percent figured out, then you're going to miss the whole opportunity," he said. McDonald's isn't alone in still figuring out exactly how it wants to approach mobile payments and loyalty programs. Chipotle is still experimenting with the options as well.
But Starbucks and Wendy's are different. One is daily coffee while the other is occasional food. So would the effect be similar?
But Rhoten said Wendy's saw promising trends in tests, including increased visits. The app doesn't yet offer discounts or a loyalty program, a feature that's considered a way to help cultivate customer loyalty.
To pay with the Wendy's app, customers tap the app to pull up a six-digit number they tell the cashier, rather than holding up their device to a scanner. Burger King also said its app will give customers a four-digit number they tell cashiers to make a payment.
"That's a real benefit when you think about cars going through pickup windows," Bahner said.
The rollout comes as Wendy's works to revamp its image to be more in line with chains like Panera Bread, which charge a little more than traditional fast-food chains like McDonald's and Burger King. That push has included remodeling of its restaurants to have a more inviting feel, as well as the addition of menu items such as the Pretzel Bacon Burger that command higher prices.
Source: AP and Others