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    6 Trends shaping QSR Industry for 2024: Through the lens of Data Analytics

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    • DebaduttaSports and Tech Enthusiast
      In a world of opinions and cold numbers, data tells a compelling story.
    15-December-2023
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    Editor’s Note: A comprehensive journey through the 2024 Quick Service Restaurant (QSR) landscape – meticulously framed by data analytics. This exploration unveils six transformative trends reshaping the industry, from digital-only concepts to situationalized customer experiences. Dive into how data intelligence fuels QSR evolution, paving the way for adaptive and customer-centric dining experiences.

    Introduction

    The words “takeouts”, “QSR”, and “Fast food” invoke a handful of brands in the back of our minds. While the mighty Golden Arches started as a small drive-in restaurant called McDonald’s Bar-B-Q by two brothers, Richard and Maurice, a certain Colonel is associated with serving the best finger-lickin’ good chicken on the planet.

    Burger King’s “We Give Up” ad – saw the company go through the entire journey of one loyal consumer from the UK who seemed to prefer the Chicken Royale over the iconic Whopper.

    But why are we talking about them?

    The Quick-Service Restaurant (QSR) - born out of a need for a quick-to-prepare and deliver food and beverage items industry in the United States, is witnessing a profound transformation driven by data analytics, automation, and customer-centric strategies. The data touchpoints in the digital and physical space are immense in today’s time, enabling brands to get into consumer’s shoes – Burger King’s much talked about “We Give Up” ad – where they go through the entire journey of one loyal consumer from the UK but always seems to prefer the Chicken Royale over the iconic Whopper.

    Datapoints leading to insights on consumer preferences leading to hyper-personalisation.

    Market Growth and Dynamics

    Digital interactions and transactions have opened the floodgates for customer and restaurant data, which can be used in both macro and granular analyses across different. A report by Custom Market Insights projects that the US Fast Food QSR Market will be worth a staggering USD 454.3 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 5.60%. This growth underscores the resilience and dynamism of the QSR sector.

    The breakup of various QSR chains in US:

    distribution of different types of restaurants.
    The image is a pie chart representing the distribution of different types of restaurants. The largest segment corresponds to “Others” at 31%, while the smallest is the “Chicken-focused” category at 7%. The chart visually illustrates the popularity of these restaurant types.

    The landscape of restaurant data analytics across the industry

    A restaurant can test a program in one location and then, depending on its success, choose to apply the program at other locations and across various levels.

    Forward-looking companies have tested the waters of restaurant analytics for overall business benefits. For example, Darden Restaurants uses data to optimize menu prices and the study of the duration of diner visits has realised operational savings expected to the tune of $20 million. The Cheesecake Factory, with more than 180 restaurants in 175-plus locations across the U.S. and three licensed locations in the Middle East, has also started leveraging restaurant data analytics to provide better food and a better customer experience.

    QSR data analytics: illuminating customer behavior

    Data analytics has evolved into the cornerstone of QSR success. Beyond the broad strokes, it allows QSRs to analyze customer data with precision, extracting valuable insights that guide strategic decisions.

    QSR Data Analytics

    Marketing Mix Modeling for Multi-Channel Retailers: Exploring the Impact and Techniques.

    The 6 Top QSR Trends For 2024

    1. Digital-Only Quick Service Restaurants

    Things like artificial intelligence (AI) and automation have already been creating a buzz in the QSR space. However, a new trend is emerging: digital-only restaurants.

    Digital-only QSRs feature a smaller front-of-house in favor of a more technologically advanced back-of-house, much like McDonald’s first digital-only concept restaurant in Fort Worth, Texas - This facility is about half the size of the brand’s typical restaurants and has a conveyor belt for picking up orders placed online, a shelving area for delivery couriers to pick up orders, and plenty of kiosks.

    restaurant image

    Wingstop, Taco Bell, Chipotle, and more have all tested digital-only concepts, though not to the same extent.

    While the verdict is still out, this QSR trend has the potential to not only change how restaurants operate but also drastically increase demand for restaurant IT solutions.

    2. Moving from Personalization to “Situationalization”

    According to Salesforce, consumers want the businesses they frequent to understand their individual needs. QSR situationalization is an emerging concept that creates the same tailored experiences and frictionless ordering.

    Using data, analytics, AI, and automation to address the situational needs of customers based on their circumstantial needs – for example, Individualization Data plus Contextual Data: Location, Time, Weather, Social, etc.

    For example, Taco Bell has a history of running fan-focused promotions during the Super Bowl, using specific game scenarios as triggers for special offers:

    The chain offers conditional promotions where they set specific criteria, such as if a particular event happened during the game (e.g., a touchdown within a specified time frame), customers could redeem a free item or receive a discount.

    3. Gamifying the self-service experience

    By offering a wide range of options and visually displaying each ingredient, QSR chains are engaging customers in an interactive and enjoyable ordering process. This was targeted to increase customer satisfaction but also led to higher average transaction values as patrons were more inclined to explore additional menu items.

    One prominent case to be discussed is Burger King's "Whopper Lust". The fast food giant introduced a gamified experience on their self-service kiosks where customers could play a digital slot machine-style game called "Whopper Lust". By interacting with the kiosk screen, customers had a chance to win discounts, free menu items, or special promotions, creating an engaging and interactive ordering process.

    The kiosk interface seamlessly integrated with the restaurant's backend systems ensures real-time updates and accurate tracking of customer interactions. Moreover, by capturing and analyzing customer behavior, businesses can gain valuable insights into preferences, popular combinations, and seasonal trends.

    3. Influencing the new push content

    Has it ever happened to you that you made an impulse decision because of the offer advertised and not on the merit of the product? Influencers partnering with the biggest QSR names have a sizeable following – sometimes rivaling the brand themselves. Enough to turn GenZ heads.

    Dunkin did something similar with Charli D’Amelio selling “hundreds of thousands” of drinks in the first five days of the campaign’s launch. The launch day set a record for daily users on the Dunkin’ Donuts app, where users could pre-order the drink for direct pick-up. The Influence Marketing campaign with the TikTok sensation resulted in a 57% increase in daily downloads of the app. That’s a lot!

    The company added that it saw a 20% increase in cold drink sales on the day of the launch, and a 45% increase in sales the following day. Due to the overwhelming success of this campaign, Dunkin’ decided to collaborate with TikTok star again the following year, for a second signature drink in partnership with the brand: the “Charli Cold Foam”.

    Customer Cost is King

    3. Customer Cost is King?

    From supply chain shortages and rising freight prices to skill shortages and increasing labor costs, there is a rising cost of doing business in the QSR industry. Many franchisees and restaurateurs are prioritizing investments in restaurant digital systems to reduce overhead and minimize spending. For many.

    QSR decision-makers are likely to complete application and hardware modernization projects to reduce the number of devices and platforms they use. Companies that provide restaurant digital solutions to quick-service restaurants, must be prepared to efficiently install, repair, and replace the hardware that enables QSR personalization. The better you can meet your QSR clients’ needs, the more likely your business will meet its goals.

    4. Automated inventory management

    Not only tracking food and beverage stock, anticipating quantities, and scheduling reorders more efficiently, modern systems can minimize food wastage, which reportedly costs the hospitality industry $100 billion annually. Companies such as Kitro are putting AI to use not only helping restaurants reduce food waste but also ensuring their efficient procurement schedules. Also, partnerships with programs like Too Good to Go can save restaurants from wasting their excess food–they can avail it to users as a meal deal. Let's face it: initiatives that save time and money, all while ensuring environmental sustainability, are a no-brainer, especially since sustainability is at the forefront of the global agenda.

    5. Going green

    Subway is teaming up with GenZ EV Solutions and Red E Charging to build Subway Oasis charging parks. This is a dual shot at fulfilling sustainability initiatives, as well as elevating the average restaurant goer by offering canopies with several EV charging ports, picnic tables, restrooms, Wi-Fi, playgrounds, and green spaces. As an incentive for guests to plug in, Subway will offer dedicated promotions that are only available while utilizing the chargers. It plans to use insights from the pilot locations to shape its strategy for building out larger, more ambitious charging parks going forward.

    Subway

    Source: Forbes

    6. Dual branding as the future of quick service

    Consumers today are faced with a wide variety of restaurants and choose to dine out. From hundreds of restaurant options from snacks to coffee, brands continue to innovate and find ways to tempt consumers.

    One solution gaining momentum is the concept of dual branding products and the opportunity for franchisees to optimize their resources. This is where we see the future of quick service.

    Focus Brands now boasts a portfolio of 175-plus open co-branded stages of development across the country.

    While key consumer benefits vary by dual-brand combination or convenience. This convenience also creates an opportunity to enhance unit-level volume, no additional labor is needed. One store manager can ensure employees are cross-trained to execute both brands.

    Wrapping Up

    The US QSR industry is in the midst of a data-driven revolution that is modifying the outlook of all major chains. QSR Data analytics topped with automation, and customer-centric strategies are driving efficiency, enhancing customer experiences, and optimizing profitability. As the industry continues to evolve, QSRs that embrace technology and innovation will not only survive but thrive in the highly competitive landscape of the United States.

    In a world where customer expectations are constantly evolving, QSRs that leverage data analytics and technological advancements will deliver quick and satisfying dining experiences. By remaining adaptive and customer-focused, the future of the QSR industry in the United States holds limitless potential for those willing to seize it.

    About Author

    qsr industry for 2024
    Debadutta

    Sports and Tech Enthusiast

    In a world of opinions and cold numbers, data tells a compelling story.

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