Fewer Swings & Surprises
in Digital Sales
In 2023, digital and off-premises sales settled into
a predictable pattern of incremental growth.
Digital sales accounted for 26%-50% of overall sales
Almost half the brands reported that 26%-50% of their sales came from digital sources. This is an 11% jump from 2022.
Digital Sales Volume: Fast Casual vs. QSR
Fast Casual is settling in at 26%-50% of sales;
QSRs are at 11%-25%.
77% reported that digital sales grew in 2023
Restaurants are becoming increasingly adept at forecasting digital sales, prompting a shift toward optimization strategies to enhance profitability, safeguard margins, and ensure a return on investments.
Digital sales volume is continuing to increase faster for Fast Casual,
but QSR is starting to catch up.
How did digital sales perform in 2023?
After navigating years of uncertainty, the industry now stands more poised to embrace digital transformation.
The new frontier is optimization of digital channels to
drive profitability and healthy revenue growth.
Kiosks Make a Comeback
In a significant shift from 2022, kiosks are back in demand. Why? They are proving to drive larger check sizes, ease labor challenges, address on-demand business needs, boost upsell revenue, and lower operating costs.
Kiosk is King. 44% of brands plan to add kiosk as a new ordering channel in 2024
- Flexible, self-serve options are the new standard. Restaurants need to control costs, and kiosks offer the freedom and flexibility to improve day-to-day operations, while giving guests more in-store ordering options.
- Additional order channels that are on everyone’s radar: mobile apps, delivery, and phone AI ordering.
New ordering channels to add in 2024
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Both Fast Casual and QSR rank kiosk #1
In second place, Fast Casuals ranked expanded delivery channels
and QSRs ranked voice ordering in Drive-Thru.
Loyalty 3.0 Emerges
A new loyalty framework — with guest data and experience engagement
at the core — is desperately needed to improve acquisition and retention
across all guest segments.
Loyalty upgrades to pursue in 2024
”Loyalty” will be reinvented and redefined
- 80% of respondents say loyalty is not working for their brand.
- Operators are seeking new solutions to enable Experience Engagement, from frictionless signup to guest payment variety.
- A new data-centric loyalty framework will emerge with flexible APIs and guest data at the core (including CRM, CDP, POS platforms).
“With tailored menu recommendations and personalized promotions enabled by advanced AI algorithms, restaurants have the opportunity to enhance customer satisfaction, loyalty and overall restaurant experiences.”
Source: fastcasual.com
Pandemic-Acquired Tech Must Be Revisited on the Path to Connected Restaurants
The tech that helped restaurants survive the pandemic may not be the tech that helps brands thrive as we enter a foundational platforming era.
Tech investments favor Loyalty, Digital Menu Boards, POS, & Kiosk
For the second consecutive year, both Fast Casual and QSR brands agree they need to invest more in loyalty programs.
Tech investment priorities for 2024
Investment Priorities: Fast Casual vs. QSR
Fast Casuals ignored POS during pandemic
and are now prioritizing it.
Brands are moving to unified
commerce platforms
The shift to data-driven platforms is well underway
- 65% plan to, or have already, transitioned to next-gen unified POS platforms that connect all their data.
- This move offers the freedom to see a holistic view of their restaurant, helping uncover new ways to drive efficiencies across all areas of operation.
Order accuracy is still problematic
- Lack of data centricity and production optimization is hurting brands.
- 64% say order accuracy is mediocre or weak, with operations training and employee accuracy the largest factors negatively impacting it.
Order accuracy at
our brand is…
Where order accuracy breaks down
Order Accuracy by Fast Casual and QSR
- QSR & Fast Casual pain point #1 = operations training/accuracy of employees
- QSR pain point #2 = driver/customer pickup issues
- Fast Casual pain point #2 = accuracy of orders from the kitchen
There’s a continued move toward unified,
data-centric experiences for employees and guests.
Underpinning it all is a need for flexible, modern APIs to create
a truly connected, seamless experience.
Tech Companies Must Step Up with AI Solutions, Soon
The restaurant industry is still in the nascent stage of AI adoption,
but tech providers need to step up to the plate to provide
cost-effective strategies that add value quickly.
AI & innovation
Expect new success stories to emerge around demand prediction, efficiencies in drive-thru, workforce management, and labor allocations.
Fast Casual and QSR preferences
Fast casuals favor AI for analytics; QSRs favor AI for voice ordering.
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AI priorities for 2024
Those who don’t embrace AI will fall behind
Leaders in the space are taking charge with predictive reporting and analytics,
voice ordering in Drive-Thru, and dynamic pricing.
Restaurants Are Poised to
Outpace Economic Projections
The industry may be facing increased wages and labor shortages,
but we’re seeing a shift to inflation reduction, and this year’s outlook
is optimistic.
Experts predict 5% YoY growth for US-based Fast Casual & QSR restaurants in 2024.
Enthusiasm for food on the go remains steady, and we anticipate consistent growth
in the enterprise limited service chain segment.
Top drivers of digital sales
The Promo vs. Profit Puzzle
Operators need to embrace next-gen tech to delve into their P&L and uncover its impact on the bottom line.
The Imperative of Data-Driven Guest Engagement
The industry is evolving its perspective on technology, transitioning from viewing it merely as a cost center to recognizing it as an asset to uncovering business opportunity and driving ROI.
Fast Casual vs. QSR Digital Sales Drivers
Top business challenges
- 47% of respondents identified the economic climate as the biggest challenge. As labor costs rise, and the labor market shrinks, maintaining staffing levels has become a critical concern.
- Largest shift YoY: The supply chain has become less of an immediate concern for operators, dropping from the #2 last year to #6 this year.
Brands that win will proactively develop strategies to retain and delight guests amidst economic volatility.
