Tuesday, April 13, 2021
"The adoption of emerging technologies has already presented plenty of growth opportunities in the sector," researchers wrote, adding that WeChat Pay witnessed a 26 percent increase in QR codes usage in the first quarter of 2020, and Mastercard reported a 75 percent increase in European contactless transactions.
David Payet, grocery retail & QSR offer manager, GSV at Worldline, shared additional observations on how payment technologies are reviving the QSR sector. Following are excerpts from his interview with The Green Sheet.
How have QSRs adapted to social distancing, closures, and the sudden shift for all/most of their sales into the online space?
Like many other industries, the quick service restaurant (QSR) sector has faced challenges like never before during COVID-19. Social distancing and lockdowns have resulted in the sudden need to shift into the online space. As such, players throughout the industry have had to assess their strategic approach and invest in new technologies to survive.
We have seen the entire purchase journey change for consumers looking to order from QSR restaurants. Businesses have had to make a great deal of their services, from payments to collection and delivery, contactless. Digital systems have been integrated into business structures for features that help QSRs adapt to the unique environment they have found themselves in – such as, click and collect and tabletop ordering.
By one estimate, the industry has adopted more digital technology in the past year than what it was expected to in the next five to ten years. Almost every QSR outlet in the country will now have some sort of digital technology, from extensive ordering kiosks and bespoke apps in large franchises, to Just Eat and Deliveroo ordering in smaller restaurants.
What still needs to be improved in terms of the current tech being used?
Throughout the pandemic, there has been a dependency on third party delivery apps for taking orders, processing payments, and arranging deliveries. This is not a bad thing though – it is certainly better than not taking any orders at all.
Yet, as QSRs begin to open their doors to customers again, such apps will cut into profits and will mean they cannot take payments directly – everything has to be processed by an intermediary, which could add an extra layer of complexity to a company’s payment infrastructure. This, along with the overall challenges imposed by digital transformation, means that some brands may struggle to integrate all aspects of their business with new digital systems.
What’s more, using such apps means that QSRs lose control over their checkout experiences resulting in inconsistencies during the purchase process. In the new normal, when digital innovations are being utilized in restaurants and online, it will be important for businesses to maintain a coherent and seamless checkout experience across their different channels to meet customer expectations.
There are also still gaps in contactless wallet acceptance and difficulties in integrating loyalty programs with them. Starbucks, for example, has a digital version of its loyalty card, but doesn’t allow customers who order on Uber Eats or Just Eat to collect rewards.
What are your expectations for contactless payments, onsite digital capabilities, online sales and click-and-collect, post-COVID?
With restaurants and the high street now beginning to reopen, it is unlikely that we will see businesses returning to how they operated prior to the pandemic. Consumer behavior has undergone a dramatic transformation during COVID-19, with many customers now fully embracing a digital lifestyle. What’s more, social distancing measures will mean that precautions need to be taken within restaurants.
There are a number of innovations that will help QSRs adapt to these changes though. Using technology that expands upon their current digital capabilities will be a great place to start. For example, payments with Apple Pay and Google Pay that enable one-click mobile loyalty subscriptions bypass the need for plastic cards or for merchants to have individual apps by deploying the loyalty card directly to a customer’s digital wallet.
Scan and pay is another interesting technology. Developed originally for the retail industry, the payment model can help businesses meet social distancing measures. In self-service restaurants, it could allow customers to bypass the need to interact with staff entirely by using a QR code to log in to the store’s digital system. Then, barcodes can be used to scan each item before paying. The technology could even allow QSRs and coffee houses to provide restaurant-style eat-in experiences by enabling customers to scan their tables to make orders that can be brought to them.
Online sales and click and collect will also help reduce contact points during the payment process over the coming months. They will likely be payment methods that customers continue to use in the new normal.
How have QSRs resisted the full impact of the crisis to date, and how can they continue to adjust to the pandemic going forward?
QSR restaurants were already leading the way when it comes to digitalization in the food service industry, even before the pandemic. This may have been a differentiating factor that helped them withstand the impact of COVID-19 when compared to other restaurants.
Still, that does not make up entirely for the losses incurred due to restaurant closures during lockdowns. The best performing QSR in the industry, McDonald’s, experienced a 30 percent worldwide drop in income and a 68 percent drop in net profit in the second quarter of 2020 (bit.ly/3dUJ9L0). But there is now light at the end of the tunnel. QSR’s, if they have not already, will now be turning their attention to how they can begin to bounce back and thrive in the new normal.
Yet, incorporating new solutions alone will not be enough. They need to do so strategically with an integrated, omnichannel experience that connects the dots between online and in-restaurant purchases.
Customers will continue to maneuver between online and offline platforms following lockdowns, so QSRs’ payment experiences should be seamless integrated, enabling an excellent customer experience, regardless of where it is taking place. Key technologies and solutions, like tokenization and reward cards for customers’ online and offline accounts will help the achieve this. To learn more, please visit: ingenico.com/omnichannel
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
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