[Editor's note: An expanded version of this article, and additional coverage of the QSR market, can be accessed by clicking here.]
In the hottest parts of this industry, today people speak less of digital signage and the “restaurant market” and increasingly of QSR, fast casual, kiosks, menu boards, POS, self service, drive-thrus, remote ordering, and other elements of a booming market. Taking QSR as a starting point– because much of the boom surrounds QSR and its variations– what’s new this year?
Fast Casual is deep into a process of rebranding. Pizza Hut is doing so with a lively sports bar concept that served pizza, wings, happy hour drinks, and gameday coverage of sporting events. Premier Mounts partnered with integrator Embed Digital for the digital signage for a key San Bernardino, CA location, among others.
From a display standpoint, we still see LCD flat panels dominate the display landscape, with some indoor and a lot of outdoor direct view LED coming onto the scene. Interactive kiosks for self-service are rapidly expanding, and beacon technologies are gaining acceptance. Ultimately all digital signage boils down to promoting, enhancing, and facilitating communication, whenever and wherever a viewer might be (and do so in the most effective manner). In the QSR market, the devil is in the details. But as you look at technology examples in this publication, first put the goal of messaging and digital signage in the QSR market in perspective. At its core, digital signage is all about consistent and effective communication. It is at its best if this is done to enhance the experience and make that memorable and repeatable.
A few years ago, Joseph Pine and James Gilmore wrote the visionary book, the Experience Economy. In the Harvard Business Review, the authors note that “Economists have typically lumped experiences in with services, but experiences are a distinct economic offering, as different from services as services are from goods. Today we can identify and describe this fourth economic offering because consumers unquestionably desire experiences, and more and more businesses are responding by explicitly designing and promoting them.” The authors write that "Those businesses that relegate themselves to the diminishing world of goods and services will be rendered irrelevant. To avoid this fate, you must learn to stage a rich, compelling experience." In short, it is no longer about products or services alone, but it is the experience that brings people to the point of making a purchase… and just as importantly, coming back again. Digital signage can and should enhance the experience and act as a behavior modification tool.
The key to the experience is recall, and not simply impression. An impression is noticing a sign or a display, where recall means that impression is remembered. By designing technologies (and what they provide) to fit into the experience expectations of consumers, the result will be positive in nature. If ignored or not done effectively, count that as one lost opportunity. Research shows that >70% of the American population sees digital signage in one form or another each day. According to a recent PJSC Study and Recall Comparison Analysis, it shows that print has a recall range of 9% to 52% (with outdoor slightly higher), TV is 22% to 62% and digital signage is the big winner at 47% to 82%. Even the most math averse among us will agree of the efficacy that digital signage can bring to the table.
Speaking of the bringing things to the table (bad pun!), let’s turn our attention to one of the most robust sub-sections, quick serve restaurants (QSR). With retail in general mired down in an existential battle with ordering online (Amazon, Walmart, etc.), it is the QSR creating that personal relationship with a consumer and their food selection at their favorite eating emporium, that is most interesting. Keep in mind that the common denominator between buying via the internet and getting quick service at a restaurant is convenience and value. Quality should always be a given and never ignored.
Back to QSR: Just how significant is the quick serve restaurant in the scheme of consumer business?
Around 17 percent of U.S. consumers dine out at quick-service restaurants at least once a month and approximately 20 percent visit them at least once a week. Although McDonald's is the largest quick service restaurant in terms of brand value, Subway is by far the largest QSR in the United States in terms of number of Units. In 2015, the sandwich chain had 27,103 restaurants in the United States, that was almost 13,000 more than its closest competitor McDonald's. The global quick service restaurants market is expected to surpass $141 billion in revenue by 2019 and the Americas is 44% of that.
In this context, the need to stand out and differentiate each QSR is accentuated. It no longer limited to one hamburger place versus another– there are a multitude of QSRs in a general area. The choices are immense in many cases. Traveling down the street is almost like having a smorgasbord of selections to choose from and each company must lure customers into their unique experience. The experience begins outside while the consumer is driving down the street. We are seeing rapid growth in direct view LED screens and while many areas do not allow full motion video outside, the content on the screen needs to be enticing and appetizing. One somewhat surprising statistic is that QSRs regularly see 60–70 percent of their business come through the outdoor or drive-thru lane. Remember the overriding concept of convenience. A digital signage network at the drive thru can serve multiple functions at once, for instance:
•From the comfort of the car, a QSR can expose a consumer to brand new menu items that you had not intended to buy. Can we all say upsell and profit?
•The audience for your brand of business theater is captured inside the car so there is no better place to run current promotions.
•The menus can be designed to taut your best-selling items and save the consumer and the staff precious time.
•If designed properly this reduces wait times and promotes return business
QSR’s are cashing in on drive thru digital signage because of its ability to attract customers, speed up the drive thru lane and yes, improve the customer experience.
A good percentage of the experience does take place at the drive-thru but that leaves those who like to walk inside the opportunity to be impressed. Great QSRs take advantage of this. One of the benefits of being inside is having more time to choose without the car behind you getting impatient. Oh, that never happens, right? You just hang back from the order line and select what you want. This is a perfect chance to look at the digital menu board, check the calories and nutritional values and in more progressive QSRs, see secondary screens with videos that make you salivate in anticipation of ordering. Many QSRs are incorporating point of sales (POS) kiosks. With touch part of the lives of every cell phone user, interactive kiosks can provide a personalized experience to suit their taste. Drop down menus, promotional tabs, and loyalty programs are the friends of a QSR. Speaking of cell phones, mobile connectivity and beacons extend the message from the QSR to your phone.
We live in an age of competition for consumer’s attention, time, and mindshare. For a QSR to stand out it is not enough to only have tasty food, understanding that quality food is the price of entry to be sure. It is now necessary to go beyond and create a fuller shopping experience. It is beyond customer service and goes all the way to customer engagement. The digital signage technologies are the tools to make this happen. The successful companies will grab this brass ring of opportunity. Some say it is too expensive but data shows that the return on the investment is typically 9 to 18 months.
Fast Casual: The New Frontier
Much of the expansion in the industry is taking place in the fast-casual category. A fast-casual restaurant a combination of quick service restaurant and casual-dining restaurants. It serves “healthier” food that is fresher and costs more to produce than the food served in quick service restaurants. Restaurant industry research firm Technavio forecasts the global fast-casual restaurants market to grow at a CAGR of 10.71% during the period 2017-2021.
“In fast casual the digital signage trend is even stronger, “said Seth Remaley, Senior Director of Sales and Business Development, QSR, Mood Media. “Aside from just digital menu boards, the fast casual segment has become more of a competitor to the traditional QSR, so the need to interact with the guests through as many touch points as possible is paramount. Additionally, most fast casual places do not have drive-thrus and are focused on bringing the guests into the restaurant environment. This means more customers in the environment and longer dwell times so operators want to find ways to educate and entertain the guests. Digital signage allows them to deliver customized content that's family-friendly and helps drive repeat business.”
Fast casual market leaders:
- Chipotle Mexican Grill
- Firehouse Restaurant Group (Firehouse Subs)
- Five Guys Holdings
- Panda Restaurant Group (Panda Express)
- Panera Bread
- Pizza Hut
Other prominent Fast casual vendors include:
- Blaze Pizza
- Dickey’s Barbecue
- Godfather’s Pizza
- LYKE Kitchen
- MOD Pizza
- Noodles & Company
- Pie Five Pizza
- Potbelly Sandwich Works
- Shake Shack
- Uncle Maddio's Pizza Joint
On average, a Panera Bread restaurant generated $2.5 million in 2015, compared to an individual Burger King with an average of $1.4 million, and the average Subway with $424,000. The fast-casual pizza chains MOD Pizza and Blaze Pizza reported strong sales growth last year. With a lot of growth in the industry in fast casual, the race for new technology in that category is heating up. Panera has implemented drive-thru restaurants, so other fast-casual chains could take their que and embrace the drive thru going forward.
Millennials, those aged between 20 and 35 years, are increasingly the target consumers for the fast casual restaurants market in the US. For instance, in 2015, it was estimated that around 33% of the millennials in the US use social media, online advertising, and online ratings to gain information about the food available in fast casual restaurants, before they visit or order.
Technavio's analysts forecast the global fast-casual restaurants market to grow at a CAGR of 10.71% during the period 2017-2021.