We found the conversion rate from app visit to physical restaurant visit to be relatively low."

COVID-19 changed everything, including the way we eat ― and the way we decide what to eat and how we buy and order our food.

During this endemic “new normal,” with restaurant operators facing competition from third-party ordering and delivery apps and navigating a continued influx of mobile orders, a high-functioning mobile app is no longer a nice-to-have but a need-to-have. The benefits are well-documented, with restaurants reporting labor savings, increased loyalty and higher check averages. As you would expect, many restaurant chains have read the writing on the wall and are dedicating resources to brand-worthy apps that can support a more convenient, seamless ordering experience.

Still, despite the surge in restaurant app development, little is known about how consumers use these apps. Every restaurant app is part of a mobile ecosystem and consumers are rapidly forming app habits that greatly impact how and where they spend their dollars.

This year we successfully piloted the Community Intelligence™ platform that powers our Restaurant Intelligence Dashboard. This proprietary platform is built on a panel of highly engaged, verified U.S. consumers who have opted in for mobile device and location logging. We’re able to measure restaurant app-use share, the conversion of app use to physical visit app satisfaction, plus record our panelists’ perceptions of digital app experiences.

With the ability to engage this community, which is nationally representative in age and ethnicity, including key audiences like Gen Z, in quantitative and qualitative interviews and focus groups, we’re able to dive deeper into the ‘whys’ behind consumer behavior in real-time.

What we’re discovering is surprising. Consumers today spend one-third of their waking hours on mobile apps. And, while restaurant apps make up only a fraction of all app use (0.4% share), we found an estimated 52% of Americans used at least one restaurant app in February 2022, up from 48% the year before.

But how and when consumers use restaurant apps can vary drastically. For some, mobile ordering and the app’s technical functions like payment and loyalty tracking are the main reasons for use. These people decide where they are going to eat  before opening the app and placing an order.

But for others, opening a restaurant app is the first stage in the process. We found that nearly one in five users open multiple restaurant apps in a given day. Follow-up conversations with our panel confirmed they often explore and compare menus and pricing app to app before deciding where to purchase.

When we homed in on the quick-service restaurant segment, we found the conversion rate from app visit to physical restaurant visit to be relatively low. Of all the instances where a consumer opens a restaurant app and arrives at a restaurant within the hour, 28% of the time the restaurant they visit is not same as the app they opened.

Clearly, there is a fierce battle to be won in converting app visits to restaurant visits — and winning or losing could have a significant impact on revenue. So how do restaurants win? We’ve uncovered three key insights that are immediately actionable to perfect a restaurant’s mobile app experience.

First, seamless is relative. Poor usability is the No. 1 reason cited by our consumer panel for abandoning an app experience. Restaurants carefully plan every in-person touch point. It’s equally essential to think through every step of the digital experience. Digital teams must remember that users judge the usability of an app within the user’s mobile ecosystem. If improvements in navigability and ease of use aren’t meeting competitive benchmarks, this may be part of the reason your mobile users are app-hopping. Many restaurants in the QSR segment may assume mobile-frustrated users will default to ordering in-store; in reality, they may go from a bad app experience into another restaurant’s app or door.

Digital deals hit differently. Often, when users open more than one restaurant app, they are price shopping for the best available deal. With rising commodity and labor costs, many quick-service chains are abandoning discounting strategies for in-app deals. This manifests in loyalty programs, mobile exclusives and geo-located promotions. Digital teams should consider personalized marketing strategies to ensure deals win over the guests who are comparing nearby brands.

Finally, we’ve learned that loyalty is a two-way street. Loyalty programs are a known driver of restaurant app usage. From points for dollars spent to free birthday treats, loyalty rewards come in many successful shapes and sizes. But for many consumers, loyalty goes both ways and, much like price shopping for deals, consumers are using their mobile devices to compare loyalty programs side by side.

If loyalty rewards aren’t consistent, consumers will open a new restaurant app, enroll in a new program and start spending their dollars elsewhere. For mobile-based loyalty programs, sustainable rewards are key to converting in-app visits to in-store spend.

More and more, the word “app menu” is taking on a whole new meaning in the restaurant industry.

Ron Halverson
Halverson Group

As President of Halverson Group, an Advantage consumer research agency, Ron Halverson has armed executives, marketers, strategists, innovators and their agency partners with the consumer and business intelligence they need to more confidently make bold strategic decisions about where to play and how to win.

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