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Panera ladles out plans to integrate loyalty with Apple Pay

NEW YORK – A Panera Bread executive at the NRF 105th Annual Convention & Expo revealed how the quick service restaurant marketer is planning to integrate its popular loyalty program with Apple Pay, following success with early adoption of the payment service.

During the “‘Future-Proofing’ Your Business: Lessons from Panera, Discount Tire” session, executives from both companies underscored their brands’ focus on providing streamlined mobile payment options to customers. Panera’s 2.0 initiative, which included rolling out self-service kiosks, a revamped mobile application and order-ahead capabilities, has resonated positively with its digitally savvy target audience that prefers to pay via smartphones.

“We accept Apple Pay and we are working on [integrating] Apple Pay with loyalty too,” said Brian Backer, director of enterprise architecture at Panera Bread. “We see great success with Apple Pay in-app, but I’d say it’s still emerging.”

Supporting streamlined ordering
Panera’s 2.0 efforts kicked off when the QSR marketer’s CEO, Ron Shaich, became struck by its competition – and the fact that some customers were finding better alternatives elsewhere.

This prompted the brand to take a closer look at reducing friction throughout the ordering process, a particularly important goal for a chain that sees highest traffic occur at peak times such as lunch hour and the dinner rush.

Panera Bread’s wobbly third quarter profits last year prompted the brand to continue to convert more of its locations into its Panera 2.0 initiative (see story).

The Rapid Pick-Up platform enables consumers to place orders up to one month in advance by inputting their desired meal options into the Panera application or online site. Users may check out as guests or use their loyalty information to sign in and collect rewards.

“We think it’s a very good way to enjoy Panera when you don’t have time to take part in our cafés,” Mr. Backer said.

The brand is currently piloting an order-from-the-table option in Boston and Charlotte markets, which aims to offer walk-in customers flexibility in how they enjoy their in-store experience. If consumers pop into a Panera restaurant with friends and would rather spend some time catching up before they order meals, this feature allows them to do so.

“Personally, it’s my best Panera experience,” Mr. Backer said. “You can order when you want to.”

However, the marketer’s quick adoption of Apple Pay has been one of the most beneficial ingredients for the 2.0 initiative. Panera sees approximately one in four in-app payments conducted via Apple Pay, suggesting that offering mobile payment options is critical for millennials and digitally savvy individuals.

The type of on-the-go ordering that Panera and its competitors cater to makes them ideal partners for such services. Consumers who want to place a quick lunch order will likely be deterred from manually entering their delivery and credit card information on a small-screen device.

“For us, we were trying to make a big impact into the Rapid Pick-Up and Order Ahead markets,” Mr. Backer said. “Apple is a good partner of ours, and it works extremely well with our demographic.”

Self-service kiosks have also proven to do well in many suburban markets, another revelation that lends credence to digital-first ordering efforts.

Adding loyalty program components into Apple Pay could also help ramp up sales among Panera fans attempting to maximize their potential at receiving rewards.

Determining the right fit
A Discount Tire executive also spoke on best practices for selecting the right digital payment solution to implement into current brand offerings. Discount Tire sought to bolster omnicommerce by making it simple for customers to purchase items, regardless of which device they are using.

“We’ve been successful by keeping a really sharp, tight focus,” said Evan Hunter, product manager of payments and financing at Discount Tire Company.

The company considers three main factors when choosing a best-fit payment service: mitigating risks, flexible integration into current systems and preparation for the future. It plans to introduce a new Web site within the year, and a new point-of-sale system to stores over the next two years.

Implementing tokenization and encryption are also top-of-mind tasks for the brand.

Discount Tire and Panera both leveraged Verifone’s electronic payment technology. The executives advised brands to work alongside third-party vendors and partners to develop the most forward-thinking solutions.

“Challenge every one of your partners,” Panera’s Mr. Backer said.