Wendy’s opens innovation labs as mobile becomes competitive advantage for QSRs
The Wendy’s Company is opening an innovation lab in Columbus, OH, as it looks to mobile and digital to help shore up its recent sales successes and pull further ahead of the competition by continuing to innovate how younger consumers interact with the fast-food burger chain.
The lab will provide a collaborate environment for its employees to explore digital enhancements, and will also be a testing ground for the brand’s continuation of mobile innovation such as ordering and payment functionalities, suggesting that these features will become requisite for all fast-food chains in the near future. Wendy’s is opening up the facility near The Ohio State University’s campus, and will provide accommodations for 25 information technology and operations employees, who will put effort towards enhancing digital experiences.
“The labs’ first efforts will center on these consumer-facing opportunities, like mobile ordering and mobile pay and other digital experiences,” said Brandon Rhoten, vice president, customer experience with The Wendy’s Company, Columbus, OH. “To make this happen, the facility can house up to 90 developers, designers, and digital professionals, working with other employees from the Dublin Restaurant Support Center and across the brand.
“While mobile payment is already available at most of our restaurant locations, we’ll soon expand to a mobile ordering system and digital offers platform. We want to create a seamless brand experience and we believe mobile is a significant part of that experience.”
The lab’s decision to test mobile ordering capabilities also speaks to the brand’s desire to stay in league with other food and beverage marketers such as Starbucks, who already offer customers the ability to place orders prior to store arrival via their smartphones and pay directly in mobile applications.
While some brands including Taco Bell and Starbucks have begun leveraging mobile ordering options within their apps, many other top marketers in the sector are still testing the waters.
Although Wendy’s has not yet revealed any specifics surrounding its pilot plans, the creation of the innovation lab suggests that the brand is working on becoming a mobile leader in the space, especially as most other fast-food chains do not have innovation labs of their own. Wendy’s currently offers mobile payment options within its app.
The ability to place an order ahead of time via mobile is not currently available.
“By opting for simulation first, Wendy’s will have the chance to understand and analyze their customers’ tendencies while simultaneously allowing their employees to provide feedback on how functionalities could be improved,” said Melissa Greenberg, general manager of mobile advertising agency Fetch, San Francisco, CA. “Housing 25 information technology and operations professionals to closely work with employees will also be beneficial to flush out ways to optimize and enhance beta functionalities.
“Although time is of the essence, it is important that Wendy’s rolls out a product that is intuitive and efficient to use for not only their customers, but also their employees. This is important because if Wendy’s technology initiatives struggle initially, both parties may not be as inclined to use it down the road.”
As fellow fast food brands such as McDonald’s continue to struggle with declining sales, Wendy’s may be well-poised to receive a leg up from mobile if the ordering option can be integrated seamlessly into the app. This resonates positively with time-strapped consumers or those who want to pop in to a local store to pick up a quick meal, but cannot afford to stay idle in long lines.
Wendy’s Q1 financial earnings revealed that its same-restaurant sales increased by 2.6 percent at United States-based locations, although consolidated revenues fell approximately $57 million from this time last year.
Several major retailers, including beauty brand Sephora, also maintain similar testing grounds for mobile efforts.
A Sephora executive at the Mcommerce Summit: State of Mobile Commerce 2015 said Apple Pay is receiving a warm welcome from its customers who are early adopters, but mainstream shoppers will need both help from educated staff and an experimentation period to grow comfortable with the technology (see story).
The Wendy’s lab will also be focusing on consumer-facing opportunities in its bricks-and-mortar restaurants. Professionals will strengthen support systems by optimizing internal communications technologies and business intelligence.
The facility, which can accommodate 90 people, will maintain an interior that is a simulant of a real Wendy’s location, moveable work stations and an interactive layout. The brand also hopes to draw inspiration from the college campus nearby.
“Recently, many brands have recognized the need to create a more convenient customer experience and to do that, and do it well, you need programmers, developers and designers – and Wendy’s plans to do it well,” Wendy’s Mr. Rhoten said. “While we aren’t the first chain to develop a lab like this, we believe that applying the same values we focus on in every aspect of our business, we’ll be able to deliver the best results for our customers.”
Raising mobile efforts
The chain is attempting to place a bigger spotlight on mobile marketing and commerce efforts as consumers increasingly turn to mobile for bite-sized and snackable pieces of content.
Wendy’s is part of a handful of big brands who are testing a unique take on visual storytelling via a new ad unit from Pinterest that seeks to make the experience less disruptive by giving users more control (see story).
Furthermore, while all fast food burger chains are struggling to some degree, Wendy’s appears to be faring better than most, thanks in part to the installation of a comment point-of-sale system in more than 2,600 locations, helping to drive the chain’s mobile rewards and mobile ordering aspirations (see story).
“Wendy’s has been investing heavily in digital in the past few years and is the one of the only fast food chains to develop and implement innovation labs,” Fetch’s Ms. Greenberg said. “Other food and beverage marketers should consider doing the same because it will give them insight into their customers’ tendencies before actually rolling out digital initiatives and will allow them pinpoint ways to retain and attract top talent.
“With so much competition in the fast food market, it’s important to provide exactly what the customers want and take on a form of A/B testing to make sure it works effectively before hitting the market.”
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York