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Wendy’s outshines competition as common POS integration opens mobile opportunities

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.

Wendy’s is already using mobile ordering in seven restaurants in Columbus, OH, and plans to covert the Phoenix market by the end of this month while a loyalty pilot program is underway in nine markets and a mobile payments pilot test expected to launch soon. While mobile alone is not the answer for brands, if Wendy’s can integrating messaging that is resonating with its mobile strategy, this could give the brand a boost.

“Wendy’s has tackled the single biggest hurdle holding back mobile engagement in the restaurant industry,” said Matt Silk, head of strategy at Waterfall, San Francisco.

“POS integration for fulfillment and tracking of offers along with the fear of slowing down checkout has killed more projects than I care to remember,” he said. “Now that they have made this investment, the sky is the limit on what they can do.

Consumer tastes evolve
Wendy’s reported its preliminary fourth quarter and 2014 year-end results this week, with quarterly same-store sales up 1.9 percent, compared to a decrease of 1 percent recently reported by McDonald’s. The same-store sales gain is just one of the reasons why Wendy’s fortunes appear to be on the upswing, with others including messaging that is resonating with consumers and a strong mobile strategy that includes mobile ordering and loyalty pilots and an expected mobile payments pilot.

Fast-food burger joints have been suffering as consumers’ tastes are evolving, with chains that promise a better-quality burger, such as Shake Shack and Five Guys, growing.

In this environment, Wendy’s has been trying to position its offerings as better quality than the competitions’.

At the same time, Wendy’s is quickly embracing mobile to help it engage with the younger consumers who tend to frequent quick-service restaurants.

However, to date, Wendy’s has not successfully integrated the two, a challenge others in this sector are facing as well.

“There are still a lot of kinks in the mobile payments system, but brands like Starbucks have started to get consumers accustomed to the notion of brand-specific payment and rewards apps,” said Sean Miller, senior vice president of strategy at Rokkan. “Wendy’s is making a smart move by getting in front of people fast, though it remains to be seen whether the CurrentC platform will be a hit.

“What it isn’t doing well is integrating its clever marketing and voice into the mix,” he said. “It really seems like their voice is split.

“The mobile apps are purely functional and their social channels have all the fun. This is the case for the official BK and McDonald’s apps, too. It remains an opportunity for these brands to create a more holistic mobile strategy, or at least to make it look more considered from the consumer’s point of view.”

Consumer-facing technology
Wendy’s said this week that, as part of its brand transformation, it is reinvesting resources to focus on consumer-facing technology.

The common POS system is positioned as the foundation of Wendy’s consumer engagement and marketing plans, including mobile rewards and mobile ordering.

The POS system is currently installed in substantially all of the 957 company-owned restaurants and is expected to be in all North American locations by the end of 2016.

Wendy’s is also a member of the retail consortium MCX, which is developing a mobile payments solution. The chain expects to begin a pilot test of the MCX mobile wallet, CurrentC, in the coming months.

Taken together with the mobile ordering and loyalty pilots, Wendy’s is clearly betting big on mobile.

“Platforms such as mobile payment, mobile ordering and loyalty programs are rapidly growing in the retail marketplace and provide potential benefits such as consumer convenience, increased transactions, higher check, faster speed of service and a seamless brand experience,” said Emil Brolick, president and CEO of Wendy’s, in a statement.

“These initiatives are essential elements of not only our growth strategy but also our ongoing efforts to increase our brand relevance and enhance our economic model,” he said.

The right mix
Wendy’s is not alone among QSR brands in betting on mobile’s potential to help them connect with millennials.

McDonald’s has been testing a number of different strategies in different locations, including targeted mobile coupons and beacons as well as payments – as evidenced by partnerships with Apple Pay and Softcard – and ordering.

Burger King has partnered with PayPal for mobile payments. The chain has also said last year that it is investing in building a new digital platform designed to enable it to quickly scale up with mobile offers, payments, order-ahead and other features.

“Love to see brands pushing into mobile ordering and wallet spaces, this is critical for their longevity in the industry,” Mr. Silk said. “But, I would strongly encourage them to focus the lion’s share of their energy and resources on building their customer database with a particular focus on which of their customers want to engage via mobile.

“Customers are more than happy to tell you what content and functionality they want via SMS, MMS, Passbook, Mobile Web or Apps,” he said. “Brands should not be afraid to ask and incentivize their subscribers to tell them via a customer preferences panel exactly what they want, when and how often.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York