Mobile Payments On the Rise in Restaurant Industry
Mobile payment technology is growing fast as a must-have component in the restaurant business, alongside customer demand for speed, convenience and a willingness to use the technology. While many operators rely on third-party services, some have chosen to develop proprietary smartphone apps in house.
“[Technology] has become a part of everyone’s daily life, and this is just the beginning,” said Kevin McCarney, owner of the 10-unit Poquito Mas restaurant group in Los Angeles, which last year introduced mobile payments and online ordering through a third-party provider.
“We are in the hospitality business, and today our guests use technology to connect to friends, to the world and to us as restaurants,” McCarney said.
That adoption has been swift. Roughly one-quarter of consumers say technology options are important features that factor into their decision to choose a restaurant, according to the National Restaurant Association in its 2015 Restaurant Industry Forecast, published in January.
That was an increase from less than 20 percent the prior year, which underscored that “technology rapidly is becoming an expectation rather than a novelty when dining out.”
NRA research found 9 percent of consumers at least once a week used smartphones or tablets for meal payment, and 26 percent used it at least a few times a year.
Many restaurant brands look for mobile payment solutions that incorporate other services, such as ordering and loyalty programs, including rewards.
The 21,800-unit Seattle-based Starbucks Corp. has more than 9 million My Starbucks Rewards program members, and many have adopted its smartphone app. While Starbucks has become a gold standard in this regard, smaller brands are finding ways to tap into the all-in-one mobile offerings.
In mid-February, Chicago-based Wow Bao, the five-unit fast-casual division of Lettuce Entertain You Enterprises Inc., introduced a branded mobile payment app that includes messaging, online ordering and gift purchases.
“Wow Bao customers can now select a favorite location, buy gift cards, reload gift cards easily and much more with this new version.” Geoff Alexander, managing partner at Wow Bao, said in a statement.
“That rate of digital adoption is more than double where we were at the end of the second quarter,” he noted, adding that big box retailers are generating digital sales of 2 percent to 5 percent, and the big pizza brands are seeing digital sales in the range of 35 percent to 50 percent.
The pizza brands appeal to a younger audience, who are adopting mobile payment technology faster than other demographic groups, according to the NRA 2015 forecast.
“As with most technology-related matters, this sentiment is much stronger among younger consumers,” the NRA noted. “But older generations are starting to increase their usage as well. In addition, people with children under 18 in their households are more likely to say that technology options factor into their restaurant choices.”
Read the full article on Nation’s Restaurant News by Ron Ruggles