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Mobile Minute: Feeding Demands for Customer Loyalty — QSR & Food Delivery Apps

Lexi Sydow

As more QSR and food delivery apps come to the table, mobile is playing a key role in where customers choose to dine.

Just last week, Starbucks launched the revamp of its Starbucks Rewards program, a channel that’s responsible for 40% of the coffee chain’s daily transactions, with a new tiered approach to redeeming rewards. A leader in mobile loyalty, Starbucks ranked as the #1 QSR app in the United States last year based on average smartphone monthly active users (MAU). But they aren’t the only ones utilizing customer loyalty programs to stand out from the crowd and increase customer retention.

In the US, the total amount of money spent on meals away from home has increased 50% from 2007 to 2017 to equal 54% of total food expenditures. By contrast, money spent on food at home grew only 30% during the same time frame — decreasing by 4 percentage points in share of total food expenditures to 46%. Last year, total global sessions in food and drink apps increased 130% since 2016, which helps explain the continued surge in the sophistication and volume of quick service restaurant (QSR) and food delivery mobile apps. Each session is an opportunity to purchase and could represent a potential mobile order.

Mobile Innovations Drive Growth for QSRs

QSRs are known for their accelerated service offerings, and mobile provides an additional advantage for order ahead options that help get customers in and out the door even faster. That being said, mobile’s value-add in the food industry relies heavily on efficiency and accessibility to maintain customer loyalty.

For example, Dunkin’ Donuts (#3 in MAU for 2018) is experimenting with expansions to its DD Perks program that would allow customers to earn rewards regardless of how they pay (currently you need to use an enrolled gift card or mobile app to participate). The franchise also changed  its name to “Dunkin’” to be more inclusive of their full menu beyond just donuts, such as a recently revamped espresso menu.

Competitive awareness is an important part of any marketing strategy, especially as it relates to acquiring new customers and ensuring customer loyalty. During this year’s Super Bowl, Domino's took an interesting spin on its loyalty program by launching its “For the Love of Pizza” campaign that rewards customers for eating any pizza (even competitors’). To participate, customers must enroll in Domino’s Piece of the Pie rewards program and upload a photo of pizza for points that can ultimately be redeemed for a free Dominoes pie. The effort paid off: On Super Bowl Sunday, the Domino's Pizza USA app hit #88 for daily iPhone downloads of overall apps in the US, up 158 ranks from the week prior. In the 30 days after the Super Bowl, Dominos Pizza USA maintained this lift, averaging a daily iPhone download rank of 127 for overall apps compared to 185 in the 30 days prior.

Food Delivery Apps Have Dramatically Altered the Way We Dine and Redefine Loyalty

Globally, downloads of the top 5 food delivery apps have grown 115% in 2018 vs. 2016. Food delivery apps provide a seamless bridge between the physical and digital world and cater well to our increasingly on-demand economy.

Mobile delivery apps provide a breadth of options at your fingertips. Loyalty promotions, such as Grubhub offering an extra 10% off a second order in the same day, or push notifications with limited time offers help motivate customers to order more frequently.

Ease of payment is another important factor for customers of both food delivery services and QSRs. While payments for food delivery has changed dramatically from the days of cash-only options, many customers still seek more seamless payment methods that don’t require manual credit card entry. Uber Eats recently announced it now accepts Apple Pay — adding to its breadth of payment options including credit, debit, Paypal and Venmo.

What to Expect in 2019 for QSRs and Food Delivery on Mobile

As the volume of QSRs and food delivery services continue to expand, mobile will play a key role in engaging with and leaving a lasting impression on customers to ultimately motivate customer loyalty. We expect to see this sector continue to grow in 2019 and be at the forefront of mobile innovation — feeding our curiosity and our stomachs.

For more on the state of mobile for restaurants and food delivery in 2019, download our latest report:

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This post is the latest in a Mobile Minute series that features App Annie’s perspective on how mobile is impacting current events and consumer trends. Check in weekly for our take on the latest news cycles and how mobile transformation is shaping industries around the world.

April 24, 2019

Market Data
Mobile Minute

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