Increased need to build emotional connections: This ups the ante in terms of brands needing to drive preference.Loss of first-party data: Third-party delivery companies don’t share the data they collect with QSR brands, meaning restaurant operators lose a crucial connection point to customers’ wants and needs. This is impacting the industry in three primary ways: Put another way, for most operators, delivery services are now simply another cost of doing business. The COVID-19 pandemic had myriad knock-on effects for the QSR industry, but none loomed quite as large as the role of third-party delivery services such as DoorDash and UberEats.Īs noted in the infographic, with the exception of McDonald’s, in the US it’s these apps that dominate users’ smartphones. “All of my promotions are structured that way.” Dancing with the disintermediators The chain’s approach: “I have a value version that goes on to my value menu, but I also have a premium version for people who can afford to pay more,” she explains. Inflationary trends are why, Paull says, so many QSR brands are re-evaluating their agency partners – the current reality can require a different set of marketing skills.Īlice Crowder, chief marketing officer at Krystal, a QSR chain most active in the southeastern US, explains in this interview that some 25% of her meetings now involve supply chain issues, and there is constant pressure to remind finance teams that consumers may not be willing to absorb increased costs. Greg Paull, of consultancy R3, notes in this article that one response to offsetting commodity pressures is to downsize portions Domino's wing deal, for example, has gone from ten to eight items. (Visit this Spotlight's infographic for this data, and more.) And according to QSR Magazine, the trade title, menu pricing grew by 1.3% between September 2021 and January 2022 alone. This both positions it well in an inflationary market but also means it has to drive value even harder for its customers, such as Gen Z, where some 65% of the working-age cohort lives paycheck-to-paycheck. One reason QSR is so popular is because it offers good food at a low cost. Here, then, are some overarching trends – all taken from WARC’s new Spotlight on the category – about how US QSR brands are navigating a landscape of disintermediation, digital and dazzle. There’s the glitz of its fondness for celebrity partnerships, and the grittiness of a category where “ghost kitchens”, used solely to prepare food for delivery, help drive incremental revenue. US QSR’s scope means the category intersects with just about every marketing trend and concern, from inflation to influencers, data ownership to digital commerce. The top five brands in terms of ad expenditure – McDonald’s, Domino’s, Taco Bell, Burger King and Wendy’s – spent $1.8 billion in 2020, and Americans spent almost $300 billion in the sector in 2021, an amount just about equal to the Gross Domestic Product (GDP) of Colombia. White Castle, serving sliders, opened in Wichita, Kansas in September 1921, and is generally seen as the founding member of the category.īut maybe at this juncture, it’s the category’s scale in the US, not its longevity, that should make marketers, no matter the category, pay notice. The category was US-born and is almost 100 years old. When it comes to brand categories, there is probably none more American than quick-service restaurants (QSR), more commonly known as “fast food” to the hundreds of millions of hungry diners – that is, just about everyone – who frequent the country’s hundreds of national and regional chains, and who are gratefully returning to in-store dining after the pandemic, as well as frequently ordering food for delivery, too. This article is part of the March 2022 WARC Spotlight US series, “For QSR brands, a menu of disruption, digital, and dazzle”.
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